ASi" kUCTURE FlOR DEVELOPMENT

Box 2.6' AGETIPs: inrvolving the private sector in Africa's urban infrastructure
If govrnments do poorly in executing infratructure Contracting out promotes the development of local
projects, why niot leave it to the private sector? That is contrcting and consulting firms byaceating demand for
preciseiy what is happening in ten West African cairn- their services. The ACETIP in. Senegal now has 950 local
tries. The Agences dl'Exikutionf des Travaux.d'int6rf1: contractors and 260 local consultants on its books. It has
.Public (AGETIPs)-nonproflt nongovernmental agen- reduced barriErs to entry and made life easier for new,
cies fir executingpublic works-enter into contractual weaker firms by paying contractors every ten days; pubarrangementts
with governments to carry out infrantruc- lie entities typically take several months.
tum projects. The AGErIP i-n Senegal, wthich has twenty The autonomiy given to AGETIP managers enables
professional staff memnbers, has handled 330 projec:ts in them to run efficienL impartial, and transparent operaseventy-eight
municipalities. It hires consultants to pre- lions, and the agences' protected legal status shelters
pare designs and bidding documents and to suipervise them from political pressures. A strong management inworks,
issues calls for bids, evaluates bids and signs con- formation systemt and institutionalized personal actracts,
assesses progress, pays contractors, and repre- coDuntabilityf 'enable AGETIP managers to account for
sents the owvner at the final handover of the works, every project, supplier. payment voucher, and outstand-
ACErIPs use an integrated approach to design ing bill All consolidated project accounts are indepenworks
that promotes competition while facilitating ac- dently audited every six months. Theme are also bicess
foDr small contractors. Project designs take into monthily managem-ent audits and ant annual technical
aiccountlocal constraints, labor markets, the limlited out- auditL
put ipoten of small contractors the weak projec- An evaluation of AGETiP
identification capability of local governments, the avail- "corruption-free procedures!" have allowved them to
ability of consultant architects and eniees and the* complete projects largely on schedule with a cost overeconomic
and social rationale of subprojects under.con- run of only 1.2 pearet of the portfolio (cost overruns in
-sideration. Project eligiblt and selection criteria are public procurement average 15 percent of original estispelled
out, with.particular emphasis on labor-intensive mates). ACETIPs routinely obtain unit prices 5 to 40 permnethods.
Open competitive -bidding weeds out ineffi- cent lowe'r than- those obtained by the admiinistration
dent opeatom
thogh official bidding.
-~~~~~~~ta aciite shu ht hi
tio des x Travaux dInt&t Public (AGETIPs) in West for example, are routinely contracted out to plant
Africa. Management responsibilities for urban infra- suppliers. or specialists in most developing counstructure.
projects have been contracted out to non- tries. Service on contract is also a standard
profit, nongovernmental agencies that in tur con- arrangement for the design and construction of
tract out the public works involved. Increased maajor capital works- because of the obvious bemianagement
involvement and accountability have fits from speciaic zed engineering knowledge and
improved project performance- The management of construction skills The infrastructure supplier sets
contracts has improved and so has iplementation the performance criteria for the contracted serthrough
allowing smaller firthis, with more lbopr- vices, evaluates bids from competitive tendering
intensive techniques, to participate in goverment supervises performance, and pays agreed feesfor
contracrs. In Senegal the use of AGETIPs has led to the services involved. Contracting out is a versatile
10 to 15 percent reductions in unit costs in local in- means for carrying out many otuher tasks, and the
fra-structure projects (Box 2.6).
base of developingu countr experience is grwng.
Standard professional seivices-such as auditing,
Contracting out services data processing, and recruitment-are also often
contracted OUL Railways in Pakistan have con-
Contracting out services is becoming poput ar withi tracted out such activities as ticketihig cleaning,
public infrastructure providers. It provides a fled- and catering.. Private contractors in Kenya do limble
and cost-effective tool for increasing responsive- ited locomotive repair and maintenance for the
ness to users and taps expertise too eoensive to state railroad. Meter reading and fee colrections in
maintain permanenUty on public payrolls. It also the water supply and sewerage sectors have been
permnits competition among multiple providers, handled througlh service contracts in Chile since
each with short and specific contracts.
the 1970s. Santiago's public water company even
tContracting out is most commnon for mainte- encouraged employees to leave and compete for
nance services. Major overhauls of power stations, service contracts.
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