Are Developing Countries Paying for Their Roads? – Matching Road Costs and Available Funds

Financing road network life-cycle costs on sustainable basis is one of the most crucial challenges facing many developing countries, as it requires a thorough awareness of road network costs and available sector funds. This paper presents a pragmatic cost-revenue model for estimating road network life-cycle costs and expected road revenues. Drawing on examples from Ghana and Namibia, the model calculates performance indicators for measuring the extent to which road users are contributing to the financing of road network life cycle costs. The findings indicate that road user contributions in Ghana are sufficient to cover only the expected maintenance costs and about three-quarters of the estimated network life cycle costs. User contributions cover only one-half of the total costs when the costs of clearing existing maintenance backlogs are included. By comparing user contributions and actual allocated domestic funds, the model shows that only about 50% of what users contribute is actually allocated to the road sector. This disparity between road network life cycle costs and available funds for road financing is a major development constraint, as needed road improvement projects cannot be undertaken due to lack of funds or under-allocation of available funds. With existing network conditions, it is estimated that 1.5-3.0% and 4.5-6.0% of GDP allocation would be required for annual maintenance and network life cycle costs respectively in both countries.

• Corporate Authors:

  World Road Association (PIARC)

  La Grande Arche, Paroi Nord, Niveau 5
  F-92055 La Defense Cedex,   France 
• Authors:
  • Amoatey, C
  • Weiler, F
  • Wagner, A
  • Thielmann, S
• Conference:
  • Choice for Sustainable Development. Pre-Proceedings of the 23rd PIARRC World Road Congress
  • Location: Paris , France
  • Date: 2007-9-17 to 2007-9-21
• Publication Date: 2007

Language

• English

Media Info

• Media Type: CD-ROM
• Features: References; Tables;
• Pagination: 17p
• Monograph Title: The Choice for Sustainable Development. Pre-Proceedings of the 23rd PIARC World Road Congress

Subject/Index Terms

• TRT Terms: Developing countries; Drivers; Financing; Life cycle costing; Sustainable development; User charges
• Uncontrolled Terms: Highway improvement projects; Maintenance costs; Road networks
• Subject Areas: Finance; Highways; Planning and Forecasting; I10: Economics and Administration;

Filing Info

• Accession Number: 01081042
• Record Type: Publication
• Files: TRIS
• Created Date: Nov 26 2007 9:54AM