1. Corruption and collusion in construction: a view from the industry

Investment in capital projects is essential for economic growth and development. Yet there is widespread dissatisfaction with the outcomes of construction investment. Major challenges in developing countries include inappropriate projects, high prices, poor quality, excessive time and cost overruns, inadequate maintenance and low returns. These problems impact negatively on development and poverty alleviation and have led to a search for ways to get better ‘value for money’ from the construction industry. At least a part of the explanation for poor construction outcomes in low-income countries relates to mismanagement, but corruption is also an issue that has to be addressed. The construction sector is widely reported as one of the most corrupt globally. Public works and construction repeatedly top the charts of Transparency International’s Bribe Payer’s Index, perceived as the sector most likely to engage in bribery (Hardoon and Heinrich, 2011). Estimates of 20–30 per cent of project value lost through corruption are widespread. In the most comprehensive review of corruption in the construction industry to date, Stansbury (2005) outlines 13 features of construction projects that make them particularly prone to corruption. Most relevant are: size, uniqueness, complexity and the fact that projects are structured through various phases and contractual links that disperse accountability among numerous separate agents. This chapter will explain the various processes involved in the delivery of a construction project, highlighting the project delivery stages from planning through to completion. A simplified version of the stages is presented in Table 1.1, showing the risks of corrupt behaviour at each stage and the participants involved. The focus of the discussion is on developing countries, particularly the countries in sub-Saharan Africa (SSA) and on the delivery of publicly owned construction projects.