Road Infrastructure

1

• Road Infrastructure
• Options for Improved Funding and Maintenance in
  Africa
• Bernard Obika PhD

2
Contents

• Current Condition of Africas Roads
• Projected Growth
• Funding Requirements
• Current Expenditure
• Future requirements
• Sources of Funding
• Fuel Levies
• Other
• Improving Efficiency
• Output and Performance Based
• Area Wide Maintenance
• Privatised Network
• Service Delivery
• Summary

3
STUDY OBJECTIVES

• Preliminary results for analysis of existing
  arrangements and policy options for Road
  Maintenance in Africa
• Study Objectives
• a) Identify the maintenance gap that may result
  under a scaled up Investment scenario and
  identify strategies for addressing the gap in the
  short, medium and long term
• b) Examine the appropriateness of prevailing
  institutional, funding and operational
  arrangements to the particular needs of Africa
  and suggest modifications where appropriate
• c) Consider existing as well as new and
  innovative strategies taking account the need for
  enhanced private sector participation in
  maintenance funding as well as execution

4
STUDY OBJECTIVES

• d) Explore new approaches including long term
  performance based maintenance and build and
  maintain contracts
• e) examine government expenditure on maintenance
  and examine prospects for an increase in
  government financing through general budget
  support and sector budget support instruments

5
Macro Economic Context

• Growth
• Average GDP - 5.3 per annum
• All Africa 2008 GDP - 5.6 per annum
• SSA - 5.8 per annum
• For this study 5 from 2010 to 2030
• Fiscal deficit of 3.5 of GDP (non-oil producing
  countries)

6
Macro- Economic context Population Growth and
Urbanisation
7
Network Size Conditions

• Size 2.3m km (21 paved) SSA 1.9m km
  (14 paved)
• Condition

8
Paved Road Networks
9
Assessing Future Needs

• Alternative models Include
• Asset Preservation (Howe, 2005)
• Accessibility (Ongoing AICD Study)
• Others
• Economic Models
• Fay, M. and Yepes, T. World Bank

10
International Comparison of Paved Road Density
and GDP per Capita
11
Network Expansion Requirements
12
Network Expansion Requirements (cont.)
13
Network Expansion Requirements (cont.)
14
Network Expansion Requirements (cont.)
15
Unit Costs
Unit Annual Average Maintenance Costs (US per
km)
16
Current Expenditure

• ARMFA Countries US 1,100 per Km
• IRF Countries US 1,200 per Km
• RSA US 6,900 per Km

17
Forecast Requirements

• All Africa
• US 2,400 per km Routine Maintenance
• US 9,800 per km Periodic Maintenance
• US 12,200 per km Routine Periodic
  Maintenance
• Rehabilitation of 375,000 km by 2020
• Construction of 725,000 km by 2030
• 422,000 paved
• 305,000 unpaved
• Routine and Periodic maintenance from 2.3m km in
  2006 to 2.6m km

18
Summary Network Rehabilitation and Expansion
Requirements

• The total costs of the construction and
  rehabilitation programme are approximately US
  250bn over the period 2006 to 2030, and will
  initially consume approximately 0.75 of
  continental GDP, falling to 0.35 in the decade
  2020, as GDP increases and the backlog of
  rehabilitation is cleared.

19
Expenditure Requirements

• Maintenance expenditure substantially higher than
  that for construction and rehabilitation.
• US 29bn p.a in 2006 2010 to US 37bn p.a in
  2020-2030
• 3.2 of all Africa GDP
• 3.9 of SSA GDP
• Heggie (2004) IRF world road statistics
• Industrial countries 1 on roads
• (varying from 0.53 in Belgium to 1.6 in
  Portugal)
• Industrial countries with road funds spend 1.6
  GDP
• (vary from 1.2 in USA to 2.5 in Japan)

20
Source of Funds

• Types/Mechanisms
• Fuel Levy
• Road Tax
• Insurance Fees
• Toll Fees
• Road Licences
• Carbon Tax
• Others
• User pays principle is important
• Service delivery is important

21
Fuel Levy Requirements by Country (cent per litre
increase)
22
Road Standard, Maintenance Arrangements and Cost
Recovery
23
Improving Maintenance Efficiency

• Funding
• Planning
• Implementation
• Regulation Policy
• Public Demand
• Funding
• Management
• Accountability

24
Areas of Attention

• Performance Based Maintenance
• Area Wide Contracts
• Privatised Networks
• Enhancing Management Capacity
• Corridor Concessions
• Public Awareness Advocacy
• Community Participation

25
Progress With Output and Performance Based
Contracts
26
SUMMARY

• Africas growing economy will require maintenance
  and expansion of the road network without which
  it will stagnate.
• A large funding gap will result.
• Improving efficiency through new and emerging
  arrangements, private sector participation and
  enhanced cost recovery will assist in bridging
  the gap but
• Innovation and detailed analysis of promising
  options is required.

27
Thank you