What does the average road sector look like?
- Road densities vary from a low of around 0.01 km per sq. km to a high of 4.90 km per sq. km (excluding exceptions), with a typical value of 0.20 km per sq. km.
- The proportion of the main road network that is paved varies from a low of around 2.5 percent to a high of 100 percent, with a typical value of 45.5 percent.
- The number of 4 plus wheel vehicles per 1,000 inhabitants varies from a low of around 0.20 to a high of 933.1, with a mid value of 45.8. At the lower end, about 50 percent of the vehicles are cars, while at the higher end over 90 percent are cars.
- The number of 4 plus wheel vehicles per km of road varies from a low of around 0.3 per km to a high of over 200, with a mid value of 13.0.
- Worldwide the stock of motor vehicles is growing at nearly 3 percent per year. The number of vehicle km traveled tends to grow somewhat faster than the stock of motor vehicles.
- Industrialized countries typically spend just over 1.0 percent of GDP on the road sector. Those with road funds typically spend over 1.5 percent of GDP.
- The largest industrialized economies typically spend about 0.4 percent of GDP on road maintenance and over 1.3 percent on new construction.
- Developing and transition countries typically spend about 0.75 percent of GDP on road maintenance, varying from an average of 0.78 percent in Africa, 0.49 percent in Latin America, 0.67 percent in Asia and 0.84 percent in Eastern Europe.
- Worldwide between 750,000 and 880,000 people are killed and between 23-34 million are injured in road crashes each year, costing the global economy about $500 billion per year.
- About 85 percent of these road accidents take place in developing and transition countries, with almost half of all estimated deaths occurring in the Asia-Pacific region.
- In industrialized countries, only about 15-20 percent of fatalities involve pedestrians, non-motorized vehicles and motorcycles. In developing and transition countries, the figure is closer to 50 percent and is as high as 70 percent in Asia.
- In developing and transition countries, road accident rates per 10,000 vehicles tend to be 10 to 20 times higher than in industrialized countries and cost between 1.0-1.5 percent of GNP.
What are the general trends in the road sector?
- Most national road agencies are still managed through a government department, although an increasing number are being restructured along commercial lines. They have been given more autonomy and some have been turned into not-for-profit joint stock companies, or have been incorporated under the Companies Act with their shares held in trust by the Minister.
- Steps are being taken to strengthen local government road agencies to ensure that all roads are brought under regular maintenance. The idea of setting up a central agency to manage these roads on behalf of local governments, is increasingly giving way to de-centralized solutions, involving contracting out planning and management to firms of consultants, or combining local government road agencies into larger operating units to acquire greater scale (e.g., joint services committees).
- Roads carrying high volumes of traffic (generally over 10,000 to 15,000 vpd) are increasingly being tolled to generate additional revenues. Some are operated as free-standing toll roads, while others are operated as an integrated toll road network with high volume roads cross-subsidizing the lower volume ones. These roads may be managed by the national road agency, a public toll road authority, by a private concessionaire, or may be owned and managed by a private concessionaire.
- Tolled roads rarely account for more than 1-2 percent of the overall road network in a country, but may account for up to 20 percent of the national road network.
- Scarcity of government tax revenues is encouraging countries to seek alternative road financing mechanisms. Although toll roads generate some extra revenues, particularly on the national road network, they cannot meet the needs of the entire road network. A number of countries have therefore decided to put their roads on a fee-for-service basis. Under this arrangement, road users pay for any extra spending on roads (generally by way of a surcharge added to the price of fuel) and the proceeds from the surcharge are managed through an independent road fund administration under a board of directors made up primarily of road users and representatives of the business community.
- Planning and management of roads is increasingly being separated from the implementation of road works, either by contracting out all design and civil works to the private sector, or by moving them into two separate organizations that deal with each other under a formal contractual agreement.
- More attention is being paid to the views of road users, either through surveys, regular consultations with them, or by establishing a public-private oversight board. Such boards may advise the Minister on management of the road network, or may manage it in a non-executive capacity (usually the national network only).
- More attention is being paid to road accidents. In the case of road accidents, the trend is to establish a national coordinating agency (i.e., a directorate within a ministry), or a national road safety council supported by an effective secretariat. Efforts are also underway to mobilize private finance for road safety interventions and to set up accident reporting systems to enable road safety interventions to be planned and implemented more effectively.
- There is continuing concern about the adverse environmental impacts of roads and road traffic. Environmental impact analysis is now obligatory for all projects with potentially significant adverse impacts (including resettlement) and the process is usually tied in to some form of public consultation.
- Efforts are underway in many countries to make better use of road building materials. Recent innovations include use of foamed bitumen and extensive use of recycled road surfacing materials.
- There is growing concern about the safe disposal of end-of-life vehicles. Within the EU, regulations are now in place that require almost total recycling of such vehicles. The recycling process includes residual fuel, oil and, coolant, as well as batteries and tires. Bodies are shredded and both ferrous and non-ferrous metals are recycled.
- There is a gradual move away from maintenance contracts based on procedural specifications towards use of performance (or end product) specifications. At the same time, different types of maintenance (e.g., routine and periodic) are being combined into one contract, which may apply to several roads (e.g., they may be area contracts covering a discrete part of the road network) and the contract may be let for an extended period of time (often 5-10 years). Such contractual arrangements have led to significant reductions in cost, combined with improved quality.
- Road agencies are becoming more business like and are employing better management systems and procedures (road management systems, equipment management systems, etc.) and are improving their financial management and cost accounting systems (among other things, by explicitly accounting for capital items, rather than writing them off as a cash expense as soon as they are incurred).
- There is growing interest in Total Quality Management (TQM) and the standards that have been developed by the International Standards Organization (the ISO 9000 family of standards). TQM seeks to place responsibility for quality assurance with the designers and implementers of works. This requires these persons to develop their own quality assurance procedures that are then certified by an independent third party. Implementation of the procedures is monitored by the client (the road agency) and supervising consultant. Partnering offers a slightly different approach to TQM and is more concerned with the quality of design and implementation, particularly when projects are expected to have adverse impacts on third parties.
Outstanding issues requiring further attention.
- A number of road agencies still lack the capacity to plan and manage their road network effectively. The ideal is to create a small, white-collar agency, paying market-based wages and operating at arms-length from government. The reality is that few countries have managed to do this. Strong vested interests has stalled the reform process. Resistance typically comes from older members of staff, who have either set up parallel income streams to compensate for low salaries, or are delaying the reforms until after they have retired. Younger staff are more supportive of reform and one of the urgent challenges in the road sector is to find ways to give these younger staff more say in how the road agency is managed
- Many of the toll roads and maintenance concessions with tolls, are in serious financial difficulty. This seems to be largely due to unrealistic expectations on behalf of government regarding which costs can be reasonably financed through tolls when traffic volumes are below 15,000 vpd. The public-private partnerships, where government clearly accepts that some costs will have to be borne by government, appear to be working better.
- Some countries have a clear strategy and policy towards toll roads. They aim to develop a network of toll roads, revenues are partly or completely pooled to permit cross-subsidization, and toll levels are set to maximize revenues. The private sector participates in these networks within the framework set by government. Other countries do not have such a clear strategy and nor do they have a policy on toll levels. As a result, they are ending up with a fragmented toll road network, only covering roads with high volumes of traffic and with wide variations in toll levels.
- There is concern that long term, area wide maintenance concessions will lead to consolidation of the road construction industry. Small contractors may be put out of business and the industry may consolidate into a small number of large road operating companies. This may reduce competition and, in the long term, this could lead to an increase in costs.
- It is still unclear how the independent road fund administrations will evolve. A small number have been set up in the form of a public enterprise (i.e., the board has power to set its own road tariff subject only to a Ministerial "no objection"). However, this is a very new development and it is not clear how well it will work in practice.
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