By Maria da Graça Prado, Senior Policy and Research Adviser and Charlotte Broyd, Senior Communications Manager, CoST

Covid-19 has exposed critical gaps in healthcare systems worldwide.

In response, governments are scrambling to address chronic under-investment in health service delivery by rapidly boosting public spending on vital equipment, medicine and temporary health infrastructure.

The use of emergency procurement measures to do so has raised concerns that transparency, participation and accountability could be compromised, resulting in less scrutiny of public spending and opening opportunities for corruption, mismanagement and inefficiency.

CoST – the Infrastructure Transparency Initiative (CoST) generates data which can provide relevant sectoral trends and help deliver better infrastructure. As recovery plans are announced worldwide, we looked into the data from a sample of health-related projects that was independently reviewed during 2016 – 2019 for ‘CoST assurance’ – the process of highlighting key issues on the data disclosed by our member countries.

The sample assessed is small – 18 projects implemented in seven countries (Afghanistan, Costa Rica, Guatemala, El Salvador, Honduras, Malawi and Thailand) – covering design, construction, expansion, and project remodelling and equipping. This represents 6% of all projects subjected to CoST assurance during the timeframe and a total investment of approximately $400 million.

Despite the small representation, these data provide indicative governance and performance issues affecting health infrastructure delivery which can be separated into three key categories:

  • Low levels of transparency

  • Lack of market competition and

  • Poor financial management.

These challenges and their implications on Covid-19 recovery are explored below.

Challenge 1: Low levels of transparency

Our analysis indicates that health infrastructure has lower levels of transparency compared to other sub-sectors. An average of 44% of the data required by CoST’s Infrastructure Data Standard (CoST IDS) was disclosed, whereas in the roads sector, 57% was disclosed across the countries.

Although procuring entities were cooperative in providing data upon request, the data made readily available on public e-portals have been limited. In the case of the Cobán Hospital in Guatemala, subject to CoST assurance in 2018, only data related to the project purpose, location, description of beneficiaries and the supervision contractor was available on Guatecompras.

The worst scenario was observed in Honduras where no data on the implementation of the Siguatepeque Policlinic Hospital were disclosed on the country’s procurement platform SISOCS in 2018. And low transparency in the delivery of health infrastructure in Honduras was not limited to this one project. Looking at all data available on SISOCS indicates that no projects were disclosed on the portal by the Health Secretary (SESAL) in 2019 and 2020.

Evidence of health projects being illegally awarded in past emergencies have cost the country $67 million in kick-backs

Even when disclosure is high, as in the construction of the Victor Manuel Hospital in Costa Rica with 82% of the CoST IDS data points available on open channels, cautious optimism is warranted. In this case, the project was awaiting adjudication at the time of assurance so it remains unknown whether the level of transparency will hold as the project, considered one of the most ambitious in the country, is implemented.

Challenge 2: Lack of competition

A lack of bidding in competition can expose potential violations of open procurement rules. Calls for bids that go out to a limited number of companies, unreasonable shortlists of competitors and evaluation criteria tailored to a specific bidder are some examples of these violations.

Low competition is not necessarily a red flag. The presence of only one bidder in the construction of the San Miguel Hospital in El Salvador seems a product of the size and complexity of the project, with no procurement violation identified by CoST assurance.

On the other hand, the risks associated with a lack of competitive bidding as found in the construction of the Cobán Hospital could be amplified in crisis response and in contexts where transparency is already a challenge. Evidence of health projects being illegally awarded in past emergencies have cost the country $67 million in kick-backs. The district of Baja Verapaz, close to where the Cobán Hospital is being built, was one of the departments participating in the bid collusion which involved senior public officials including governors, congressmen, mayors, public aides and Ministry of Health representatives.

These findings invite further scoping into the underlying cause of low competition, to investigate whether it is due to a low pool of competitors in a position to bid, an incompatibility between the size of projects and the local market, or if it is related to a more fundamentally issue of integrity.

Challenge 3: Poor financial planning and management

In a previous analysis looking at all infrastructure sub-sectors we found that inadequate project preparation and tender management were key matters affecting project implementation. In healthcare projects both issues were intertwined. In Malawi, the proposal initially selected for the design and construction of the national cancer treatment centre at the Kamuzu Central Hospital exceeded the available budget by 174%, highlighting issues of inaccurate project planning and failures in the tender process to ensure proposals were kept within budget.

Lack of transparency, participation and accountability risks turning collaboration into collusion

A lack of financial planning was a common issue identified in 30% of the sample projects. And in the construction of the cold-room building at Mzuzu Hospital also in Malawi poor financial control led to the misallocation of project funds. CoST assurance identified that the project was suspended in the early stages because funds provided by the Global Alliance for Vaccines and Immunization (GAVI) went missing, prompting GAVI to request the government to set up a dedicated account to allow a direct control of the project’s spending by GAVI and partners UNICEF and PricewaterhouseCoopers.

What does this mean for the Covid-19 recovery?

The global pandemic has stressed the importance of strong, resilient and accessible infrastructure that can respond to peaks in demand and withstand shocks. If new social infrastructure is needed to better respond to future crises, these constructions must be adequately planned and assessed to avoid mistakes of the past.

Whilst the healthcare projects we looked at are a small sample they give an indication of the level of opacity in the sector and the challenges impacting delivery. A lot has been said lately about the need for collaboration in a post-Covid world, but the lack of transparency, participation and accountability risks turning collaboration into collusion.

Open data standards such as the CoST IDS and our more recent Open Contracting for Infrastructure Data Standard (OC4IDS) can address these challenges, maximise transparency and help to identify red flags across the project cycle so that appropriate visibility is given to public spending. The experience of CoST Ukraine in using an analytical tool connected to its online platform is allowing investors, civil society and journalists to easily monitor project implementation remotely. Innovations such as these are a key asset in times of Covid-19.

They can ensure that new infrastructure investment plans are guarded against waste and corruption and leave no one behind. — Maria da Graça Prado

We want to hear what you think about this article. Pitch an article to us or send your comments to hello@apolitical.co

(Photo credit: UnSplash)