BOX 2.16 THE AGETIP MODEL, WORKING WELL
Under the Agences d'Execution des Travaux d'lnteret Public
(AGETIP) model of contract managementfirst used in a Bank-sponsored
project in Senegal-subprojects on large public works are carried out by small,
dynamic firms in the private sector, rather than by (largely) inefficient public
agencies. An added benefit is liberating project managers from much red tape.
AGETIP is a private, not-for-profit company that does general
contracting for municipalities, ministries, and other public entities. It hires
consultants to prepare designs and bidding documents and supervise works. It
issues calls for bids, evaluates them, and signs the contracts. It also
evaluates a project's progress, promptly pays contractors, and oversees the
final reception of the works, adhering throughout to a set manual of procedures.
In its first year of operation in Senegal, AGETIP executed $8 million of works
through 119 subprojects, used 78 (mainly small or medium-size) contractors, and
created almost 2,000 person-years of employment.
AGETIP owes its success first and foremost to its efficient
private sector management team. This team takes pride in paying contractors in
ten days rather than the 30 allowed or the months taken by 'public entities.
AGETIP is also able to hold its overhead low by contracting for engineering
consultants and others only as needed. Moreover, its legal status as a private
company exempts it from the many and cumbersome bureaucratic procedures imposed
on the public sector.
Because AGETIP hires local contractors, it has stimulated the
development of local consulting industries. On its roster are 680 local
contractors and 160 local consultants. Its success has spurred other agencies to
improve their performance. In the public sector, the Senegalese minister of
public works is considering setting up an AGETIP within his ministry, and the
mayor of Dakar has contracted with AGETIP to execute projects financed from his
AGETIP's success in Senegal has led to the creation of similar
agencies under World Bank projects in ten countries, including Benin, Burkina
Faso, Mali, Niger, and Mauritania. The Mauritanian project proposes to
disseminate information to local communities in order to increase their sense of
responsibility toward project works and improve communication between the
grassroots and local authorities. Before projects are presented for funding,
affected communities will be consulted, particularly when projects concern such
issues as garbage collection or sewer cleaning, where grassroots participation
can make a large difference.
As documented extensively in the World Bank's World Development
Report 1994, low-income countries have improved the coverage of their
infrastructure. But they are slipping behind middle-income countries and need to
do much moreand quicklyif their firms are to compete in
international markets (table 2.3). Unmet infrastructure needs are still
considerable. Electric power has yet to reach most people. Demand for
telecommunications to modernize production and integrate into global markets is
far outstripping supply. And in rural areas, transport, water, sanitation, and
education facilities are still poor-specially for women and children. Often past
investments in infrastructure have not had the expected development impact
because of inefficient and inappropriate investments by the public sector.
Surveys of private firms consistently highlight infrastructure as a critical
constraint to investment and profitabilityand as an important variable in
the investment decisions of foreign firms.
In Africa, the poor state of infrastructure continues to retard
growth of the private sector and impose high transaction costs.
Telecommunications coverage in Sub-Saharan Africa is among the lowest in the
worldaveraging 0.4 lines per 100 inhabitants compared with 4 in Asia and 6
in Latin America. And government-owned telephone companies lack the resources to
deliver the massive increases in telephone lines needed to accelerate growth and
expand exports. Besides capacity constraints, poor service reliability imposes a
burden on firms and results in lost opportunities. In Kenya, it has been
estimated that unreliable telephone and telex services reduce foreign exchange
earnings by 1-2 percent.
Performance in the power sector is also mixed. Some
countriessuch as Ghana, Malawi, and Togohave managed to rapidly
increase output. But otherssuch as Tanzania and Guineahave had their
power output stagnate.