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“Corruption in large-scale public projects is a daunting obstacle to sustainable development,” said Peter Eigen, Chairman of Transparency International (TI), launching the TI Global Corruption Report 2005 today. “Corruption in procurement plagues both developed and developing countries,” Eigen added. “When the size of a bribe takes precedence over value for money,” he said, “the results are shoddy construction and poor infrastructure management. Corruption wastes money, bankrupts countries, and costs lives.” TI is the leading international non-governmental organisation combating corruption worldwide.
“Funds being poured into rebuilding countries such as Iraq must be safeguarded against corruption,” Eigen said today. “Transparency must also be the watchword as donors pledge massive sums for reconstruction in the countries affected by the Asian tsunami,” he added. The Global Corruption Report 2005, with a foreword by Francis Fukuyama, includes a special focus on construction and post-conflict reconstruction, and highlights the urgent need for governments to ensure transparency in public spending and for multinational companies to stop bribing at home and abroad.
‘Monuments of corruption’ from the Global Corruption Report 2005:
The Lesotho Highlands Water Project, in which US$2 million were allegedly paid in bribes by Acres International and 11 other international dam-building companies.
The Cologne incinerator project in Germany, where US $13 million was allegedly paid in bribes during the construction of a US$ 500 million waste incineration plant.
The Yacyretá hydropower project on the border of Argentina and Paraguay, built with World Bank support, is flooding the Ibera Marshes. Due to cost overruns, the power generated by Yacyretá is not economic and needs to be subsidised by the government. According to the head of Paraguay’s General Accounting Office, US$1.87 billion in expenditures for the project ‘lack the legal and administrative support documentation to justify the expenditures’.
The reservoir of the Bakun dam in Sarawak, Malaysia, which will submerge 700 km2 of tropical rain forest. The mandate to develop the project went to a timber contractor and friend of Sarawak’s governor. The provincial government of Sarawak is still looking for customers to consume the power to be generated by the project.
The Bataan nuclear power plant in the Philippines, built at a cost of more than US $2 billion. The contractor, Westinghouse, admitted paying US $17 million in commissions to a friend of former president Marcos. The reactor sits on an active fault line, creating a major risk of nuclear contamination if the power plant ever becomes operational.
The Bujagali dam in Uganda, which is currently being investigated for corruption by the World Bank and four different governments after a British subsidiary of the Norwegian construction company, Veidekke, admitted paying a bribe to a senior Ugandan civil servant. The cumulative environmental impacts of Bujagali and other dams on the Nile have never been assessed.