Corruption Can Buy You Dinner.
…. and development is one of the best places to eat.
For anyone working in development, construction can be the phase most vulnerable to corruption. A construction project is a complex purchase that leaves many opportunities to “eat.” Such corruption, unfortunately, is particularly prevalent in Africa. Where there is daily hunger, money earmarked for construction becomes an enormous temptation to all involved in the process. Although development brings long term benefits, immediate need can drive contractors, community leaders, and developers to siphon off funds for pressing personal needs.
Having prepared construction documents, budgets and contracts for over 100 schools, 30 water systems, 25 health centers and numerous other public projects in Central and East Africa, I have authorized and overseen payments totaling over $4,000,000 for construction costs. Corruption can come in many forms and at many places along the way. It is the construction manager’s responsibility to be aware of and to seal the cracks through which dollars, francs and shillings fall.
Here are ten common opportunities for corruption that can sink a construction project:
10. Coordinating Prices. As building contractors or material distributors prepare their proposals for a potential project, it is not uncommon for them to be aware of their competitors’ bids. It’s not difficult to turn a competitor into a conspirator by coordinating submissions. One contractor will drastically overbid a project, while another will do so only slightly. This consumes money that would typically be used for change orders and improvements to the design. Moreover, it destroys the trust upon which a competitive free market system is built.
09. Shorting Materials. For a construction model in which materials are purchased directly from a distributor, “adjustable” quantities of sand, stone, and gravel often create a wonderful opportunity to eat. These materials are difficult to measure, especially once they have already been dumped on site. A truckload might be sold as an eight cubic meter delivery – but only filling the truck 90% of capacity is an easy way to “shave a bit off the top.” This method can also apply to bricks. Smaller bricks cost less. If a load of bricks arrives and the dimensions are off only by a centimeter or two, the load will not be sufficient to complete the project and money will be lost.
08. Shorting Mixtures. Shorting concrete and mortar mixtures is extremely common. With cement being the most expensive building material, mixing a ratio of 1:4 instead of 1:3 can produce extra bags that can then be sold at the end of the project. This leads to weaker construction that brings the life of the building into question. It must also be noted that in seismically active sites, diluted concrete mixtures can result in dangerous structures.
These problems can be solved with proper oversight and negotiations. They are, however, one-sided. Corruption becomes more difficult to identify and eliminate when parties begin to coordinate across contract lines.
07. Community Overpays – Intentionally. When the community has a grant but does not have direct access to the money, community leaders can award the contract to the supplier on the condition that they are paid a small kickback for the overpriced materials. Both sides benefit from the arrangement; the construction project suffers.
06. Awarding Labor to Elites. It is always best to hire local labor. This brings much needed salaries into the community and can help stimulate the local economy. Local contractors however must retain the authority to choose which skilled labor they employ. This ensures that the project is completed on time and to the highest standard. When a salary is awarded to one who is not qualified, it can undermine the drive of those who have needed skills. (In diverse regions this is sometimes caused by tribalism.) These talented masons and artisans may then be pushed toward considering other, less legal ways to gain employment.
These scenarios are beyond difficult, because it is the people who will directly benefit from the project who begin to prevent its successful completion. In these situations, firm conversations should be held between all parties to review the community’s ultimate goals for long term development.
Corruption problems are multiplied when leaks from an NGO’S own staff are thrown into the mix. As professionals who oversee the design and budget of the project, corruption at this level can completely discredit the project and the community’s trust in the development effort.
05. Selling Information. A project’s construction cost estimate is sensitive information. An architect or engineer works to prepare a project that is tailored to construction costs and will arrive within budget. In the event that these estimates are leaked to a contractor, the level playing field needed to create competition is destroyed. If a project is estimated at $10,000 for example, eyebrows should be raised if a proposal arrives at $9,999.
04. Paying to Submit a Project. This method is the simplest way to make a few dollars. “Sorry, it costs $5 for me to accept your proposal.” If a bribe arrives this early in the process, it can be assured that more bribery will occur during the project.
03. Falsifying Progress. Contractors are paid after having achieved certain predetermined benchmarks of construction. Progress must be measured accurately, because exaggerating the amount of work completed is a fast track to fill one’s pockets. This of course will make completing the project that much more difficult as funds will dry up before the end of the project. Responsible and informed staff understand that approving a payment for a few dollars without proof of accomplishment could end up costing much more in headaches during the months to come.
02. Falsifying Material Quantities. As mentioned above, materials such as sand and gravel are easy to short. In the event that your staff member determines that only 95% of the contracted quantity was fulfilled upon delivery, the staff member can decide whether to approve thousands of dollars of materials – or not. Bribing a staff member bleeds rescources from the project – though buying a signature may be cheaper than another delivery for the distributor to fulfill the contract.
01. Conflicting Interests. Conflict of interest is by far the worst-case scenario. If someone working for your development organization has a financial interest in an outside contractor involved in the project (perhaps through family relationships), this conflict can undermine the entire construction and development effort. It can further discredit an organization and prevent it from bringing further development to where it is needed most.
These 10 points do not encompass all of the potential traps involved in small or large scale construction. Property title issues and corrupt government officials can substantially complicate or even stop a project in its tracks. Where corruption is present, development and investment plummets, thereby exacerbating an already needy situation.
I recently read a Facebook post arguing that Africa’s biggest problem was not simply poverty, disease or access to education, but rather “a failure to harness our potential.” I couldn’t agree more. However, the post did not site reasons for such failure. Corruption must be considered as one of Africa’s biggest problems. It prevents capable, inspired citizens from moving their communities forward.
And it chokes.