Outlines infrastructure challenges faces by the Pacific and how to make improvements
Inadequate infrastructure maintenance has long been recognised as a challenge. The failure to manage and maintain existing infrastructure assets in Pacific island countries has resulted in a large infrastructure debt – representing the gap between what has and should have been spent on infrastructure. The premature deterioration of infrastructure affects lives. It translates into fewer people having access to health clinics; fewer children going to school; deaths from vehicles colliding when negotiating pot holed roads; and disease resulting from the contamination of water sources because of blocked drains, untreated sewage, and the exposure of hazardous waste.
The lack of preventative maintenance is also costly in a financial sense. It is well known that preventative maintenance provides a better financial return than investment in new infrastructure. This is important given Pacific Region Infrastructure Facility (PRIF) partners alone will be spending an estimated USD1.7 billion investing in core economic infrastructure between 2008-09 and 2016-17.
World Bank estimates of the resources required for infrastructure maintenance range from an average of 2.5 per cent in middle income countries to 3.73 per cent of Gross Domestic Product (GDP) in low income countries. For Pacific island countries, we estimate an average of 3.1 per cent of GDP is required for the maintenance of existing infrastructure, equating to USD634 million per annum. Pacific island countries must also address the backlog of delayed maintenance and budget for the maintenance of planned infrastructure. Data on current maintenance spending are not available, but there is common agreement that maintenance is being avoided within the ‘build-neglect-rebuild’ paradigm.
The maintenance of infrastructure depends on the availability of resources, the capability of organizations managing infrastructure, and the incentives of staff. These factors determine whether Pacific island countries, in partnership with development partners, are able to deliver sustainable infrastructure services. There is no silver bullet to ensure all three factors are in place for good asset management. Rather, a range of initiative and reforms are required for the effective delivery of services. Careful planning of delivering service to local areas, urban and rural, and collaboration among service providers is also required if Pacific island countries are to meet the Millennium Development Goals (MDGs).
Financial resources are required for the ongoing management and maintenance of infrastructure assets. These are not always available. Resource constraints in Pacific island countries are especially evident in agencies dependent on allocation from government budgets. The Pacific is one of the most aid-dependent regions in the world, with many Pacific island governments reliant on development assistance for their operations. The resource constraint challenge is especially problematic where new infrastructure does not increase the productive capacity of the economy. There is often an implicit assumption in the design of infrastructure projects that core economic infrastructure will ‘pay for itself’ by generating economic growth. This assumption can be problematic in Pacific island countries, especially in microstates, which are remote and unable to take advantage of economies of scale.
Resource constraints on asset management can also result from institutional arrangements. A problem prevalent around the world is that governments, despite having adequate resources, fail to allocate necessary funding towards maintenance. Another common challenge is that user fees set by government or regulatory agencies are not high enough to cover service provision costs. The end result is poor service provision, as lack of maintenance leads to the premature deterioration of infrastructure. This can create a vicious circle, as customers are unwilling to pay more for a service that is sub-standard. As a result, agencies find it difficult to increase user fees or refuse to provide services to non-paying customers.
Organisational capability is also necessary for sound asset management and maintenance. Capacity constraints among infrastructure service providers that can result in inadequate maintenance include poor forward planning of maintenance; a limited long-term pool of trained maintenance staff with the technical capacity to maintain new and old infrastructure; and weak internal systems and processes that fail to ensure maintenance staff have the equipment and stores required to regularly maintain all infrastructure. Unclear roles and responsibilities, which lead to lack of accountability, are also problematic.
A common issue in the Pacific relates to the division of responsibilities among national and sub-national governments, and community organisations. Sub-national governments in larger Pacific island countries are responsible for service delivery, but are provided with insufficient funding by the national government. Much community infrastructure is provided by community organisations that have limited access to a pool of maintenance personnel.
Incentives are interlinked with many of the reasons for poor asset management already discussed. Managers must be motivated and provided with support to undertake asset management activities. Clear roles and responsibilities for which managers are accountable are important for establishing such incentives. Communities must also value infrastructure services for their provision to be a success. A common reason for the failure of service delivery in rural areas is that communities are not involved in the planning for and design of infrastructure services.
There are a number of steps that Pacific island governments, infrastructure service providers, and development partners can take to address the three barriers to sound infrastructure asset management. These are grouped into four categories:
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