Applying Financial Integrity to Highway Projects

Fraud and corruption exist at all phases of highway development, but effective tools can reduce its impact, participants learned at a recent IRF seminar,

Fraud and corruption on highway construction projects represent highly damaging practices whose mitigation requires constant vigilance by trained project managers and public authorities. Expert estimates suggest that up to 5% of Highway Agency funds may be lost to fraud and corruption. But the wider impacts are often felt across society: the effect of a cartel is to raise prices above what they would be in a competitive market, translating into lost opportunities for growth.

According to the World Bank, the most common forms of wrongdoing are collusion among firms bidding on a project and fraud and corruption in the execution of the resulting contract. Collusion, bribery, kickbacks and overcharging all affect the financial viability of a project. When construction materials are substituted and quality controls bypassed, it is the useful life of the road and the safety of the user which are at stake.

Encouraging ethical project management practices has long been an important topic for the International Road Federation. Taking a further step, IRF is now offering the first in a series of certified training course dedicated to the issue of fraud & corruption on highway projects

Led by Michael Avery, an international expert in financial integrity on transportation infrastructure projects, the course will describe the extent of fraud and corruption, develop specific risk profiles and detail available internal control instruments. “There is good and bad news”, notes Michael Avery “The bad news is that fraud & corruption exist at all phases of highway development. The good news is that effective tools have now been developed to greatly reduce its impact”. The course will examine practical case studies, apply lessons learned and encourage delegates to develop organization-level action plans.