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Construction Sector Corruption in Ethiopia 255
Table 6.4
(continued)
Underlying factors affecting this risk in Ethiopia
Since 2002, Chinese contractors have become major players in the construction of federal
roads in Ethiopia. Initial low prices led many other contractors to leave the market. Prices
have now increased, and there have been several instances of concerns about possible
collusive practices. Some projects have been retendered, but no hard evidence has been
found of such collusive practices occurring in Ethiopia.
Corrective measures recommended by stakeholders in Ethiopia
• Engineer’s estimate should be built up from input costs and made available to all bidders.
• Bid evaluations should be conducted by experienced staff and undertaken in a replicable,
objective manner that cannot be unduly influenced by subjective considerations or bias.
• A sample of bid evaluations should be subject to independent external scrutiny.
Source: Author’s compilation.
a. Though accepted by other stakeholders as being plausible, these examples are neither backed by hard
evidence nor necessarily widespread in the sector.
Table 6.5 Corruption Risks in Construction and Operations in the Construction
Sector in Ethiopia
Value chain stages
Corruption risks at
each stage of the
construction value chain
1. Policy making and regulation
2. Planning and budgeting
3. Management and performance
monitoring
4. Tendering and procurement
5. Construction and operations
6. Payment and settlement of
certificates
Perceived corruption risk at this stage
of the value chain
Now (international
comparison)
High
Med
Low
Trend (without
corrective measures)
High Medium
Med
Low
Reported examples of operational-level
corruption in Ethiopia tend to be opportunistic
and fairly minor
Typical risks as experienced internationally
Where there is a lack of transparency, low ethical and professional standards, and weak
internal controls, this implementation stage of the value chain offers a wide range of
opportunities for corrupt practices. In particular, where a contractor has agreed (at
an earlier stage) to pay a bribe to help secure the contract, he is likely to try to
recoup his outlay during the construction phase. This is most commonly achieved
through various forms of fraud, including supply of inferior materials, falsification of
quantities, inflated claims, and concealment of defects. In many cases, either the
client’s staff or the supervising consultant’s staff will be implicated in such fraud,
typically through agreement to unnecessary variations or approval of incorrect
certificates.
Low
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