DFID’s transport and urban infrastructure investments

Good performance on strategic approach and supporting multilateral finance, but a mixed record in the delivery of bilateral programmes

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Published
12 Oct 2018
Assessment
Green - Amber
Lead commissioner
Tina Fahm
Subjects
Economic development, Multisector, Sustainability and climate change

Transport and urban infrastructure are key ingredients for economic growth and poverty reduction. Rural roads and bridges give poor people access to vital public services and markets to sell their goods, while highways, railways and ports link economically deprived areas to national and regional trading opportunities and can help reduce the prices of goods for consumers. Cities in developing countries will gain almost two billion new residents in the next two decades, putting urban infrastructure – including public transport, waste management and energy supply – under enormous strain. Growing cities can be engines of economic growth, but without well-planned infrastructure they can generate poverty and deprivation.

Experts agree that investment in transport and urban infrastructure in developing countries falls well below the level required to support economic growth and achieve the Sustainable Development Goals.

This review examines DFID’s investments on transport and urban infrastructure, which over 2015 and 2016 consisted of 57 programmes with combined budgets of £3.9 billion.

Scope and methodology

This review looks at the coherence of DFID’s overall approach to its transport and urban infrastructure work. It assesses the effectiveness of DFID’s support for transport and urban infrastructure development in partner countries, and how well it uses bilateral programmes to enhance the effectiveness and value for money of other sources of infrastructure finance.

We chose a sample of 13 projects – a third of DFID’s transport and urban infrastructure portfolio by value – for detailed review. The sample includes programmes that invest directly in infrastructure, provide support for policy and institutional development, research programmes and initiatives that help mobilise other sources of infrastructure finance. We also visited three countries to interview stakeholders: Uganda, Kenya and Pakistan.

Findings

  • DFID’s transport and urban infrastructure work clearly supports three out of four strategic objectives in the UK aid strategy: promoting global prosperity, strengthening resilience and response to crisis, and tackling extreme poverty and helping the world’s most vulnerable.
  • DFID has identified its comparative advantage alongside other development actors but its strategy needs further articulation, including how its infrastructure work fits alongside other UK aid spending departments’ activities.
  • While some of DFID’s transport and urban infrastructure work has a pro-poor focus, its larger economic growth-focused programmes lack a systematic approach to including the poorest and most vulnerable groups.
  • Programme performance has been mixed, with some strong results offset by frequent delays.
  • DFID’s research and technical assistance has been very effective, in influencing both host country and multilateral programmes.
  • DFID relies on the safeguarding policies of its multilateral partners, but is not active enough in ensuring that these are effectively implemented.
  • DFID is increasing its engagement with China on infrastructure issues, but could do more to help partner countries make informed infrastructure finance choices.

Recommendations

  • DFID should have a more rigorous approach to project selection, a stronger focus on identifying and addressing governance and market failures, more realistic timetables, stronger programme supervision and risk management processes and a more systematic approach to supporting the poorest and most marginalised.
  • DFID should ensure multilateral partners have adequate safeguarding systems and the capacity to implement these at country level.
  • To improve its ability to manage complex transport and urban infrastructure programmes, DFID should make more use of staff from regional departments and centrally managed programmes to supplement capacity in country offices.
  • DFID should clarify how it will work with China and other new donors on infrastructure finance.

Government response

The government publishes a response to all ICAI reviews. The government response is available to read online.

International Development Committee

There will be an International Development Committee hearing into this review in due course.