Tue, May 09, 2006 page8

• Fighting corruption in construction

  • By Chern Jenn-chuan 陳振川
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  The Global Corruption Report 2005, published by the international non-governmental organization Transparency International (TI), sums up the situation on corruption and anti-corruption efforts in 40 countries and demonstrates the gravity of the issue of corruption in public construction projects worldwide. TI chairman Peter Elgen pointed out that corruption in large-scale public projects is a daunting obstacle to sustainable development.

  "When the size of a bribe takes precedence over value for money, the results are shoddy construction and poor infrastructure management. Corruption wastes money, bankrupts countries and costs lives," Elgen said.

  The global construction sector, worth approximately US$3.2 trillion, is huge, and the corruption found within it has significantly worsened global corruption overall. TI estimates that bribery and corruption in project procurements alone raise the final cost of construction by at least 10 percent, incurring annual losses of about US$320 billion worldwide. TI ranked corruption in the construction sector above that in any other sector (including arms and oil procurement), demonstrating just how serious the situation is.

  Taiwan is not among the countries surveyed by TI, but it is clear that the problem also exists here. Look at the public's familiarity with corruption in public infrastructure projects, the involvement of elected representatives in construction waste soil management and other public constructions and the indictments of several local government officials over their involvement in the 921 earthquake reconstruction project. Add in the recent wave of controversy from large-scale construction projects. In tens of thousands of local construction firms, we see even graver problems: Loosely organized management structures, variable quality standards, dodgy practices, intervention by public representatives and a lack of regulation in the professional code of ethics.

  Taiwan is virtually alone in the amount of trust placed in the words of academics on issues regarding construction procurement. Unfortunately, these academics have themselves slowly become tainted by corruption. In order to survive, some businesses are now turning to public relations, trying to build relations with academics involved in evaluating construction companies. Political intervention and the inability of chief executive officers to remain impartial are strangling fair competition in the market.

  In recent years, the system for evaluating the most advantageous tender has frequently been abused, especially by local governments. The Public Construction Commission's frequent amendments to regulations governing procurements have only complicated the matter, while doing little to prevent the use of unacceptable procurement practices. Nor is the answer a return to the system of awarding the tender to the lowest bidder, as this will only result in vicious price competition and substandard work.

  Similarly, we also see that the execution of project evaluation reports lacks fairness, objectivity and professionalism. There is clearly political involvement in the construction sector, especially in the operation of large-scale construction consultancies, which assist the heads of construction companies with design, construction management, procurement in bid preparation and professional management, as well as involvement in turnkey and build-operate-transfer projects.

  It is extremely important for these consultancies to assume an independent and impartial role, and corruption is only exacerbated if third-party involvement causes a consultancy to switch loyalties and to collude with its contractors or some other parties, altering the original designs and increasing budgets in order to add to their profits.

  Any actions taken by the public civil engineering sector can exert a far-reaching influence on national security and people's lives and property, as they can affect the allocation of the government's massive financial resources. Therefore, it is absolutely necessary for these firms to act in accordance with engineering ethics and carry out their responsibilities objectively, impartially and cautiously.

  When politics comes into the equation, the political hue of the engineers becomes an issue. Their every word and action is closely watched, and this becomes a factor when it comes to doling out promotions. This complicates the issue still further, as engineers pander to their superiors and elected representatives. The question of how engineers can maintain their objectivity thus becomes even more problematic.

  Furthermore, whenever a transition of political power takes place, executive-level officials must also be replaced, dealing a blow to those consultancies that have to accumulate their experience and contacts over a long period of time. If we cannot rule out the fact that the new government will put in their own people, we should follow the example of more developed nations and hand these functions over to the private sector. If the involvement of financial groups is a matter of concern, the chairperson of the firm could also consider hiring professionals who could be trusted to maintain the principle of fairness and justice through objective and open procedures.

  A concerted effort is needed against corruption if we are to prevent allocated funds from being diverted into the pockets of people who have no business receiving them. The engineering industry should call on the government "not to ignore the reforms of the engineering sector," which is mostly composed of decent engineers, and to remember its self-proclaimed duty to establish a clean administration and remember its responsibilities to the nation and society.

  After all, political power is transient, whereas safeguarding people's rights and carrying out the nation's sustainable development should be the government's long-term goals. The public's tax dollars are being squandered, and future generations will be the ones to bear the brunt of the financial burden. Substandard public construction projects will result in a weakened economy unless the government does something about the situation.

  Faced with the challenges of globalization and a difficult domestic construction environment, the sector should fight against corruption, reject political interference, bring together the talents of experts in various fields, join the international anti-corruption drive, develop engineering ethics and put them into practice.

  Hopefully, the government will one day carry out its clean politics and administrative efficiency, just like the governments in Finland, Singapore and Hong Kong. When this happens, engineers will be able do their jobs with dignity.

  Chern Jenn-chuan is a professor at National Taiwan University and chairman of the Asian Civil Engineering Coordinating Council.

  TRANSLATED BY LIN YA-TI

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