In this article Dr. Bill Pomfret looks at the growing worldwide concerns over corruption, he states that several factors are responsible for this.
First, a consensus has now been reached that corruption is universal. It exists in all countries, both developed and developing, in the public and private sectors, as well as in nonprofit and charitable organizations.
Second, allegations and charges of corruption now play a more central role in politics than at any other time. Governments have fallen, even the Canadian Prime Minister and his family, careers of world-renowned public figures ruined, and reputations of well-respected organizations and business firms badly tarnished on account of it.
The international mass media feeds on it. and scandals and improper conduct, especially of those in high places, are looked upon as extremely newsworthy, and to be investigated with zeal and vigor. The rising trend in the use of corruption as a tool to discredit political opponents, the media’s preoccupation with it as a highly marketable commodity, and the general public’s fascination with seeing prominent personalities in embarrassing situations have brought scandalous and corrupt behaviour, a common human frailty, into the limelight of international attention.
Third and the main issue taken up in this article is that corruption can be a major obstacle in the process of economic development and in modernizing a country. Many now feel that it should receive priority attention in a country’s development agenda.
Despite the relevance of corruption in project selection, planning and delivery, the project management literature pays little attention to this crucial phenomenon.
Safety Projects International Inc. believes that Corruption is one of the key issues for public policies. It is one of the major impediments to the development of emerging countries and to further improve the quality of life in developed countries, the eradication of corruption is one of the key challenges that the Industrial world faces.
With its decades of experience in performing audits in large organizations, the President of Safety Projects International Inc. Dr. Bill Pomfret believes that his company can identify and predict most corrupt mega-projects, Corruption is particularly relevant for large and uncommon projects where the public sector acts as client/owner or even as the main contractor.
Megaprojects are “large unique projects” where public actors play a key role and are very likely to be affected by corruption. Corruption worsens both cost and time performance, and the benefits delivered. This training article leverages the institutional theory to introduce the concept of “corrupt project context” and, using an actual case study of the Italian high-speed railway, shows the impact of a corrupt context on megaproject.
Unfortunately, achieving all these essential processes and cultural changes might take decades, while projects need to be constantly planned and delivered. Therefore, while the sociological and political communities cope with the long-term issues, such as the cultural and policy changes, the project management community should face the issue of corruption in projects without further hesitation.
The procurement of major infrastructure is always a critical element for corruption, even “fixed criterion weights ensure objectivity and reduce the risk of unfairness and corruption in the evaluation of bidders’ proposals, but only provided they accurately reflect the relative importance of the evaluation factors to the owner.
However, it is still possible to create an unfair evaluation system in which too much emphasis is placed on evaluation factors, thus favouring (intentionally or unintentionally) those bidders that score highly in the corresponding factors”
The evidence of the initial set up permitted them to avoid the public procurement process, which includes prescriptions concerning transparency, market freedom, etc. The private procurement process permitted them to pre-select the main contractors (of the various infrastructure sections composing the TAV program) and the infrastructure technology without an open tendering process.
Corruption in the US, and Canada is off the charts, and since the US is still the worlds number one economy by nominal GDP, corruption there has a massive global impact. Corruption happens in the shadows, often with the help of professional enablers such as bankers, lawyers, accountants and real estate agents, opaque financial systems and anonymous shell companies that allow corruption schemes to flourish and the corrupt to launder and hide their illicit wealth, The contractual framework was issued without a public safeguard according to the “freedom of contracts” that is typical of private bargains involving corruption.
We present several arguments that explain the overbudget of infrastructures. That summarizes the most important ones that emerged from our findings.
Technical: forecasting errors including price rises, poor project design, and incompleteness of estimations, scope changes, uncertainty, Inappropriate organizational structure, inadequate decision-making process, inadequate planning process.
Economical deliberate underestimation due to lack of incentives and resources, inefficient use of resources, dedicated funding process, poor financing/contract management, strategic behaviour.
Psychological: Optimism bias among local officials, Cognitive bias of people, Cautious attitudes towards risk.
Political: Deliberate cost underestimation, Manipulation of forecasts, Private information.
We believe that when companies and organizations adopt the Safety Projects International system for the prevention of corruption, then the benefits that will be accrued Internationally, this new system is a living document, and will be reviewed and revised as necessary, in the meantime the author asks for comments, suggestions or additions to be sent to the following.
BIO:
Safety Projects International has designed and developed a new comprehensive standard for any public procurement framework and has developed a 5-day training course for Contract staff which will teach pro-active standards against corruption and how to effectively measure the performance of supply changes.
Dr Bill Pomfret; MSc; FIOSH; RSP. FRSH;
Founder & President.
Safety Projects International Inc, &
Dr. Bill Pomfret & Associates.
26 Drysdale Street, Kanata, Ontario.K2K 3L3.
www.spi5star.com pomfretb@spi5star.com
Tel 613-2549233