Wednesday 28 September 2011

Quebec construction riddled with corruption

Jacques Duchesneau, head of a special anti-collusion unit in Quebec that has been investigating alleged corruption in the construction sector, yesterday testified to a legislative committee and called for a two-phase inquiry.

His report suggests that the sector is riddled with corruption, in the forms of collusion, price-fixing and mis-forecasting.  Costs are over-estimated and the excess profits are channeled into the pockets of organised crime gangs or the coffers of political parties.

Quebec's situation looks bad, but construction is corrupt in many countries. In the UK, a 2006 survey of more than 1400 construction professionals carried out by the Chartered Institute of Building found that 41% of respondents had personally been offered a bribe.

The sector is high-risk for three reasons.  Government is a key client. Projects tend to be large and hence difficult to monitor. And forecasting for long-term projects where so many factors are uncertain is inherently difficult.