Today EAP publishes its latest research on the ramifications of corruption in Mega Sport Event (MSEs) infrastructure, a reoccurring issue in MSE history. The research outlines how key issues in infrastructure delivery such as poor planning and ineffective channels to report wrongdoing can be addressed, with our recommendations centred on principles of transparency and collaboration.

The corruption impact

Infrastructure corruption is not exclusive to MSEs and is widely recognised as a key factor in the billions wasted in the sector every year. Yet the nature of the MSEs exacerbates the issue due to politicised decision making and highly complex logistics.

Research has put cost overruns of the Olympic Games at 156% higher than those of common construction projects such as roads (20%).

Corruption also cost lives in both obvious and subtle ways. A poorly constructed bike lane built for the Rio Olympics collapsed causing the deaths of two people. And those who expose corruption are at risk; Jimmy Mohlala a member of the 2010 South Africa World Cup organising committee was killed one day before being due to testify on tender manipulation.

What makes MSEs prone to corruption?

Our research outlined in Changing the game: A critical analysis of large-scale corruption in Mega Sport Event infrastructure projects looks at the unique aspects of MSE infrastructure delivery and found the following characteristics increase the likelihood of infrastructure corruption:

• MSEs involve a complex web of contracts and subcontracts across both national and international levels which lack efficient contract management systems and lead to corrupt practices.
• The events typically avoid putting adequate project data in the public domain and sidestep the use of online platforms. In an OECD assessment only 1 in 10 MSEs used e-procurement systems throughout the entire tender process.
• Despite senior commitments and civil society efforts, MSEs lack effective monitoring mechanisms. For example, commitments were made to use governance tools such as the ‘Clean Games’ project yet widespread corruption was still prevalent in the two events it was intended for, the World Cup and Rio Games.
• Increased interaction between public and private actors (in the case of MSEs) increases collusion. Four of the main construction firms responsible for the 2014 Brazil World Cup and 2016 Rio Games donated almost US$ 94 million to political parties managing event funds.
• Incentives for rent seeking and corruption are encouraged by the cyclical nature of MSEs, stakeholders are guaranteed a reliable source of revenue and past behaviour is often observed and repeated.

The state of contract documentation is such that we are not sure of the entire sequence of events leading to award of contracts. We were also unable to ascertain complete contract-wise payments and outstanding liabilities for each contract.

Comptroller and Auditor General of India – Performance Audit of XIX^th Commonwealth Games p97.

Solving the problem through transparency and collaboration

Whilst there is work to be done to address the issue, the recommendations outlined below are based on what has worked to combat corruption more broadly in the sector and are based on good practice.

1. An effective monitoring mechanism such as the Open Contracting for Infrastructure Data Standard (OC4IDS) could heighten data transparency. The Standard can be integrated with existing government systems and provide valuable insights overtime by comparing data from different contractors. This helps to ensure accurate project bids are submitted and accepted. Data comparability is particularly useful in MSE delivery, as constructions can be cross checked against common infrastructure projects to help highlight red flags.
2. Inadequate project planning is a key contributor to cost overruns and is particularly important to address in MSEs as multiple infrastructure projects are delivered simultaneously. Host governments and infrastructure project preparation facilities could form a partnership before bidding for the events. Working together they could create a master planning process for the event, ensuring an accurate budget and their preparedness to deliver.
3. An approach such as the Open Book Contract Management could improve performance. This shares management costs and performance data between the contractor and the client, helping to incentivise good behaviour.
4. Whistle blower mechanisms have successfully curbed corruption in some areas of MSEs such as doping and must be extended to infrastructure delivery. Such mechanisms are key to behaviour change and could go beyond corruption issues, including to rectify labour abuse and gender discrimination.
5. An MSE integrity pact to legally bind and commit public authorities and bidders to anti-corruption, with civil society monitoring the process, could be invaluable. As with this and several other mitigations, we recommend their inclusion in bidding stages to ensure their roll out and use.

Corruption is a common issue in MSE infrastructure delivery. It costs lives, is a heavy burden to taxpayers and results in poor quality infrastructure. Adopting our recommendations could significantly change the game for the events, delivering infrastructure that genuinely serves communities and leaves a positive legacy.

Useful links

Changing the game: A critical analysis of large-scale corruption in Mega Sport Event infrastructure projects is the second in our three-part series on the key issues in MSEs. To read about part one click here.