Role of private sector in roads’ maintenance
In Nigeria, roads are the epitome of public finance and often used by public officials, especially the governors, to demonstrate achievements. We are often inundated with public announcements indicating how many kilometres of roads have been built since they assumed office.
In a political climate like Nigeria, it is understandable to link road construction with achievements – roads facilitate intra-country trade, aiding movement of goods and services and allowing for higher productivity that leads to further economic growth.
Road construction is also critical in an unexpected way – according to Transparency International, contracts for public works/construction has the highest propensity for corruption through bribery on bidding and super inflated costs of such construction.
So, apart from the fact that road costs are often very high, not usually financed by development aid, costs skyrocket even more when corruption and political instability are present according to the World Bank. Particular attention then needs to be paid, not just to roads construction, but also to roads maintenance as they take a good chunk of public finance in a country like Nigeria with a poor corruption index.
Usually, costs are high because of many factors, one of which is the different terrain. For example, roads in certain parts of the country would cost more than in other parts because of the soil conditions. However, other negative factors increase the cost further.
Involving private sector in roads maintenance has gained traction since the 2000s when low and high income countries started to implement what is known as the Performance Based Maintenance Contracting (PBMC), outsourcing road maintenance to private firms with clear performance indicators, using long term contracts for specific sectors of roads, and often with negotiated price upfront.
The advantages include the cost savings for as much as 30 percent for government, sharing of risks by government and the contractors, reducing the need for highly specialised people on permanent government payroll while allowing better specialisation and skills of the private/local construction companies, contributing to the growth of that sector.
As the contracts are often performance based, governments would only pay based on how targets set are met. PBMC often focus on routine maintenance including fixing of potholes, guardrail maintenance, lights maintenance and litter pick up on highways, urban roads, bridges etc.
The contracts would exclude major repairs like bridge repair. To have a successful PBMC in place, there must be enough skilled personnel available to the contractor to undertake successful maintenance on a long term, while saving costs, as well as advance financing since governments will only pay after specific performance indicators set have been met.
Even with the advantages to government and growth of the construction sector, this is still a difficult process to implement. Corruption and high cost necessary to start affect bidding, discouraging competition and participation. Even when successful, local construction companies have to grapple with the highly specialised skills and equipment necessary for ongoing maintenance of roads and could be thwarted by staff of government public works agencies who risk losing their jobs – except when an arrangement is made for government skilled workers to be taken over by the contractors.
In making PBMC work, political patronage and corruption have to be eradicated. Technical schools and engineering colleges must be restructured to ensure relevant engineering skillsand government has to make certain waivers on importation of equipment. Government must also be willing to let go of some control, and provide flexibility to contractors to determine an optimized mix of technical solutions and execution schedule without any interference from key stakeholders.
CHUKA UROKO