Complex contractual structure

Infrastructure projects have a large number of project participants (e.g. project owner, funders, contractors, sub-contractors, suppliers, consultants etc).

These participants are linked in a complex contractual structure, which can have 100s of contractual links.

Each contractual link provides opportunities for some form of corruption.  For example:

• cartels to win the contract
• fraudulent concealment of defective work
• fraudulent inflation of claims for payment
• bribes to win contracts or approve inflated claims.

The cost of this corruption is frequently passed up the contractual chain and is often ultimately borne by the project owner.

The following diagram illustrates a possible contract structure.  However, on a large project there are likely to be many more organisations than shown, particularly in the green boxes.