The cost of a work in Mexico increases by up to 10% due to corruption

According to the document, the most common forms of corruption are fees of about 20,000 pesos ($ 1,049), the request for an apartment, the obligation to hire a specific contractor, or even work in public buildings.

Photo: Pixabay
Photo: Pixabay

Real estate developers spend between 5% and 10% more for the bribes they give to the authorities in Mexico City, the NGO Mexicanos Contra la Corrupción y Impunidad (MCCI) reported Tuesday.

"Derived from the investigations, we conclude that the cost of a work can increase between 5% and 10% for acts of corruption," the researcher from MCCI Eugenia Castañeda told Efe after presenting the "Diagnosis on corruption in the real estate sector."

For the director of Business Integrity of MCCI, the most prone to corruption process is the demonstration of construction, the last agreement to be made by the real estate companies before putting the first stone.

The report was prepared with interviews, online surveys and workshops at the end of 2017 and beginning of 2018 at 45 medium and large estate real estate companies operating in the Mexican capital.

Although the results were extracted in the capital, these companies also have interests in a good part of the country, so the results could be similar in other parts of Mexico, the expert said.

In addition to city halls, other authorities related to bribes would be the Secretariat of Urban Development and Housing of Mexico City, the Administrative Verification Institute or the Water Authority.

According to the document, the "most common" forms of corruption are the fees of about 20,000 pesos (1,049 dollars), the request for an apartment, the obligation to give work to a specific contractor, or even to carry out works in public buildings.

The bribes also include personal gifts such as a food trailer, tickets for Formula 1 for officials, demolish homes affected by the September 2017 earthquake or fix parks.

Of the respondents, 94% said they had been victims of extortion or corruption, but only 36% reported, in part because 42% do not trust the authorities.

After the elaboration of this diagnosis, which for the researcher is "a first effort" to make a map of real estate corruption, the NGO made a series of recommendations for companies and authorities.

In the first place, it considered that the application of mitigation fees paid by developers to reduce the environmental and hydraulic impact of their works should be made transparent and improved.

"Many times we end up with traffic chaos or water shortages as a result of developments, and that is because the fees paid are not applied in the demarcations, but they enter a black box of the Ministry of Finance, and this makes it difficult to trace", he added.

In second instance, the NGO urged to modernize and simplify the regulatory framework, as well as delegate certain procedures to specialized third parties and with technical knowledge.

Finally, it proposed "collective" actions and "self-regulation" to be carried out by real estate developers, in order to avoid acts of corruption.

According to the Mexican Chamber of the Construction Industry (CMIC), construction contributes about 9% of Mexico's gross domestic product (GDP), generating six million direct jobs and 2.8 million indirect jobs.