Maintaining Momentum: Three Steps Countries Can Take to Make Infrastructure More Resilient

Infrastructure plays a pivotal role in national development. Maintenance is needed for the prosperity of future generations. Photo: ADB
Infrastructure plays a pivotal role in national development. Maintenance is needed for the prosperity of future generations. Photo: ADB

By Anshuman Bardhan

Operations and maintenance costs are often left out of the equation when building infrastructure. These steps will help countries manage these expenses.

Public infrastructure serves as the backbone of any nation’s social and economic growth.  Investments in sustainable public infrastructure can propel countries towards achieving the Sustainable Development Goals and improve the lives of their people.

Asia will need to invest $ 1.7 trillion per year in infrastructure from 2016 to 2030 to maintain its growth momentum, eradicate poverty and respond to climate change. India, being the fifth largest economy in the world and home to one-sixth of the world population, faces a substantial backlog in public infrastructure. India must significantly increase infrastructure investment to bridge this gap.

Infrastructure investments at state government level in India saw an unprecedented 32% increase in 2021–2022 and a 38% rise in 2022–2023, according to the Reserve Bank of India’s State Finances report. In 2021-2022 as the fiscal position of the state governments improved, they were able to push infrastructure expenditure with support from the central government.

However, India continues to grapple with the challenge of optimally maintaining its infrastructure. The Parliamentary Standing Committee on Transport, Tourism and Culture report issued in 2023 noted a pattern of under-allocation on maintenance of national highways as compared to the demand by Ministry of Road Transport and Highways. The Supreme Audit institution of India in 2022 had highlighted the need to spend more funds on maintenance of railway tracks.

India is not the only country with this infrastructure operation and maintenance problem. World Bank in 2021 estimated that direct costs in low- and middle-income countries due to power outages amount to $82 billion a year; from disruptions to the water supply infrastructure to $6 billion a year; and disrupted transport networks in losses of $107 billion a year. These estimates exclude indirect costs of these disruptions, such as coping with inconveniences, loss of competitiveness, and capacity to attract investments.

When planning infrastructure projects to meet the demand, governments need to ensure that they have enough funds for not merely building, but also operating and maintaining the assets. If future revenues are not expected to cover operating and maintenance costs, it is important to identify additional funding sources to fully realize the expected economic benefits of these investments or to reconsider the investments and avoid poorly maintained and operated public assets.

Take for example, a government agency responsible for public access roads. If the agency plans to build new roads, it must have enough funds to not only build the new roads but also to operate and maintain the entire network of roads it oversees in optimum condition. If future budget allocations cannot cover these costs, the agency might need to rethink the project or seek additional funding. 

 

 

 As a nation ramps up its infrastructure investment it is crucial to ensure the infrastructure is sustainable. This can be done with the following steps:

Integrate operations and maintenance into the investment decision. When planning new infrastructure, it is vital to look at the funding needed for the construction of the new assets and the optimal operation and maintenance of the entire network managed by the agency including the new infrastructure. If projected government grants and revenues can’t cover additional maintenance costs for the useful economic life of those assets, alternative funding sources must be identified to ensure the infrastructure investment will yield the expected economic results.

Linking budget demands with maintenance needs. Utilizing life cycle costing and implementing a medium-term expenditure framework can assist governments in strategically planning and managing their expenditures on public infrastructure. These tools enable governments to prioritize investments, allocate funds more effectively, and tackle any financing shortfalls. Life cycle costing estimates the total cost of owning and operating an asset over its life span. Highways England, United Kingdom uses the life cycle costing approach for road maintenance, which helps allocate funds more efficiently. Medium-term expenditure framework projects the available resources and expenditures for the next three to five years, based on the government’s fiscal policy and macroeconomic outlook.

Leveraging digital technology for citizen engagement. The public, being the main beneficiary, has a significant stake in optimal infrastructure maintenance.  Fostering public demand for preservation of assets by leveraging digital technology could be a major driver in prioritizing operations and maintenance expenditure. Fix My Street is a United Kingdom based platform that enables citizens to report infrastructure issues in their local communities, helping authorities to fix them and analyze historical trends. This approach underscores the significance of infrastructure maintenance promoting it from a routine task to a key policy issue in the eyes of policy makers.

Sustained maintenance funding is a crucial aspect of infrastructure investment that should not be overlooked or underestimated.