ROAD SECTOR / CORRUPTION

A World Bank review released today recommends steps that can be taken to curb fraud, bid-rigging and cartels in building roads. Billions of dollars in losses have been suffered by both developed and developing countries in the past decade. The most common forms of wrongdoing include collusion among firms bidding on a project, overbilling and the use of substandard materials.
WORLD BANK

• Categories: News & Features / News Stories / Unifeed
• Video Length: 00:02:37
• Production Date: 1 June 2011
• Asset Language: Original
• Corporate Name: WORLD BANK
• Subject Topical: ECONOMIC DEVELOPMENT; FINANCING; DEVELOPMENT
• MAMS Id: U110601d

Description

STORY: ROAD SECTOR / CORRUPTION
TRT: 2.37
SOURCE: WORLD BANK
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS

DATELINE: 1 JUNE 2011, WASHINGTON DC

Shotlist

1 JUNE 2011, WASHINGTON DC

1. SOUNDBITE (English) Paul Bermingham, Operational Policy and Country Services, World Bank:
“The report makes a lot of findings with respect to collusion among contractors in the road sector. Is there something we can do with the procurement guidelines that can reduce the scope of collusion, even if it means that we have to change some of the assumptions about competitive bidding, for example. We have pre-bid processes, pre-bid meetings whereby all the tenders come together, all the bidders come together. Does that facilitate collusion? Should we look at doing that differently. These are the kinds of questions that are coming out of this report and we now need to reflect upon.”

FILE / 2008 BURKINA FASO

2. Wide shot, road work and construction equipment
3. Wide shot, road work while people on bicycle ride

1 JUNE 2011, WASHINGTON DC

4. SOUNDBITE (English) Galina Mikhlin Oliver, Director, Integrity Vice-Presidency, World Bank:
“The bad news is the problems are persistent. They are endemic and they are not easy to address. The good news is, however, persistent effort can reduce the risks and we have good examples where that has actually happened.”

FILE / 2008 BURNINA FASO

5. Med shot, workers shoveling gravel
6. Med shot, worker pushing wheelbarrow

1 JUNE 2011, WASHINGTON DC

7. SOUNDBITE (English) Richard Messick, Lead Report Author, World Bank:
“The two biggest forms of wrongdoing we found in the report were collusion in the bidding process for the contract to build the road and over billing during the construction of the road or providing substandard materials. Again and again we found that companies were colluding or rigging the bids when the tenders were made and we found again and again the companies, when they were building the roads, were either over billing, billing for work not done, or providing substandard materials.”

FILE / 2007 CHINA

8. Wide shot, road and bridge while cars and bikes drive
9. Wide shot, cars driving on road and bridge

1 JUNE 2011, WASHINGTON DC

10. SOUNDBITE (English) Andreas Kopp, Sustainable Development Network, World Bank:
“It might happen that there are large leakages in some cases, but this is not the whole story. The question is: is it relatively high, relative to the high investment volumes and the question is what are the benefits that the country obtains even if there are leakages? This is not to distract from the obligation we have to reduce these leakages.”

FILE / 2008 SENEGAL

11. Pan right, road workers
12. Med shot, road workers with picks
13. Pan right, buses to empty road construction

Storyline

The World Bank today in Washington DC released a new report covering global corruption trends in the roads sector and including recommendations based on the experience of developed and developing countries.

The report, ‘Curbing Fraud, Corruption and Collusion in the Roads Sector’, explores how the World Bank and developing nations can reduce losses from collusion in procurement and fraud and corruption in contract execution, drawing on what the Bank’s investigative office, the Integrity Vice Presidency (INT), had learned from its investigations of Bank-funded roads projects; borrowing country government’s investigations and reports; and the experience of developed countries.

In recent years, the World Bank has elevated INT’s stature within the institution and increased INT’s budget, allowing the unit to ramp up its investigative capacity and improve preventive efforts to reduce the risk of fraud and corruption, while holding wrongdoers accountable for the waste of development funds.

While Bank-financed projects in the roads sector have had consistently positive development results, dangers of fraud, corruption, and collusion plague the sector worldwide.

The Bank has controls to reduce misconduct – procurement process reviews, financial audits, and field supervision – and evidence suggests that losses in Bank-financed programs are less than in those not subject to Bank oversight. Nonetheless, the report notes, for the developing countries of the world, any loss on a road project, whether funded by the World Bank or not, is unacceptable.

To reduce risks of collusion and corruption, the World Bank relies on enhanced supervision tools, investigative resources and a functional sanctions system to assist clients in safeguarding investments in Bank-financed roads projects from fraud, corruption, and collusion. The report suggests that, in addition to more widely adopting project-level preventive measures, more attention should be paid to project supervision, especially in high-risk environments and with a particular focus on verification of cost estimates and the identification of collusive bidding.

The World Bank Integrity Vice Presidency (INT) manages incoming allegations of fraud, collusion and corruption capitalizing on the experience of a multilingual and highly specialized team of investigators and forensic accountants. Where an investigation confirms wrongdoing, the World Bank debars the responsible companies and/or individuals who are also cross debarred by other multilateral development organizations.