Private sector

The role of the private sector in enhancing infrastructure transparency

Private sector, government and civil society members of the CoST Panama MSG

Within a national economy, private companies bid for and deliver publicly-funded infrastructure projects. Responsible companies take pride in delivering high quality projects, on time and with cost-effective use of public funds. Where companies do not behave responsibly, there is a need to maintain fair competition for all.

Why is CoST beneficial to the private sector?

CoST aligns strongly with the aims of the private sector – it promotes fair competition for contracts and encourages more effective project management by procuring entities.

CoST also limits the opportunity for corruption, which damages both the reputation and efficiency of the sector.

Potential benefits of CoST to the private sector:

Better procurement creates a ‘level playing field’ and improves industry confidence
Better project management by procuring entities enhances overall project quality and the likelihood of projects delivered on time and within budget
Better financial management can increase access to private capital and more favourable lending terms
Reduced levels of corruption reopens markets which had previously been considered off-limits by responsible companies
Greater transparency and accountability reduces reputational risk from association with projects where corruption has taken place

Private sector benefits at the international level

Sharing lessons with the road industry at the PIARC World Road Congress

CoST is also hugely beneficial to private actors at the international level. For instance, responsible international infrastructure companies seek fair and transparent access to contracts and good management, and will seek work where these conditions are most closely met.

Greater accountability and reduced corruption will encourage international and local construction companies to compete for work. This can have advantages for the national economy and governments because it:

• Enhances the country’s market credibility
• Is a positive factor for inward investment
• Encourages access to credit and loans on more favourable terms.

CoST was delighted to report that its approach was officially endorsed by the global engineering body FIDIC on International Anti-Corruption Day 2019. This encouraged the 102 Member Associations of FIDIC to examine how CoST can catalyse improved practices. With support such as this, the conditions for effective infrastructure investment can be realised.

Read more about how transparent procurement systems benefit the private sector and help advance the Sustainable Development Goals.

Involving the private sector through multi-stakeholder working

The private sector plays a key role within CoST national programmes, notably through participation in multi-stakeholder groups (MSGs) which guide CoST implementation. In every national programme, MSG representatives include those from private companies and professional associations from across the infrastructure sector.

These members bring in managerial knowledge of the sector and they can help to translate the complexities of infrastructure projects to other members of the group. Their involvement also gives further credibility to the MSG as the group increases its engagement with other private sector actors and with government. They can protect the infrastructure sector against any false accusations of wrongdoing and demonstrates a united approach in the call for greater transparency.

Building private sector skills and knowledge

CoST works with influential actors from the private sector to build their capacity on the CoST approach, with a focus on increasing and improving data disclosure. In addition to this, CoST works with influential construction sector bodies to raise awareness on the value of CoST across the private sector. Read more about this training in Afghanistan.

Useful links

Read our full briefing note on CoST and the private sector here.