Costa Rica infra scandal presents an opportunity for more transparency – expert

A corruption scandal involving Costa Rica’s infrastructure authorities and key construction companies provides an opportunity to improve transparency, according to an expert.

“It really should be seen as an opportunity to improve,” Manuel González (pictured), senior regional manager for Latin America at The Infrastructure Transparency Initiative (CoST), told BNamericas. 

“It is a public shame, but also a wake-up call. We have to implement more transparency tools and access to information to prevent this from happening again in Costa Rica,” he said.

CoST is operating in nearly 20 countries, including Argentina, Ecuador, Colombia, Panama, Guatemala, Honduras, El Salvador, Mexico’s Jalisco state and Costa Rica. Regulators in some countries have even adopted the entity’s proposals. CoST has also influenced legislative proposals and helped identify monopolist practices. 

Yet, many obstacles prevent transparency progress in Costa Rica, according to González. 

One is related to the lack of a freedom-of-information law, despite years of efforts. 

“Institutions do not update the status of infrastructure projects. The country also has little knowledge in the public procurement market,” he said.

“In public works, the biggest challenge is to be able to connect all the systems that the country has. The country manages several systems in which it monitors works, it has public purchasing systems that are not yet connected, that do not communicate with the infrastructure project system,” according to González. 

To confront the recent scandal, the government should allocate more resources to prevention, the implementation of technology in public works, and sanction participants in the corruption scheme, González said. 

Cochinilla scheme

On June 14, Costa Rican authorities arrested 28 officials and businesspeople involved in an alleged corruption scheme known as “Cochinilla” in which highway contracts were supposedly awarded to select companies in exchange for bribes.

Judicial investigation authority OIJ also raided 57 homes and offices, including government facilities, as part of the investigation that started in 2019. 

Authorities estimate the scheme caused the loss of 78bn colones (US$125mn) to public coffers over the last three years.

Among the detained were officials from the public works ministry (MOPT), highway authority Conavi and public transport council CTP, but also the heads of local firms Constructora Meco, H. Solís, Cacisa and Constructora Herrera.

Against the attorney general’s recommendation, the judge in charge granted all suspects bail, saying it was unnecessary to jail them for up to a year. 

Mélida Solís, owner of H. Solís, had to pay US$3mn while Carlos Cerdas, owner of Meco, paid US$5mn.

But investigations continue and President Carlos Alvarado has promised his administration will cooperate with the inquiry. 

Transparency Index

In its Infrastructure Transparency Index (ITI), published on June 14, CoST highlighted Costa Rica, which received a score of 47.51 points out of 100. 

In the process and capacities section, the country received 37.7 points, 67.2 points in information disclosure and 37.7 points in citizen participation. 

“One of the most significant results in Costa Rica’s ITI implementation is the country’s weak regulatory environment regarding access to information. For instance, there is no formal disclosure requirement for procuring entities to disclose information,” the report said.