Building Trade Corridors Is Only the Beginning
Professor Gustavo H R Pessoa is an economist and professor at Fundação Getulio Vargas in São Paulo, Brazil
For a small exporter, an unreliable road can create a financing problem before it becomes a transport bill. A delivery held up by repairs may delay payment, while wages and the next supplier invoice still fall due. The return on a trade corridor therefore depends partly on how reliably it performs after construction. Its maintenance arrangements deserve close attention when the investment is approved.
The Asian Development Bank’s August 2025 brief on sustainable road maintenance funding, drawing on more than 60 completion reports for ADB-financed road projects, examines ways to sustain roads beyond construction. It covers asset management, user charges, dedicated road funds and performance-based maintenance. These instruments address a common question: who will keep paying for the service the investment is supposed to provide?
The answer belongs in the original appraisal. A construction loan brings money forward while committing future revenue to repayment. Maintenance requires continuing resources of its own. Taxes, charges or another identified source must meet those costs, whether the work is carried out by a public agency or a private contractor. Examining debt service and upkeep together gives decision-makers a fuller account of their commitments. A private contract can redistribute responsibilities; the underlying bill still needs a payer.
A 2024 audit by India’s Comptroller and Auditor General shows how planned expansion can displace essential upkeep. It examined the Poonamalle–Walajahpet stretch of NH4, now NH48, in Tamil Nadu. The transport ministry explained that resurfacing the entire road had been deferred to avoid duplicating work before widening it to six lanes. Routine maintenance and some resurfacing had taken place. The auditor nevertheless found that the full renewals due in 2013 and 2018 had not been carried out, resulting in severe deterioration and hardship for road users.
The case shows why an upgrade plan also needs arrangements to keep the existing road usable while work is delayed. Businesses using the road must still make deliveries while they wait for the promised improvement.
The IMF’s Public Investment Management Assessment framework asks whether routine maintenance needs are estimated systematically and whether maintenance spending can be identified in the budget. For a corridor, the next step is to align that provision with the work schedule. Money released after the suitable maintenance season may arrive too late to prevent avoidable deterioration. The authority must distinguish inadequate funding from delayed access to an approved allocation, because each problem requires a different remedy.
A workable plan should name the authority responsible for the road, specify the service expected and establish who inspects the work and authorises payment. The institution commissioning maintenance needs the staff and information to perform those duties after construction teams leave. Otherwise, a contract can specify an acceptable road condition without providing a dependable way to verify that it has been achieved.
Performance-based maintenance can link payment to a measurable service, provided responsibilities reflect what each party can control. The contract should explain how exceptional weather, changes in traffic and government instructions affect the work and its price. Assigning uncertainty without considering who can manage it can make bids more expensive or generate disputes. The aim is a service the authority can supervise and the contractor can reasonably undertake.
Procurement must support that arrangement. Firms need enough notice to organise equipment, staff and financing, while the authority needs qualified bidders capable of sustaining the work. Publishing the tender schedule and explaining inspection and payment procedures helps both sides prepare. Contract size should reflect the available market and the authority’s capacity to coordinate suppliers. Apparent savings at tender can disappear if the maintenance programme proves difficult to deliver.
A dedicated road fund may improve predictability, but its income and spending still need scrutiny alongside other public commitments. User charges also affect the households and businesses relying on the route. Appraisal should test whether expected collections can support the promised service and explain any public subsidy. Overoptimistic traffic assumptions can obscure a future call on the budget, leaving the maintenance authority with a funding problem it cannot solve through the contract alone.
Road maintenance is only one component of corridor reliability. A well-maintained route can still lead to a slow border crossing. ADB’s July 2025 analysis of CAREC border performance examines operational, institutional and regulatory factors affecting trade facilitation. Corridor monitoring should distinguish time lost to road conditions from time lost at the border, so that each problem reaches an institution with the power to address it.
For exporters, reliability affects the amount of money tied up between dispatch and payment. A firm facing uncertain arrival times may hold extra stock or allow a longer delivery window. Average journey times alone miss part of that burden. Monitoring interruptions, their duration and the response to them would help governments assess whether maintenance and border improvements are giving businesses a more dependable service.
A corridor’s completion is an important milestone, but its commercial value depends on whether businesses can rely on it for repeated journeys. Appraisal should establish not only the continuing source of maintenance funding, but also how that money will be turned into work and who is responsible for restoring service when disruption occurs. The distinction is practical: building a connection creates an opportunity; keeping it usable helps an exporter fulfil an order, collect payment and finance the next one.
The opinions expressed are those of the contributor, not necessarily of the RSAA.
