Understand the root that contribute to the problem of corruption in the building industry

Understand the root that contribute to the problem of corruption in the building industry

• poor working conditions
• Lack of ethics or immoral principle - as seen in recent high profile case of contract for sex
• Poverty 
• High rate of uncompleted or delay in completing projects is due to corruption practices in the construction industry.
• Underpayment or insufficient compensation for professional works done. The consultant's inadequate fees is not enough to defray their expenses on the project. Or the consultants may feel that they are not professionally compensated for their expertise and design works.
• The principle of economic eg the exchange that people are paid for work they do. If wages are low people will be ready to earn extra money dishonestly and limited resources force people to pay bribes to obtain things. Lack of an open market means that a few in powerful positions can demand payment for necessary commodities.
• Economic recession

The construction industry depends on the strength of the country's economy. Economic growth is usually accompanied by a construction boom and vice versa. Notably, it is during periods of recession in the construction industry that corruption flourishes, possibly due to there being less work for contractors and intensified competition. As a result contractors may do everything possible to obtain work in order to survive. Also during recession, companies may not receive payments due to others that go under. This may cause them to resort to corruption to get back their money. (I had personally encountered such a case in my career).

However during boom times we must not discount the level of corruption existing too as emerging countries like China will see equally more corruptions as the people are emerging from being poor and would thus be hungry and greedy for more money.

• Competitive bidding

The construction industry is characterized by a large number of heterogeneous and fragmented firms engaged in intense competition. The industry is project based with the majority of projects being designed and built for a price established through competitive bidding / tendering systems.

Collusive bidding practices prevail in the construction industry especially amongst small-scale contractors who want to protect their existence. The firms will prior agree to bid at an inflated bids as normal industry practice is to award to the lowest or second lowest.

The construction industry has its own characteristic methods of project procurement, which are different from other industries. Contractors and consultants obtain their work through open or selected tendering, or by negotiation. These processes may also prove to be competitive in so far as contractors and consultants fear that their chances of being awarded a particular contract are zero. It is at this point that ideas of corrupting the tender-award/decision making parties arise.