One road at a time

After the end of a devastating civil war, Sri Lanka embarked on a national program to upgrade the nation’s ailing infrastructure – a move that is now starting to pay off.

Lying off the southern tip of India, the tropical island of Sri Lanka is a tourist magnet with a dark past. Scarred by a long and bitter civil war arising out of ethnic tensions between the majority Sinhalese and the Tamil minority in the northeast, it is still recovering from more than 25 years of violence that only ended in May 2009, when government forces seized the last area controlled by rebels forces.

Driving the recovery has since been a large-scale infrastructure investment program that saw new roads, ports, airports and energy grids emerge in record time, in a move to reconnect the war-torn northern and eastern provinces with the rest of the country. Almost ten years on, the program is still going strong – and slowly starting to pay returns for the commercial road transport community.

But, it’s not been an easy task making up for a quarter of a century of devastation: Until today, more than half of all 10,500 Road Development Authority (RDA) staff are solely dedicated to maintaining and expanding national roads and highways, trying to provide the 80 per cent of the national population who reside in rural areas with more opportunities to participate in economic growth.

In the eight years between 2005 and 2013 – the last period for which official data is available – the RDA thereby rehabilitated about 4,500km of national roads and constructed 60km of new expressways, spending some US$5.5 billion (€4.5 billion). The Government and World Bank both believe that this has increased the number of roads classified as being in “good and fair condition” from 48 to 65 per cent, building a “solid” foundation for the growth of the nation’s trailer manufacturing industry, helmed by Colombo-based OEM, Dutch Lanka Trailers, and local rival, Tantri.

However, experts also say that the limited capacity of both private contractors and of road agencies to plan and execute large-scale projects, as well as the limited availability of suitable raw materials, has kept this ratio from rising even more. Limited financial and technical controls, as well as inadequate systems for monitoring and evaluation, are also suspected to have slowed down progress. Even worse, the resulting low quality of already completed construction work might cause an increase in transportation costs down the track, as roads are expecting to deteriorate more quickly.

With a new, US$125 million (€102 million) fund, the World Bank is now aiming to offset these structural shortcomings by implementing a new “life cycle approach” to asset management. While announcing the program in late September of 2017, it said that it was hoping to help Sri Lanka move from a traditional approach to road infrastructure and maintenance, which pays the contractor based on progress, to a new system based on contractor performance. “This approach will create incentives for better quality and timely interventions, which will provide the public with better maintained roads at a lower cost to the government,” the organisation explained.

That’s good news for the local trucking industry, which has benefitted significantly from the nation’s infrastructure push since the end of the war, as Christina Hallin, Managing Director of Volvo Trucks India, confirms. “Road quality in Sri Lanka has improved greatly over the last decade, enabling the transport industry to develop further,” she says, albeit indicating the industry is only just starting to mature.

According to Hallin, Volvo in Sri Lanka is “increasingly seeing” that haulage operators are wanting to modernise their fleets. “The market has been dominated by truck brands from South Asia and two-axle trailers, [but over] the last two years, registrations of second-hand European brands have accelerated,” she says. “Overall, the truck and trailer population is still rather old and we see frequent breakdowns, particularly with operators handling heavy loads. This contributes to congestion and jeopardizes traffic safety.”

As the Sri Lankan economy grows and infrastructure investments continue, Hallin and her team at Volvo thus believe that there will be an increased demand for “high quality, durable and fuel efficient premium” trucks and trailers – permitted that the World Bank’s new road-asset management program will be successfully implemented.

A previous US$352 million (€287 million) road improvement project only just got a pass from the lender’s Independent Evaluation Group (IEG). The IEG’s report found “the articulation of the project…objective” to be too broad and overambitious, for example. While the project was supposed to reduce transportation costs across all of Sri Lanka, the 755km of roads it managed rehabilitate represent only about six per cent of the country’s 12,000km road network – prompting the IEG to conclude that there was “no adequate mechanism” to say whether or not it was successful.

There were also significant cost and time overruns associated with the project, mostly due to external factors such as shortage of bitumen, which in turn increased road construction prices, and the unprecedented increase in the world price of oil, which affected the price of bitumen for a period of time.

However, the IEG still acknowledged some positive outcomes: The average “network vehicle operating cost” – the cost per vehicle to maintain the road – dropped from 23.9 Sri Lanka rupees (€0.126) per kilometre at the baseline to 13.88 rupees (€0.07) per kilometre at the project’s closure. This exceeded the original target of 22.9 rupees (€0.12) per kilometre dramatically.

What’s more, the percentage of the road network that was reported to be in a “poor” condition declined from 52 per cent at the baseline to 40 per cent at the project’s closure – indicating that Sri Lanka’s ongoing effort to provide the commercial road transport community with a functioning, reliable road network that will allow for the use of more sophisticated equipment may still pay off after all.

Fast Fact

Sri Lanka is a lower-middle-income country with a fast-growing population of more than 21 million. The country is shifting to an urban economy from a rural-based one, with a new orientation to manufacturing and services. Services already account for more than 57 per cent of the economy and manufacturing for 33 per cent, with agriculture dropping to 11 per cent. Growth rates averaged 6.07 per cent between 2003 and 2016 – reflecting a peace dividend connected to the aggressive push towards growth since the civil war ended in 2009.

Fast Fact

Sri Lanka’s road network is extremely dense, carrying 95 per cent of all passenger traffic and 98 per cent of all freight. National roads and the expressway network consist of 12,164km and 160km, respectively. They are owned and managed by the Road Development Authority (RDA) under the Ministry of Highways, Ports and Shipping. The 15,530km provincial roads network are owned and managed by the nine provincial councils. Rural roads (approx. 88,200km) are managed by 335 local authorities.