Infrastructure is our big sector focus for this year. In this blog, Ben Fernz, our new Head of Infrastructure explains why and what we are planning to do.
Infrastructure is where it’s at: everyone is talking about how we can build more hard, physical assets such as schools, hospitals, airports, bridges and roads that are either owned by the public or privately-financed for public use. It is a focal topic at global meetings like the G20 or the UN High-Level Political Forum on Sustainable Development. And it is easy to see why: according to the Global Infrastructure Hub, an estimated $97.5 trillion in infrastructure investments is needed to meet the Sustainable Development Goals by 2040 – but, in practice, investments are likely to fall short of this amount by as much as $18 trillion. There is also a huge efficiency gap (approximately 30%, according to the IMF) between the money that is spent and the coverage and quality of the resulting infrastructure.
Underpinning these issues is the very nature of the infrastructure and construction industry – with its long and complex supply chains – which increases the risks of losses from inefficiency, mismanagement or corruption. The recent Odebrecht and Carillion scandals tell us that we need much more and much better data to address these concerns. This is where open contracting can help, especially in high-risk environments. You can see our full pitch on how to the G20 here.
Fortunately, we have some great partners working with us! We’ve been lucky enough to work with CoST – the Infrastructure Transparency Initiative both at the international level as well as with their country programs across the globe. Beyond CoST, Mexico City’s huge new airport project has already been publishing OCDS data and there have been some great CSO monitoring efforts such as the Torre de Control (by watchdog organisation Poder) which has raised concerns over conflicts of interest. Meanwhile, activists across Nigeria have been using Budeshi and the OCDS to track clinics across the country (#OpenItToFixIt) and across Lagos.
Yet, we feel that we can do more to add value and insight (and hopefully a bit of sassy campaigning too). Here’s our plan.
1) Data: As a first step for advancing open contracting in infrastructure, we will further deepen our partnership with CoST and work together to ensure that the Open Contracting Data Standard (OCDS) can be used to convert or enhance CoST’s Infrastructure Data Standard (IDS) into machine-readable open data. The good news is that most of the information in the IDS can already be expressed using the OCDS schema. But, you know we are always user-driven, so let’s see what additional needs exist and how best to express them. One area is making sure there are consistent project identifiers to bundle contracts together so that we can understand how the project is performing overall. Another is to incorporate a consistent approach to reporting on the reasons for project or contract changes (time and cost overruns, scope or design variations etc).
We are embarking on a focussed piece of work with CoST and others to do exactly this. There is already have a treasure trove of learning from Honduras and Ukraine too. In Honduras, 22 PPP projects are already being published using the OCDS, IDS and World Bank PPP framework. In Ukraine, the Prozorro approach is being used for smaller infrastructure projects (and parts of larger ones).
Meanwhile, the Global Infrastructure Hub and investors are leading a global dialogue about how to support infrastructure as a new asset class. The aspiration is that it becomes a discrete investable product with properties somewhere between a stock and a bond that may enable it to be packaged up and sold to investors, triggering a wave of new investment. Not everyone likes this idea of financialisation but in assessing how people will want to use the data, we should also consider what additional data fields are needed to maximise its utility to infrastructure investors and financial users across the world. In doing so, we will work with the UN Principles for Responsible Investments (UNPRI), Global Infrastructure Investors Association and the Long Term Infrastructure Investors Association to understand precisely what infrastructure performance data will be needed.
2) Implementation: Lots of open contracting implementers are already interested in infrastructure, and many existing CoST publishers are eager to upgrade their disclosures and to scale faster. This includes Costa Rica, El Salvador, Guatemala, Panama, Ukraine and Thailand. In tandem, we will be exploring exciting greenfield prospects such as Argentina, Australia, Indonesia and Malaysia, as well as strategic agencies such as the London Mayor’s Office and the Panama Canal Authority. We are especially excited by the prospect of supporting mega-sporting events like the Paris 2024 Olympics too.
3) Impact: Of course, what really matters is evidence of impact. Field experiments tell us that active civil society monitoring coupled with government enforcement can deliver better value for money from public works spending, reducing waste by over 50%. So with our friends at CoST, we will be digging into the systemic changes driven by data and political power in Honduras. The CoST Honduras Multistakeholder Group has worked tirelessly to enable a catalogue of improvements, including cost and time savings, design improvements as well better environmental and health and safety safeguards. It wasn’t easy: there were numerous challenges and vested interests for CoST Honduras to overcome. In continuing our work to deliver a more robust evidence base, we will also be looking at impacts in Ukraine. We will also look at how we can step up our investment in building up civil society capacity to monitor infrastructure projects and contracts.
4) Private Sector: Talking infrastructure also gives us a direct window into the private sector. Many in our field have been talking about the need for stronger private sector involvement but what that involvement is or could look like has never been fully articulated. We will make a concerted effort to engage with global and regional private sector organizations such as the World Federation of Engineering Organizations, European International Contractors and Regional Chambers of Construction for Central America to understand their needs and appetite for voluntary action. We hope to develop a concrete, actionable menu of options for when and how they can add value.
5) Towards a new norm: Finally, we will step up our efforts to secure endorsement or adoption of open contracting principles for infrastructure at the global and regional levels. Infrastructure is a priority for this year’s G20 under the Argentine government. Public service delivery is a key area for the OGP. We will continue to work with our existing partners such as Transparency International and the Global Infrastructure Hub whilst building new relationships with specialist infrastructure organisations including the Global Infrastructure Anti-Corruption Centre, 100 Resilient Cities and others, to create a new norm for infrastructure that is ‘open by design’.
We have ambitious plans for open contracting in infrastructure but we can’t do this alone.
We need your expertise and support to drive these improvements to infrastructure investment and delivery: Where are the roadblocks and potholes? Where are the traffic jams? Are there any speed traps? Share your ideas, let us know how we can support your work, and what’s blocking the way so that together we can deliver ‘open infrastructure’ for all.
Photo: Construction works for the Panama Canal expansion project. Panama. Gerardo Pesantez / World Bank