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Demand total transparency

Although it is considered a taboo to talk about the corruption related to awarding contracts for infrastructure projects in the B2B media (at least in India), I am making a start here. No, I won't be getting into specifics (not yet). Just making a few observations (to start with).
I had the opportunity to talk to a small time sub-contractor (cant' share the name) who was invloved in a couple of road projects in Mumbai. And I mentioned to him about the poor state of many roads in the city. His answer was quite revealing. Although he did not talk about any particular project, he implied that many projects work that way. He told me that in order to get the contract, the contractor and the sub-contractor have to grease the palms (bribe!) of the people who issue these contracts. This drastically reduces the margin of the contractor (and the sub-contractor).

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COMMENT   We need to study the safety efforts taken in every site to take into the cost part of it. Safety costs. Any noncomplianc   1 Comments Read more comments »

In order to make up for this loss, they compromise on the quality of materials and construction.
Was this person lying? You figure out. Being in the industry, you would know how it functions. And this is just one example. Okay, don't lose heart. We have some good news. According to the latest edition of the Kroll Annual Global Fraud Report, the global construction, engineering and infrastructure industry actually saw a considerable dip in fraud activity. Well, companies lost an average of US$6.4 million over the last three years. What's so good about it, you could ask.
Actually, the new figure represents less than half of last year’s amount of $14.2 million. Incidentally, the construction, engineering, and infrastructure companies registered a below average loss compared to other sectors, with the financial services industry being hit hardest by fraud over the past 12 months. (By the way, the findings are the result of a survey Kroll commissioned from the Economist Intelligence Unit of more than 700 senior executives worldwide.)
While it is expected that fraud may increase again, several methods of fighting it have been suggested. I am listing them down.

• Keep an eye on procurement
• Analyze the scope of work and costs submitted in bids
• Investigate anti-fraud related background of vendors involved (this includes the management from top to bottom)
• Cross check the legitimacy of costs in all requisitions or invoices
• Strictly monitor the actual work, the labour and the materials
• Demand total transparency
• Enhance communication to facilitate sharing of critical information.

And Who will do it for you? Don't you know the answer already?

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