WASHINGTON, May 9, 2016— The World Bank has approved a $125 million credit to help Sri Lanka establish its first public-private-partnership (PPP) to help better maintain the country’s roads, reduce long-term costs, and improve the performance of the Road Development Authority (RDA).
Moving away from the conventional way that civil works contracts have been done, this new approach is expected to bring significant benefits in terms of reducing costs by up to 25 percent, better use of public resources, and more predictability in government expenditures.
“This project will support to create a model that will help improve the quality and maintenance of Sri Lanka’s roads, and will reduce costs in terms of maintenance and vehicle wear,” said Francoise Clottes, World Bank Country Director for Sri Lanka and the Maldives. “We hope the project can be a model for the Road Development Authority to emulate across the country to maximize quality and minimize costs across Sri Lanka.”
Sri Lanka‘s dense road network makes it the most preferred mode of transportation carrying 95 percent of passenger traffic and 98 percent of freight. Building on the lessons learnt from previous World Bank supported Roads Sector Assistance Project (RSAP), the new Transport Connectivity and Asset Management Project will help strengthen the RDA by focusing on the institutional and system changes that are necessary to transform the authority from a provider of infrastructure to a service provider.
The project, which will be implemented on the section between Ja-Ela and Chilaw on National road A003, will directly benefit fisheries, agriculture, garments and tourism and others dependent on transport. The selected corridor along the A3 also includes an alternate access to the Bandaranaike International Airport and tourist destinations along the coastal belt up to Puttalam.
The upgrading, rehabilitation and routine maintenance on the corridor will be carried out by a private contractor under a long term contract that will allow them to Design- Build- Maintain – Operate and Transfer (DBMOT) the road section back to RDA at the end of the contract. Some of the risks are passed on to the contractor to bear.
“During the contract, the RDA will monitor the contractor based on providing road users properly maintained and safe roads free of pot holes, water logging, with well-maintained shoulders, drainage, lighting that is comfortable for the road users,” said Amali Rajapakse, World Bank Senior Infrastructure Specialist and Task Team Leader. “Over time, these interventions will help reduce vehicle operating costs and minimize cost and time overruns, quality issues, providing the RDA a model for best practices.”
The credit for this project is provided by the International Development Association (IDA), the World Bank’s grant and low interest arm, with a maturity of 25 years that includes a grace period of 5 years. The project also supports a program that is being financed with the Asian Development Bank. (ADB). The Road Development Authority is the lead responsible agency for the implementation of this project.