Commercializing management and financing of roads in developing and transition countries

The road sector reforms undertaken by a growing number of developing and transition countries during the past 10-20 years are described. The problems these countries share with industrialized countries and the additional factors that also affect them--large backlogs of deferred maintenance, an acute shortage of funds and dysfunctional road agencies--are also described. The paper then describes how these countries have restructured road management by separating planning and management of roads from implementation of works, provided road agencies with more autonomy, created more effective oversight, introduced annual performance agreements and turned the road agency into a more commercial organization paying market-based wages. In relation to road financing, road tolls and toll roads are touched on briefly before the new style road funds that have recently been set up in these countries are detailed. The paper then describes how they were established and their basic operating modalities--revenues only from charges related to road use (with one notable exception), no abstraction of revenues from other sectors, proactive management and oversight provided by a board of directors that includes members nominated by road users and the business community.