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7.6. Public procurement and the delivery of infrastructure projects

Public procurement is one of government activities that is especially susceptible to risks of misuse, fraud and corruption. While effective delivery of infrastructure projects represents one of the major mandates of governments in order to ensure sound provision of public goods and services, the risks involved in these projects are often more complex and have higher potential consequences. Infrastructure projects have direct implications on a country’s economic capacity, human development, social inclusion and environmental sustainability. As such, government’s role is more important in upholding the key principles of public governance, such as transparency, integrity and accountability, at all stages of infrastructure projects. Such stages range from where a project is planned and financing schemes are defined to making sure that the project is delivered in a cost-effective and secure way.

When deciding on the delivery mode of infrastructure projects, governments and contracting authorities assess and strike a balance between the associated risks, their allocation and value for money. In four Western Balkan economies, there is a dedicated unit in central government that is in charge of developing policies for infrastructure projects, including choosing their delivery modes. In the other two, these policies tend to be developed on an ad hoc basis. In comparison, more than half of the OECD countries (54%) reported that they develop these policies on an ad hoc basis. Having a dedicated entity could help reinforce consistent application of infrastructure governance policies, and also ensure that the choice of delivery mode is based on project and market characteristics.

In this context, a public procurement framework could be used as a governance tool for infrastructure projects and to shape its efficient and effective delivery. Infrastructure investment continues to be high in the region, and is an important growth driver. Safeguarding the public interest and investment effectiveness remains central to economic and social development. In the Western Balkan region, public procurement regulatory frameworks are at least partially applicable, and they apply to all infrastructure projects in North Macedonia and Serbia. Public procurement frameworks could support consistent application of major governance principles – including transparency, fairness and competition – and help mitigate the risks that are associated with procurement of major infrastructure delivery.

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Methodology and definitions

Data for the Western Balkans – Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia – were collected through the 2019 Survey for the Western Balkans on Public Procurement. Data for the OECD countries were collected through the 2018 OECD Survey on the Implementation of the 2015 OECD Recommendations on Public Procurement to which 31 countries responded.

Public infrastructure is defined as facilities, structures, networks, systems, plants, property, equipment or physical assets and the enterprises that employ them, that provide public goods or goods that meet a politically mandated, fundamental need that the market is not able to provide on its own.

Further reading

OECD (2019), Reforming Public Procurement: Progress in Implementing the 2015 OECD Recommendation, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/1de41738-en

OECD (2015), Recommendation of the Council on Public Procurement, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0411

Figure notes

Data for the Czech Republic, Luxembourg, Switzerland, the United Kingdom, and the United States are not available. On data for Israel, see http://doi.org/10.1787/888932315602

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7.11. Entity (or entities) in charge of developing policies for infrastructure projects, 2019
7.11. Entity (or entities) in charge of developing policies for infrastructure projects, 2019

Source: For the data on the Western Balkans, OECD (2019), 2019 Survey for the Western Balkans on Public Procurement; For the OECD data, OECD (2016), Survey on Public Procurement.

 StatLink https://doi.org/10.1787/888934129467

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7.12. Application of public procurement law and regulations to infrastructure projects, 2019
7.12. Application of public procurement law and regulations to infrastructure projects, 2019

Source: For the data on the Western Balkans, OECD (2019), 2019 Survey for the Western Balkans on Public Procurement; For the OECD data, OECD (2018), 2018 OECD Survey on the Implementation of the 2015 OECD Recommendations on Public Procurement

 StatLink https://doi.org/10.1787/888934129486

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