Infrastructure projects are essential for development, connecting communities to vital services and bolstering resilience to challenges like climate change. However, the sheer scale of planned global construction – estimated to reach USD17.5 trillion annually by 2030 – introduces significant risks of corruption, mismanagement, and inefficiency.
Governance Risks in Infrastructure Spending
Australia is actively involved in infrastructure development both domestically and internationally. The Australian Infrastructure Financing Facility for the Pacific (AIFFP) has allocated AUD4 billion to projects in the Pacific, including initiatives like the Solomon Islands–Australia Community Partnerships, and supports the Indonesia Climate Infrastructure Partnership. Despite these investments, examples from Australia and abroad demonstrate the potential for projects to falter due to poor oversight.
Victoria’s “Big Build” and projects related to the Brisbane 2032 Olympics are currently facing cost overruns and concerns about rushed approvals. Globally, the Jakarta–Bandung High-Speed Rail in Indonesia, the Mattala Rajapaksa Airport in Sri Lanka, and the Mombasa–Nairobi Standard Gauge Railway in Kenya have all experienced issues stemming from weak governance. Transparency International Australia (TI Australia) estimates that up to USD6 trillion could be lost each year by 2030 due to these issues.
The Importance of Early Scrutiny
Problems often begin during the project-selection phase, even when national planning exists. Weak governance at this stage can negatively impact the entire infrastructure lifecycle, leading to ineffective projects and economic setbacks. This is particularly critical as the world invests in the energy transition, requiring rapid development of renewables and climate-resilient systems.
Currently, civil society organizations are often excluded from these crucial early stages. While they may become involved during construction, key decisions have already been made, and risks are already embedded in the process.
A New Tool for Accountability
To address this gap, TI Australia developed the Infrastructure Corruption Risk Assessment Tool (ICRAT) in 2021, building on previous work with the Mining Assessment and Corruption Risk Assessment (MACRA) tool. ICRAT provides a framework for civil society to assess project prioritization, transparency, and potential corruption risks – including political interference and inadequate feasibility analysis.
Piloted in Indonesia and the Solomon Islands in 2023, ICRAT has already demonstrated its effectiveness in informing discussions with government agencies and advocating for clearer project criteria and increased transparency. The tool is now being expanded to four additional countries in Africa and Asia.
However, tools alone are insufficient. Civil society organizations must build credibility, raise public awareness, and forge coalitions with media, academia, and professional associations to effectively influence decision-making. Leveraging existing government commitments and engaging with donors can also catalyze policy reform.
Frequently Asked Questions
What is the AIFFP?
The Australian Infrastructure Financing Facility for the Pacific (AIFFP) is a program through which Australia has made AUD4 billion available for infrastructure development in Pacific nations, with further expansion proposed.
What is ICRAT designed to do?
ICRAT is a tool developed by Transparency International Australia to give civil society a framework to assess infrastructure projects early in the planning stages, identify potential corruption risks, and advocate for more transparent and accountable processes.
What examples were given of infrastructure projects that faced challenges?
Indonesia’s Jakarta–Bandung High-Speed Rail, Sri Lanka’s Mattala Rajapaksa Airport, and Kenya’s Mombasa–Nairobi Standard Gauge Railway were cited as examples of projects that experienced issues due to weak oversight.
Ultimately, ensuring integrity in infrastructure development requires a shift in focus – starting upstream with robust processes and meaningful engagement from civil society. Early scrutiny can be the difference between transformative projects and costly failures, ensuring that infrastructure truly benefits the communities it is intended to serve.