Bad weeds can die

Without corruption, each state would have twice the public infrastructure of what has
been really built in the past 30 years

By Humberto Armenta

The endless bureaucracy and existing over-regulation are the ideal fertilizers for
corruption to grow as a bad weed. Mexico needs to uproot this problem. In 2007,
Mexicans “invested” 27 billion pesos in acts of corruption, which is, on an average 8%
of the income of Mexican families, that is, the same amount that is assigned on an
average to housing needs.

Regrettably, the infrastructure sector is not safe from this plague. According to the
Honesty and Efficiency Index in the Generation of Public Infrastructure published by
CEI Consulting & Research, which analyzes accumulated corruption in Mexico during
the past 30 years, on an average, each state should have twice the public
infrastructure of what it really has. This tells us about the severe infrastructure deficit
there is despite the enormous expenses incurred to build it.

In this survey, Mexico City is the worst positioned and the numbers are scary. With
the money the city reports to have spent in the past 30 years in infrastructure,
inhabitants of Mexico City should have by now 631 hospitals, 4,049 medical
consultation units and 1,093 beds with 517 more consultation units that it really has.
In education, the deficit is of 27,645 basic education schools and 1,558 middle schools.
In housing it should have fully covered the demand for sewerage, water and electric
power in addition to 500% installed capacity of each one of the services. That is to
say, given the expenses incurred it should have 12,126,639 additional homes with
electric power, 11,931,638 homes with drinking water services and 11,968,201 homes
with more sewerage than it really has.

The numbers are cold facts, but the corruption is reflected not only in the expense and
the lack of infrastructure but it also has other consequences that end up hampering
the growth of our country, a tree with too many dead branches. In our sector,
corruption is the main inhibitor of foreign investment, it irreversibly damages the
environment, that succumbs to the ambition of a few, generates disloyal competition
amongst ourselves which is then evident in the quality of the works, restrains the
creation of jobs and delays and makes projects more expensive due to numerous
challenges. In 2007 there were 507 complaints filed in the country, of which 128 were
related to construction work and of those, around 30 had sufficient grounds, so
projects were delayed while the challenges were resolved. Unfortunately this defense
mechanism that construction companies have is often also misused by third parties
that file complaints based on the endless regulations that rule tenders, no matter how
small they are. There is a ranking within the sector where companies that usually
contest a tender appear each time that the results do not favor them. This sad list is
known as “the best 100 companies for contesting”. Last year alone, one of these
companies filed 41 complaints and only won 8 and another one used this recourse 13
times and only won one.

Construction companies need more security. Our businesses cannot be in the hands of
tens of public officers that have to supervise and approve each project before it is
developed. In too many cases, their low salaries, excessive power over operations of
several million pesos and the over-regulation that shelters them, end up generating
corruption that grows strongly in fertile ground. It is necessary to, once and for all,
simplify regulations and paperwork and promote better inter-institutional coordination.

The government must assess the quality of its services. Institutions and their officers
must pass the test. Without evaluation there will be no improvement. Bad weeds can
die and the Government has to uproot them by force. This way, our country will finally
flourish.