Road Maintenance Area Concessions
Model: Operations and Maintenance Contract
Area concessions for the maintenance, and possibly rehabilitation, of roads, are a promising idea. However, the operational and financial feasibility of the concept must still be assessed. Moreover, it is wise to await the progress with the proposed O&M contract for the Trans-Gambia bridge before undertaking new PPP projects in the road sector.
The NRA supports the idea of area concessions for the maintenance, rehabilitation and expansion of the existing road network. Under an area concession contract a private contractor becomes responsible for the upkeep of the roads in a circumscribed area. The scope of the area concession can also include the rehabilitation of the roads and the construction of new roads within the area. The contractor will probably be remunerated by a performance-based availability fee paid by the NRA. The average density of the traffic on the road network is too low for tolling to be viable.
A Road Fund has been established, which could be used to fund the availability fee. However, at the moment the Road Fund has very limited resources. To provide adequate funds for the maintenance and expansion of the road network the Road Fund needs additional sources of revenues, for instance an increase of the petrol tax or a revenue surplus form the tolling of the Trans-Gambia Bridge.
As in the case of the Trans-Gambia bridge O&M concession, roads maintenance area concessions can improve maintenance practices, thereby contributing to more durable roads.
At this moment area concessions for road maintenance are only a promising concept. The technical and financial viability of the practical implementation of the concept are still to be investigated. A good moment to proceed with the further development of the concept is when the O&M concession of the Trans-Gambia Bridge has been implemented with success (or has been definitely discarded, but that would imply that the O&M concession is not feasible or not desirable, and in that case the same conclusion will probably also apply to area concessions).