Model: Operations and Maintenance Contract
TransGambia bridge is an integrated O&M contract with tolling of the vehicles. The construction on the bridge will start by the end of 2014 and is expected to take three years. The design allows for the installation of toll stations. A study to investigate the feasibility and desirability of a toll-based O&M contract will be started up soon (the procedure to select a feasibility study consultant has been started up). Should this study confirm that a PPP is indeed the preferred option for the operation and maintenance of Trans-Gambia bride, a competitive procedure for the selection of a private operator can be launched in order to have an operator in place by the expected completion date of the bridge.
The construction the Trans-Gambia Bridge between Bambatenda and Yellintenda is planned to start by the end of 2014. The National Roads Authority (NRA) is in favour of outsourcing the maintenance of the bridge through an Operations and Maintenance (O&M) contract, funded by a user toll. The design of the bridge already provides for the installation of toll stations. Complementary infrastructure, in particular access roads and weighing bridges could also be included in the contract.
Based on international experience PPP in O&M has a proven ability to improve the durability of the infrastructure. The transfer of the operational and maintenance risk to the private partner sharpens the incentives to ensure that maintenance activities are diligently carried out and that overloaded vehicles (the prime cause of wear and tear of road infrastructure) are prevented from using the bridge. As a result the infrastructure is kept in good condition during its planned lifetime and does not suffer from premature deterioration.
No toll studies have yet been carried out to verify the financial viability of private O&M. However, a quick examination of the available information suggests that expected toll revenues will be more than sufficient to cover the maintenance cost of the bridge (see box). This means that a private O&M contract is financially viable and can even, if so desired, be extended to access roads and weighing bridges.
Quick estimate of toll revenues
The project memo of the African Development Fund on the Trans-Gambia corridor presents the following information:
- traffic volume: about 500 vehicles per day in 2011 and 3000 vehicles per day in 2046;
- share of trucks: 30%;
- annual maintenance costs of bridge: USD 112.000 (including routine maintenance). The current ferry rates per crossing are:
- light vehicle (cars): 150 dalasi
- truck (tractor-trailer combination of 40 tons with a length of 16,5m): 2.200 dalasi.
Assuming that the toll for use of the bridge equals current ferry tariffs, and given daily traffic levels in 2011 (counting with 300 working days in a year) the annual toll revenues would amount to 115 million dalasi or nearly USD 3 million. This amount exceeds by far the annual maintenance costs.
The next step is the assessment of the feasibility and desirability of an O&M concession for the Trans-Gambia bridge (with tolling). The NRA has already started the procedure to select a feasibility study consultant. The scope of work of the consultant consists of two components:
- a full feasibility study (technical, economic, financial, environmental) of the upgrading of the 24 km section of the Trans-Gambia Corridor which runs through the Gambia; and
- the development of an optimal institutional model for managing the toll bridge.
If studies show that an O&M concession is feasible and desirable, then the tender procedure for the selection of a private O&M operator must be started up soon in order to have an operator in place by the date the bridge is completed.