Press Release

20 June 2007

Get what you pay for – UK leads the way building transparency in construction


New plans to help tackle $400 billion of corruption in the global construction industry were announced today by the Secretary of State for International Development, Hilary Benn.

At a meeting attended by international construction firms, NGOs and representatives from Vietnam, Ghana and Tanzania, Hilary Benn outlined how a new initiative to increase transparency and accountability in the construction sector will work. He also announced that UK will lead the way by being one of the pilot countries for the new initiative.

Hilary Benn said:

“The  global construction industry has a poor reputation for corruption, with a conservative estimate of 10 per cent of its $4 trillion global turnover lost to corruption.

“And the poorest countries suffer the most. Delayed and dangerous buildings mean not being able to get more children into school or safely treat patients in clinics and hospitals. And the poorest countries are least able to afford the extra costs associated with fraud, bribery, and extortion.

“The new initiative will help deliver a ‘get what you pay for’ culture to the industry. It will help create greater transparency around the flow of money, and the quality of roads, schools, hospitals that are built with it.

The UK will lead the way by becoming one of the pilot countries which will have an immediate impact on the UK industry and help build momentum. The benefit for the UK construction industry could be enormous, settling higher international standards for transparency and e 

“The benefit for the UK construction industry could be enormous, setting higher international standards for transparency and efficiency, levelling the playing field, and allowing them to access markets previously out of bounds because of pressure to pay bribes.”

Chandrashekhar Krishnan, Executive Director, Transparency International (UK) said:

“The financial and human costs of corruption in the construction sector are staggering. We therefore welcome this initiative by DFID. Governments, the private sector and civil society, who are working together successfully to promote revenue transparency in the oil and mining sectors, now need to combine forces to reduce corruption in this major sector.”

The Construction Sector Transparency Initiative (CoST) will bring together the essential players in publicly funded construction projects including government ministries and agencies, construction companies and contractors, and civil society. Working on the principle of making information available to, and accessible by, the public, each country pilot will set up a new framework for making information public on:

  • the purpose and location of a project;
  • its projected cost, and specification; and
  • the quality and cost of the final outcome.

Today’s meeting will finalise details of the initiative and agree the next steps, including the countries that will take part in a two year pilot of the scheme.

Putting such information into the public domain to improve accountability and efficiency has been successfully trialled by the External linkExtractive Industries Transparency Initiative (EITI), which started in 2002 and has helped reduce corruption in the natural resource mining industries in countries such as Nigeria.

DFID has, as part of its anti-corruption strategy, recently announced a similar initiative for the procurement, distribution and supply of drugs in developing countries called the Medicines Transparency Alliance (MeTA).

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Notes for editors

1. In 2006 the Department for International Development proposed extending the concept of the Extractive Industries Transparency Initiative (EITI) to the defence, health and construction sectors to improve transparency, value for money in public procurement, and increase the scrutiny of public spending.

2. DFID prepared a concept note outlining the initiative in March 2007 that was the subject of consultation in four countries: Vietnam, Ghana, Tanzania and the UK.

3. The construction sector plays a vital role supporting social and economic development but it is consistently ranked as one of the most corrupt areas of economic activity. The 2005 Global Corruption Report of Transparency International (TI) focused on construction and reconstruction in post-conflict situations and detailed the economic and social costs of corruption. A report from the American Society of Civil Engineers in 2006 estimated that 10% of the annual global turnover of the industry, $4 trillion, is lost to corruption. An OECD report in 2005 detailed widespread corruption in public construction contracts and stated that costs can exceed 20% of the contract value. Transparency International suggests that these are conservative estimates.

4. Hilary Benn was named Ministerial champion for addressing international corruption by the Prime Minister, Tony Blair, in June 2006 as part of the UK’s new crackdown on international corruption.  More information about how DFID tackles corruption and other transparency initiatives.

For further information, contact Nic Fearon-Low on 020 7023 0533 or 020 7023 0600, e-mail pressoffice@dfid.gov.uk  or call our Public Enquiries Point on 0845 300 4100.