MAKERERE UNIVERSITY

DEPARTMENT OF CIVIL ENGINEERING

FACULTY OF TECHNOLOGY

LECTURE NOTES ON:

CIVIL INFRASTRUCTURE MAINTENANCE

Compiled by:

Dr. Hilary Bakamwesiga

Department of Civil Engineering
Faculty of Technology
Makerere University
PO Box 7062
Kampala, Uganda

Mob. +256 772 347854

Email: hilary.bakamwesiga@mak.ac.ug

February 2022

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 CONTENTS

DEFINITIONS .................................................................................................................................... 3

TYPES OF MAINTENANCE ......................................................................................................... 4

IMPORTANCE OF INFRASTRUCTURE MAINTENANCE .............................................. 5

ISSUES AND PROBLEMS IN CURRENT MAINTENANCE PRACTICES .................. 8

PLANNING, PROGRAMMING, BUDGETING AND MANAGEMENT OF

INFRASTRUCTURE MAINTENANCE ................................................................................... 16

FINANCING OF INFRASTRUCTURE MAINTENANCE ................................................. 23

A STRATEGY TO IMPROVE INFRASTRUCTURE MAINTENANCE ....................... 30

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 DEFINITIONS
Infrastructure: Infrastructure is “the system or structures which are necessary for the operation of a
country or an organization” (Longmans dictionary). Civil infrastructure refers to public and private
works, namely buildings, roads, bridges, and water and sewerage facilities. Civil engineers are
responsible for their planning, design, construction, operation and maintenance. A nation’s
infrastructure system, both publicly- and privately-funded, provides for the delivery of essential
services and a sustained standard of living. An efficient system of infrastructure is fundamental to the
well-being of a country and indispensable for the promotion of productive activities and social
development.

Maintenance: Maintenance may be defined as a set of activities or procedures conducted to return or

keep an infrastructure system in a fully-functioning or operational condition.

In this respect, the deterioration of infrastructure assets represents an enormous drain on national
wealth and causes serious undermining of the development process. The financial consequences of
neglecting maintenance are often only seen in terms of reduced asset life and premature replacement.
However, neglecting maintenance also implies increased costs of operating facilities and waste of
related natural and financial resources.

Efficiency: Efficiency is taken to mean the amount of input resources (usually in monetary terms) per
unit of service delivered. Appropriate examples include cost per ton of garbage collected, the cost per
cubic metre of water produced or delivered. Efficiency can be very useful for monitoring trends in a
service area; comparing different service approaches and establishing targets and standards for
maintenance and service delivery. Care should be taken in using efficiency measures to compare
regions or cities, as many factors will greatly impact on efficiency. Efficiency will vary greatly
depending on the level of service provided, the effectiveness of the service, the scale, and many other
factors.

Effectiveness: Effectiveness reflects the attainment of service delivery or maintenance goals. The
effectiveness of service delivery, or coverage, can be measured according to the percentage of the
population served, such as highway, water or sewerage coverage. The effectiveness of maintenance
activities may also be expressed in terms of equipment or service availability, such as the percentage
of operational road repair vehicles or operational garbage trucks (availability).

Operations: Operations refer to activities involved in the actual delivery of services to users, such as
the collection and disposal of solid waste, cleaning of roads and the treatment and distribution of
water. In other words, “operations” is the use of the infrastructure for its intended purpose.
"Operations" is distinguished from "maintenance" which refers to a set of activities to ensure that the
given infrastructural system is in such a state that it can be operated correctly and with cost
effectiveness. These two sets of activities are closely linked, since operations will not continue for
long without maintenance, and personnel conducting operations also commonly conduct minor
maintenance.

This course deals primarily with maintenance as opposed to operations. However, for some activities it
is hard to draw the line between operations and maintenance. For instance, a brief daily inspection of a
garbage truck by the driver before setting out in the morning could be considered maintenance, or it
could be considered operations if it is viewed as an essential activity to driving the vehicle. These
distinctions are not of extreme importance. Both operations and maintenance are essential to ensuring
that the infrastructure systems constructed provide long-lasting benefits.

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 TYPES OF MAINTENANCE
There are many types of maintenance, depending on the intent, timing or frequency of the maintenance
activities:

(i) Preventive maintenance

This refers to systematic pre-scheduled activities or programmes of inspections and maintenance

activities aimed at the early detection of defects and implementation of actions to avoid breakdowns or
infrastructure deterioration. Preventive maintenance is "proactive" in the sense that these activities are
conducted before a defect occurs. Often the costs of many preventive maintenance activities are low
compared with corrective maintenance or rehabilitation.

(ii) Corrective maintenance

This refers to activities conducted as a result of breakdowns or noticeable infrastructure deterioration.

In simple terms it is making repairs, or even simpler, fixing something. Corrective maintenance is
inherently "reactive" in that it is carried out after some defect is discerned, often because the system is
not operating as intended. In some areas corrective maintenance is known as curative maintenance.

(iii) Routine maintenance

This refers to preventive and corrective maintenance activities carried out more often than once a year.
Some of these activities can be defined on the basis of operating hours.

(iv) Periodic maintenance

This refers to preventive maintenance activities carried out less often than once a year, such as once
every two or five years. These maintenance tasks are often programmed in predetermined plans or
schedules.

(v) Rehabilitation

This refers to activities carried out to correct major defects in order to restore a facility to its intended
operational status and capacity, without significantly expanding it beyond its originally planned or
designed function or extent. Rehabilitation should be distinguished from construction which refers to
the initial creation of the infrastructure, as well as from expansion or extension which refer to the
increasing of the capacity or geographical extent of a system of infrastructure. Rehabilitation activities
are generally more expensive than corrective maintenance activities.

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 IMPORTANCE OF INFRASTRUCTURE MAINTENANCE

Introduction

The inadequacy of the operation and maintenance of infrastructure has serious consequences for
economic and social development. The ability to support productive public and private sector
economic activity is severely hampered by substandard service delivery and deteriorating
infrastructure caused by poor operations and maintenance. Inefficient maintenance wastes scarce
financial resources and results in costly premature infrastructure replacement needs and even complete
loss of assets, thereby increasing fiscal expenditure and debt service in those countries with heavy
reliance on imported materials and equipment. Poor maintenance of environmental infrastructure
(water and wastewater treatment plants, and solid waste disposal systems) can also have negative
impacts on the environment and public health; and it is often the urban poor and women who are the
most adversely affected. The sections below review the significance of maintenance, especially to
developing countries, in terms of economic, financial, technical, and social, health and environmental
terms.

1. Economic and financial significance

Systems of infrastructure to satisfy the need for transport, water supply, sanitation, drainage, solid-
waste management are indispensable to the day-to-day running of a country as well as to overall
national development. Infrastructure accounts for an extremely large proportion of national
investment. In developing countries, on average, investments in infrastructure alone account for one
quarter of annual capital formation and close to half of overall national capital stock. It is estimated
that the rate of investment in the water supply and sanitation sectors alone amounts to about $10
billion. Countries such as Djibouti, Ethiopia, Malawi, Uganda and Zambia invest as much as 30 per
cent of their gross national product in developing infrastructure facilities.

In most countries more than half of the gross domestic product (GDP) is produced in urban areas, and
this share is increasing. At the same time, the population growth in developing countries is highest in
urban areas, increasing labour supply and boosting the demand for urban services. Cities serve as
increasingly important driving forces in regional and national economies, but the cities' ability to
sustain efficient public and private-sector activities is dependent upon well-maintained, efficiently
operated infrastructure systems and urban service delivery.

There are many significant economic and financial repercussions of inadequate maintenance, namely:

 Direct economic inefficiencies and financial losses due to poor maintenance. For example,
neglect of maintenance in drainage can lead to excessive costs as a result of floods as is often
experienced in Kampala City, where failure to maintain storm water-catchment drains necessitates
the allocation of resources for flood-relief operations.
 Deficiencies in one maintenance sector often raise costs in another. For instance, lack of street
sweeping or garbage collection can increase costs for road, sewer and drain maintenance as
accumulated material interferes with proper use or maintenance of these facilities.
 An aggravated balance-of-payments situation. Poor maintenance leads to waste of imported
materials, supplies, energy, parts and other commodities. For example, losses in water-supply
networks waste imported chemicals and, in many cases, imported energy supplies.
 Unnecessary investment in rehabilitation or new facilities. Infrastructure systems which are
not maintained will deteriorate faster, shortening their life, wasting scarce investment funds and
precluding effective cost recovery. Since many of these funds are from credits, this can lead to
worse balance of payments. Inadequate maintenance of public facilities or infrastructure often

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 forces the private sector to invest directly on the provision of services, which is not always the
best solution from the overall city development perspective.
 Lost job-creation. If effectively planned, the maintenance of infrastructure could be a basis for
promoting local contracting skills and also for generating employment opportunities. There are
many tasks of infrastructure maintenance within the competence of small local contractors,
opening the way for them to gain experience and expand to large-scale operations. On average,
infrastructure maintenance requires an annual labour input equivalent to 20 per cent of the total
used in initial construction, but, where maintenance is poor, little advantage is taken of this job-
creation potential.

2. Technical significance

It is becoming increasingly evident that improvement of maintenance is a crucial strategy, in fact, a

required technical input to infrastructure and urban service delivery problems.

Despite the fact that the stock of infrastructure in most developing countries has been attained by
unprecedented capital investment and the stretching of resources to the limit, there is still a generally
inadequate provision of infrastructure services for effective national development. It is likely that
programmes of large-scale construction of infrastructure, which characterized the initial process of
nation-building, will give way to strategies for maximizing returns from existing capital assets, by
maintaining and renovating them for use at optimum efficiency.

Given the present world economic trends, the serious debt situation of many developing countries, and
changing donor priorities, it is clear that the massive investments sustained over the past 30 years
cannot continue at the same rate. Countries are beginning to realize that the most important option for
improving urban service delivery and infrastructure with limited financial resources is through well-
planned operations and maintenance. In addition, if governments currently find it hard to finance new
infrastructure, they will also find it difficult to be able to afford the massive rehabilitation of existing
stock which will arise out of continuous neglect of maintenance.

It should be kept in mind that maintenance expenditures could be relatively small. For example, the
routine maintenance of the road network, sewer, and drainage systems, could sometimes require an
annual expenditure of less than 5 per cent of the replacement cost of the facility.

If maintenance in one sector is ignored, major technical problems can result in others. If roads are not
maintained, the ability of solid-waste vehicles to collect garbage can be severely hampered. This in
turn can result in blocked drains and impaired flood protection works. With rains, local flooding will
develop, and when combined with waste material, can lead to premature deterioration of the road
surface, thus closing the pernicious cycle of infrastructure decay. It becomes clear that maintenance is
a technical imperative for all sectors of the urban environment.

In several developing countries, the construction sector operates with many deficiencies, such as a low
level of construction skills, non-adherence to basic quality-control practices, and non-conformity of
construction materials to accepted standards, so that, often, a facility is predetermined to fail by virtue
of pervasive incorrect design, construction or installation practices. The effect of adequate
infrastructure maintenance practices is, in these cases, significant as a corrective measure to faulty
design and construction practices. Yet even where acceptable standards of construction are adhered to,
infrastructure is still subject to one form of deterioration or another and requires maintenance, simply
to keep it in working order.

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3. Social, health and environmental significance

Even though there is a general situation of unsatisfactory maintenance for infrastructure, the problem
is most significant for low-income settlements. A lack of attention to maintenance of urban
infrastructure can lead to significant impacts on human health.

 Increased prevalence of water-borne diseases, and increasing mortality and morbidity due to
poor maintenance of water supply and sanitation systems. A lack of upkeep will lead to high
leakage rates, low pressures, and service interruptions, promoting infiltration of raw sewage into
water mains. Similarly, a lack of effective solid-waste collection and disposal leads to the
accumulation of refuse in streets, vacant lots, and abandoned private and public land. As a result,
adjacent communities suffer from poor sanitary conditions and health problems. Disposal sites are
often situated on the urban fringes, where the poor are most likely to settle. Lack of solid-waste
collection can lead to clogged storm drains, creating short-term, localized flooding, which can
distribute solid and liquid wastes throughout the settled zones.

Urban malaria is still a significant problem, as the breeding of anopheles mosquitoes is made
possible by the water stagnating in urban neighborhoods due to a lack of sanitation, solid waste
collection and drainage. The scarcity and contamination of water supplies and the lack of
sanitation and appropriate sewage disposal make diarrhoeal diseases one of the most important
health problems in poor urban areas.

 Negative impacts on the environment. The faulty maintenance of sewage treatment plants can
lead to the discharge of poorly treated effluents, greatly degrading surface-water quality. Aquatic
life in lakes, rivers and streams can be completely disrupted by oxygen depletion and high nutrient
loadings from poorly or untreated sewage. Shallow aquifers can easily be contaminated from pit
latrines or solid-waste dumps which are not properly operated or maintained. These polluted water
bodies are often sources for other cities and towns, or even a future source of supply for the
polluters themselves, resulting in poorer water quality, or higher treatment costs for these citizens.
Similarly, the inadequate maintenance of drainage systems leads sometimes to irreversible
processes of soil erosion and the degradation of land resources for urban uses.

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ISSUES AND PROBLEMS IN CURRENT MAINTENANCE PRACTICES

Introduction

The table below shows infrastructure services and pertinent public capital assets which require
operation and maintenance:

Main types of physical facilities which require operation and maintenance

Service
sectors Basic infrastructure, Building structures Vehicles, plant, mechanical and
civil works, electrical equipment
underground utilities
General Building-site areas Offices, stores, Mechanical, electrical installations,
accessibility, workshops transport vehicles
connections
Roads Highways, access Pavements, culvert
roads, paved and inlets, embankments
unpaved.
Water supply Water-supply Basins, treatment- Pumps, deep wells, mechanical/
facilities, transmission plant structures, water- electrical installations in treatment
and distribution mains pumping stations, plants, valves, fire hydrants, public
reservoirs faucets, house connections, meters,
laboratory equipment
Main drainage Drains canals, Pumping stations Pumps, gates, control equipment
and flood culverts, dikes,
protection retention basins
works
Sewerage Pipes, access holes, Basins, treatment- Pumps, mechanical electrical
systems, low- oxidation ponds plant structures, public installations in treatment plants,
cost sanitation latrines, pumping vehicles for septic tank emptying,
stations other sanitation systems, laboratories
Solid-waste Dump sites Stationary communal Collection vehicles, handcarts,
collection and storage units, transfer containers, standardized dustbins,
disposal stations equipment at dump sites, composting
plants

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The table below shows an overview of common types of infrastructure operations and maintenance
work:

Service
Operations Maintenance
sectors
Cleaning, Collection of rent, Painting, clearing of drainage system,
Buildings
operation of latrines rehabilitation.
Grass cutting, drain clearing, culvert
maintenance, repairing potholes and ruts,
Roads Road sweeping patching, sealing cracks, re-gravelling
shoulders, placement of warning signs and
diversion works, resealing
Operation of pumps; operation and Leak detection and repair; repair of valves and
control of treatment processes; fire hydrants and catchment basins; structural
Water supply macro and micro meter reading; maintenance of water storage tanks and other
connection and disconnection of structures; protective painting and external
consumers surfaces; motor and pump maintenance
Desilting of main drain channels; cleaning of
Main drains
Operation of pumping stations; line drains and catchment basins; structural
and flood
operation of warning and control maintenance of drain lining; cleaning and
protection
equipment minor reshaping of unlined drains;
works
cleaning/clearing of culverts
Operation of control of treatment
Sewerage Cleaning of sewer lines; structural
processes; connection and
systems and maintenance of sewers, replacement of sewer
disconnection of houses; operation
low-cost pipes; emptying of septic tanks, cutting and
of communal latrines; night soil
sanitation sludge removal from waste stabilization ponds
collection
Door-to-door collection; street Structural maintenance of communal storage
Solid-waste sweeping; store clean-up; gully/pit units, transfer stations, etc.; maintenance of
collection and emptying; transfer and haulage to drains and other installations and disposal
disposal disposal site; sanitary landfall; sites; maintenance of mechanical plant;
operation of treatment plants vehicle maintenance

There are many problems and issues associated with current maintenance practices. These can be
classified into technical, institutional, management, financial and policy problems. The sections below
review these problems and issues in sequence. However, it must be realized that in most cases the
problems are interlinked. For example, often technical problems have root causes in management and
financial issues, and many authorities have significant financial problems due to policy restrictions on
local revenue generation. Thus, a full understanding of maintenance problems requires a broad
perspective on the interrelationship between the different components of service management, as well
as between the different infrastructure sectors.

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1. Technical problems and issues

(a) Inappropriate design and systems

Many maintenance problems are predetermined by the design of the infrastructure itself. In many
countries, traditional engineering training and donor technical assistance programmes lead to the
adoption of norms and standards from developed countries, which are inappropriate to the technical,
economic, and financial context into which they are placed. High capital cost, and overly complex or
sophisticated systems can create undue maintenance requirements from the moment the capital asset
becomes operational. Such inappropriate systems require skills which are not present, parts and
supplies which must be imported, and financial resources beyond the capacity of the users, and do not
take advantage of the abundant labour and local resources.

(b) Inappropriate/inadequate technologies

Even where steps have been taken to provide correct designs to minimize avoidable maintenance,
there are still the problems caused by errors in construction and installation on site. Poor materials also
contribute to maintenance problems through rapid deterioration. Many materials for roads or water
lines are below standard due to poor quality and inadequate handling and storage practices. In many
countries material specifications are imprecise. In other cases, the materials used often do not conform
to specifications, due to faulty fabrication, absence of quality control, and inadequate construction or
maintenance supervision. Typically, the lack of foreign exchange restricts users to poor-quality
alternatives.

Maintenance operations are often hampered by limited access to tools, equipment and vehicles. In
many cases, tools or equipment are simply not available due to the lack of foreign exchange or
financial resources. Planned maintenance activities cannot be conducted on schedule, or are simply
ignored, reducing programme effectiveness and frustrating staff. Bad management and maintenance
practices are, to a large extent, responsible for the unsatisfactory state of tools, equipment and vehicles
available to maintenance units. Tools and equipment are either over-used, requiring replacement
prematurely, or under-used, thus not making them cost-effective.

Many maintenance efforts are greatly complicated by a broad mix of different brands and sources of
electromechanical equipment, and vehicles. Due to "tied-aid" and weak procurement practices,
agencies end up with such a huge variety of equipment that spare parts availability and performance of
maintenance tasks become unnecessarily complex.

(c) Lack of skilled manpower

Improper performance of maintenance tasks is also a common problem which can be attributed to
poorly trained, under-paid, unmotivated staff; or a lack of oversight and standards enforcement by an
overtaxed management.

(d) Misuse/abuse of infrastructure

Finally, the misuse of infrastructure can cause unnecessary demands for maintenance and repairs. Poor
enforcement of user-requirements and, to some extent, lack of user-involvement during project
development contribute to much abuse of infrastructural facilities.

2. Institutional problems and issues

Existing institutional arrangements often lead to a dispersion of responsibilities for design,

construction, operation or use, and maintenance of a capital asset. Many large projects are designed by

10
national authorities, and are transferred to localities to operate without any input from the local
population or maintenance units on needs, design suggestions, or maintenance and revenue- generation
capabilities. National agencies can thus saddle a local authority with an unmanageable asset which
does not meet local needs. Typically, the maintenance unit often does not even have access to basic
working drawings, to as-built drawings for buried infrastructure and accessories, and to operating
manuals for installations and services.

In many cases, due to a multiplicity of intervening institutions, or weak policy directives, there is a
lack of clear institutional responsibilities. This produces gaps in jurisdictions, which in extreme cases
causes the exclusion from attention of whole sections of an infrastructural network. Often, roles are so
poorly defined that a number of agencies are responsible for the same task but none perform it
expecting others to do so. Such agencies are clearly not accountable for the services they provide.

There is frequently a complete lack of interagency or interdepartmental communication, coordination

or collaboration even among agencies working in the same or related sectors. Many infrastructure
facilities, such as solid waste and drainage interact with others in such a manner that, if one is poorly
maintained, the operation of others is immediately affected. Another example of such lack of
coordination is the recurrent high frequency of street excavations and trenching for utility repairs
which are then poorly reinstated. Coordination between the utilities and street maintenance crews
would help eliminate duplication and disruption of service.

Many local authorities or maintenance units have staffing problems. There is hardly any relationship
between the staff assigned to a maintenance unit and the volume of work required. Typically agencies
are highly overstaffed at the lowest levels (semi-skilled and unskilled workers) in an effort to combat
unemployment, but are critically lacking at the middle and upper levels (technical and management
functions). A number a factors can be cited as explanation.

 First, public agencies are constrained by low and rigid salary scales, making it hard to attract
competent, motivated staff, particularly in technical and management fields, where the draw
to the private sector is much stronger.
 Staff have few incentives to work or perform to the best of their abilities, leading to poor
morale. Maintenance is often a low-status position, even a professional backwater, compared
with the more glamorous high-investment areas of design and construction.

Very few local agencies have any staff training programmes. In addition, maintenance is not a
common subject for local engineering or management training. If discussed, the subject of
maintenance is normally treated in a superficial manner. Efforts to train individuals abroad in an
isolated and programmed manner have been unfruitful. A few training strategies, such as in-service
training and programmes geared to training entire institutions, have yielded good results but are
usually not widely applied. Areas of training that have received the least attention are in overall
maintenance management, especially needs assessment, quality-control practices and financial
management.

Local authorities are reluctant or poorly equipped to take advantage of possibilities for contracting out
certain maintenance activities. Many civil servants are biased against private contractors, assuming
costs will be exorbitant. Local contractors would often be cheaper, but local authorities have little
experience in contract development or monitoring. National governments usually put little effort into
assisting local agencies to introduce contracting.

National and local authorities are also often poor at mobilizing local community participation and
input in infrastructure projects. Not only would such efforts lead to projects which better serve real
demand, but such "ownership" would greatly foster support for cost recovery as well as direct
participation in maintenance efforts.

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3. Management problems and issues

Many maintenance units in local authorities operate in a crisis-management atmosphere, hurriedly

running from one repair to the next. They are rarely sufficiently organized to perform preventive
maintenance tasks, so frequent repairs and breakdowns continue in a cyclic fashion. The causes for
this state of affairs are many. First of all, many agencies lack qualified and experienced management
staff, as noted above. Supervision is usually minimal; field inspections too sparse, and their timing
unpredictable; little if any appraisal is made of work done to guide staff as to what standards are
expected of them; and job assignments are too vague to inculcate a sense of duty and accountability.
Daily activity reporting is not adequately maintained, and communications between field staff and
central offices are often not expeditious.

Secondly, maintenance offices rarely conduct planning, programming and budgeting based on an
assessment of needs. Staff have no standards for the nature and timing of maintenance, nor standards
on how much effort or funds a given activity should require. These standards form the basis of plans
and budgets, but they are usually absent. Budgetary allocations are based on ad-hoc repetitions of
previous budgets, and rarely reflect actual needs.

Thirdly, few agencies have inventories or conditions assessments upon which to base such plans.
Considerable time is wasted in the diagnosis of problems, as workers and managers do not have the
detailed information on the assets they are working on. Also, they have little information on where the
maintenance needs are the greatest, focusing instead on those where complaints are the loudest.

Fourthly, the lack of a maintenance plan often is accompanied by the absence of simple systems to
direct staff, such as work order systems. Next, they pay little attention to accumulating records of
maintenance performed, or analysing them to evaluate equipment performance and identified
problems. A typical reason for delays in response to even crisis-maintenance requests is that materials,
parts and tools are out of stock. This is the result of a fundamental management deficiency, arising
from poor procedures for stores and stock control. In addition, maintenance management spends little
time monitoring the progress of work, evaluating performance, and establishing targets for their work.
With no framework for evaluation, staff and management are wandering through their appointed tasks
without direction or goal.

Lastly, it must be pointed out that the poor condition of many infrastructure assets creates a high
incidence of failures and problems, fostering the crisis atmosphere. The cycle could be broken if
management could be improved, the maintenance approach shifted to planned preventive actions,
systems rehabilitated and maintained, and the work stabilized into an effective and efficient service
delivery operation.

4. Legislative and policy problems and issues

Legislative barriers in some countries directly affect the efficiency of maintenance. For instance, it is
not uncommon to find cases where the use or non-use of sub-contractual arrangements to carry out
maintenance is predetermined by laws based on no technical criteria. In other countries, there is
legislation defining geographical jurisdictions for maintenance units, leading to the neglect of some
infrastructural facilities which are not clearly covered by the law.

Often, poor revenue generation is a consequence of legislative barriers. For example, even though
property taxes are intended to be the principal source of revenue for most local authorities entrusted
with maintenance functions, the power to set the rates does not rest with them. There are cases where
rates have remained unchanged for 15 to 20 years. Frequently, maintenance units whose operations
could readily be based on cost-recovery principles, are not empowered to charge realistic rates for the
use of facilities or to revise charges to reflect realistic expenditures or to enforce charges against

12
defaulters, and, more importantly, do not possess the authority to explore innovative and tested
strategies for revenue generation.

Maintenance often is a low priority on the agenda of political decision-makers. This may be caused by
a lack of understanding of the financial and economic consequences of poor maintenance and
infrastructure deterioration. Political processes tend to favour large capital projects which appeal to
political constituencies, and lend status to those who plan and foster them.

Similarly, donor agency practices may lead developing-country governments to be biased against
maintenance. Donor funds are almost always oriented toward loans or grants for capital projects,
leaving maintenance to the governments. Donors often are more concerned with ensuring the isolated
soundness of capital-investment projects than assuring that those investments are accompanied by
maintenance plans and improvements, to reach well defined service-delivery targets. Donors do not
give sufficient attention to maintenance procedures and service-delivery results, when monitoring loan
programmes.

Lastly, governments do not have the policy-making apparatus to analyse current policies and develop
improved ones. Directives from central government are often unclear and incomplete. Line ministries
do not have the staff with the experience or interest to assess the maintenance policy framework,
evaluate impacts of policy decisions, and begin to work with local authorities to evaluate policy
options and assist in their implementation.

5. Financial problems and issues

Local authorities suffer from a host of problems relating to the financing of maintenance, including
inadequate financial resources, obsolete accounting systems, weak budgeting, problems with
central/local relations, and a lack of concern for financial performance and accountability.

Local authorities are often poor at generating local revenue, because they never had to depend on these
resources. But as the amount of national government transfers declines, local financial performance is
becoming more critical. Revenue collection is commonly under 50 per cent of the potential.
Deficiencies in legal mandates to impose taxes, outdated assessments and rates, inadequate cadastres,
inefficient billing and collection procedures, and delinquent payments are some of the common
reasons for poor general revenue collection.

Direct cost recovery is also problematic. Weak policy guidelines, national restrictions, inability to
compute necessary charges accurately, opposition to raising tariffs to requisite levels, and inefficient
billing and collection procedures are some of the common reasons for low direct cost recovery. Even
in potentially high revenue-generating sectors, such as water supply, many government agencies
record losses. Some of these aspects are discussed in more detail below.

(a) Inadequate financial resources

This may be due to;

 An inadequate revenue-collection authority which is a product of not assigning certain

powers for taxing to the local authority and of limitations on setting the rates for certain taxes.
 Even when local authorities have adequate revenue-generation powers, there are often
problems with the local revenue base.

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  First of all, there may be too many individual revenue sources, making it difficult to focus
on the most productive ones.
 Secondly, local taxes are subject to uncontrollably variable revenue yields. For example,
revenues based on the volume of trade passing through a city would drop catastrophically if
that trade were cut off to a jurisdiction because of re-routing of a road.
 Thirdly, personnel systems can make tax administration unfeasible. Tax assessors and
collectors may be paid at compensation levels far short of a practical living wage resulting
in few or no personnel resistant to graft, or personnel may be rotated in and out of positions
so frequently and haphazardly that little competence can be established.

The combined result of limited authority and poor revenue collection is a fiscal capacity well below
the need for funding local public services.

On the expenditure side, local-government operating budgets are dominated by personnel costs which
tend to rise as fast as revenues will allow. While salary levels are normally set by central government
for all government personnel and cannot be controlled by local government, the number of employees
is often at the discretion of local government. In general, local governments tend to be overstaffed at
the lower skill levels (e.g., street sweepers) and understaffed at the higher skill levels (service
department managers, engineers, finance and accounting). This means that planning and supervision of
technical services and financial administration tend to be poor.

(b) Obsolete accounting systems and practices

Accounting systems typically provide minimum information for financial management. Designed
primarily to restrict the spending of funds to authorized line items only, accounting systems are rarely
designed to inform a manager of the relationship of funds expended to services provided. Even where
programme accounting exists, manual methods often produce inaccurate and untimely statements. The
almost complete lack of automation of accounting slows down monthly, quarterly, and annual
accounting reports, sometimes to the point of rendering them virtually useless. Should fraud prevail,
efforts to improve accounting practices meet resistance calculated to prevent improvements to the
system?

Similarly, accurate accounts of the costs of delivering services are almost non-existent in the local
authorities of most developing countries. Cost accounting systems are crucial to maintenance in that
sound decisions depend on accurate costing of jobs to repair sewer or water mains. Job-costing
techniques remain, largely unknown to the department heads and technicians who design and run
maintenance units. This is compounded by managers and governing boards who ignore the cost issues
of local service provision.

(c) Faulty budgeting systems and practices

Too often budgeting systems militate against sound resource allocation. The budget process, as
practiced in many local jurisdictions, fails to raise fundamental issues on revenue and spending. It fails
to spur analysis and investigation aligned at reprioritizing operations and raising the efficiency and
effectiveness of those operations. Instead, the revenue and expenditure histories of previous years are
repeated. Budgeting becomes an exercise performed by an accounting clerk simply copying one year's
appropriations directly into the next.

In many countries, the local-authority budgeting process is not accorded adequate supervision by the
central government. While most countries require formal submission of annual budgets from local
authorities, few provide a detailed examination or monitor compliance with the budget. Where
compliance is required, multiple revisions of local budgets are common, making the budgeting process
a mere academic exercise. Again, as is the case with accounting systems, the lack of basic automation

14
promotes a static approach to budgeting. Forecasting techniques, likewise, suffer from a lack of basic
automation and simple-to-use software operating on low cost microcomputers. Staff, all too familiar
with a static regulatory and administrative environment, that stifles initiative, fail to take advantage of
these newer technologies.

(d) Gaps in the transfer of central-government funds to authorities responsible for maintenance.

There are four main problems with central government transfer programmes in developing countries:

 The level of grant funds available for sharing with local authorities is shrinking in most
countries due to the fiscal crisis facing central governments in general. In a few cases, central
governments are transferring additional resources to local authorities to accompany
decentralization of public services. However, the broad trend is towards a reduced, or stagnant,
level of funds transferred from central government to local authorities.
 The level of grant funds may fluctuate unpredictably from year to year, making local budgeting
difficult. Even when an amount is set for the fiscal year, financial problems confronting the
central government often ensure that a fraction of the grant allocation is distributed in the last
quarter of the fiscal year.
 Grant funds are often earmarked only for capital construction, pressing local governments to
fund new facilities which they cannot afford to operate and maintain adequately. Were the
funds made available for maintenance as well, the life of existing facilities could be extended,
making for a much more efficient use of resources.
 Grant funds often are used to make UP deficits in operating budgets, in essence rewarding
those governments which perform poorly in mobilizing resource. This is justified as a way of
compensating poorer localities for differences in the economic base. However, it generally
results in rewarding localities with a poorer revenue-generating performance since the grant
allocation is not tied to efforts in tax collection but rather to simple budgetary deficits. This
problem has been addressed creatively in the Calcutta region by the revised grant structure
which ties grant allocations to the achievement of agreed municipal government revenue and
expenditure targets.

(e) Limitations of central government regulation

Central governments in many developing countries are promoting decentralization programmes with
the intention of turning over to local government an increasing share of the responsibility for local
service provision. In many cases, this responsibility is being passed down without revenue raising
authority to go with it.

(f) Lack of performance orientation in local service delivery

Perhaps the most fundamental problem in improving the maintenance of infrastructure is the lack of
concern for performance, no accountability, and no spirit of service-provision orientation on the part
of concerned government agencies. Without such an orientation, the maintenance of facilities is not
seen as a critical element in the quality and cost of service provision. As local governments are forced
to move towards direct cost recovery from services to consumers, such an orientation should become
necessary since consumers might not pay for services poorly delivered.

One significant problem in establishing a performance orientation is the lack of performance

measurement techniques. While performance measurement in local government has enjoyed some
popularity in certain industrialized countries, it is virtually unknown in most developing countries.

15
 PLANNING, PROGRAMMING, BUDGETING AND MANAGEMENT OF
INFRASTRUCTURE MAINTENANCE
The improvement of planning, programming, budgeting and management is crucial to ensuring the
efficiency and effectiveness of urban service delivery. Many of the deficiencies in maintenance are
linked to weak planning, ad-hoc budgeting, and poor management. This chapter outlines an approach
to planning and budgeting, based mostly on the notion of preventive maintenance and task-oriented
budgeting, and describes a series of management tools that will assist in implementing such a
programme.

A. Initial steps in planning infrastructure maintenance

1. Asset inventories and condition assessments

The first step in planning maintenance will be to conduct a detailed inventory and condition
assessment of all assets, fixed or mobile. The purpose of such an inventory is to identify and collect
technical information on each asset to be maintained. The purpose of a condition assessment is to
define general as well as specific data on maintenance, repair and rehabilitation needs. Inventories also
form the database upon which regular record-keeping is based, as discussed later in this chapter. These
tasks will require a massive effort to collect and process field data, especially if such inventories do
not exist, or are out of date. Efforts should not stop with a one-time inventory and assessment; follow-
up inventory and inspection efforts must continue on an annual basis to keep the information up-to-
date, and keep maintenance plans tuned to the real needs in the field. Following are the conditions
involved:

 The initial step in the inventory/condition assessment process is to determine the jurisdiction of
the maintenance authority in question: that is, to determine the geographical and functional zone
of infrastructure elements to be maintained.
 The next step is to develop a complete list of all hardware, with relevant technical details. Any
existing maps or records will be the obvious starting place. However, as new systems or facilities
are designed and constructed, engineering drawings of infrastructure elements such as pumping
stations, sewer lines and drains should be available. The final as-built drawings will help
immensely towards establishing this inventory. However, there will be many cases where no up-
to-date, reliable, drawings exist, so a lengthy inventory process must be undertaken. Simple
inventory forms will have to be developed, and completed site by site.
 Once the raw data have been collected, summary lists can be prepared. For example, lists could be
developed by location (street, water main) and by function (pumping stations, vehicle workshops,
distribution transformers etc.). Such aggregate data can begin to build a picture of the overall
condition of assets in each sector and in the combined infrastructure condition.
 As field data are being collected, condition assessments can be performed, and results noted on
the same form as the inventory sheets, or separately. Rating of the condition of infrastructural
elements and vehicles and equipment can be made using the following scale:

Good: The utility value of the existing asset is not essentially different from the utility value of a
similar new asset.

Fair: Maintenance/rehabilitation is needed, but the condition of the asset does not yet impose
severe constraints on its utilization.

Poor: The asset is seriously deteriorated or will deteriorate within several years. Comprehensive
rehabilitation or replacement is required.

16
2. Resource inventory

An inventory of the human, material, and financial resources for maintenance should be conducted
along with the inventory of physical infrastructure to be maintained. These are the basic inputs
required for the planning process. Following is listed useful data to collect, and indicators to develop
such as:

Materials:
Indicators to be used to examine material, equipment and facilities resources in maintenance agencies
and departments include:

 Vehicles: inventory with data on type, age, condition and availability.

 Workshops and special facilities: inventory and condition.
 Workshop tools and equipment: inventory and condition
 Stores for tools, equipment, spares, materials: procedures used, shortfalls incurred

Finance:
Indicators to be used to examine financing practice and resources in maintenance units include:

 Source of funds.
 Annual maintenance expenditure.
 Percentage ratio of annual maintenance expenditure to total asset value.
 Percentage ratio of annual maintenance expenditure to new capital investment.

Staffing:

 Existence of a staff inventory.

 Availability of job descriptions.
 Staff turnover rate.
 Staff internally recruited as percentage.
 Typical number of applicants for vacant positions.
 Ratio between salary/benefits in public versus private sector.
 Breakdown between professional/craftsperson/unskilled staff.
 Total staff per unit of infrastructure or urban service delivery.

3. Task identification and definition

Once a detailed inventory of the infrastructure to be maintained has been developed, the maintenance
tasks which must be performed on each element must be identified. Three types of maintenance tasks
will have to be identified:

 preventive maintenance,
 common corrective maintenance,
 and rehabilitation tasks.

For each task the identification should include data on: task name, brief description, and frequency
(daily, monthly, annually, bi-annually).

Another way of viewing task definitions is to consider them as maintenance-work quality standards;
thus, they define the level of maintenance service that should be provided. For example, the frequency
of defect detection efforts on roads will define the level of maintenance service, with impacts on
service provision and on other infrastructure sectors. Choosing standards will be a difficult trade-off
between maintenance expenditure, rehabilitation expense, and capital investment in replacement of the

17
assets. This issue is discussed in more detail when multi-year maintenance planning is discussed later
in this chapter.

Discussions with other users of the equipment may also be useful, but the same cautions should apply.
Thus, the task identification must often start from zero. For vehicle, pumps, engines and other
electromechanical equipment, the best place to start is the recommendations of the manufacturer,
which should be able to specify the above data on each task to be done. Engineering handbooks and
manuals will also be useful references. A final source of information would be outside consultants
with maintenance planning experience with the relevant equipment.

4. Maintenance task standards

Task standards must be developed for planning programming and budgeting purposes, but also to
guide actual implementation, and facilitate monitoring and evaluation of performance. The primary
purpose of the standards, as opposed to the task descriptions, is to identify the resources (human,
material and equipment) necessary to complete a given task. With a predetermined target, crews and
workers can be made accountable for their time and expenditures, promoting more efficient work.
Managers can easily measure performance and analyse variances, and can be held accountable
themselves to the workers they direct.

A maintenance task standard should specify:

 Task name;
 Task description;
 Task code;
 Date of maintenance standard;
 Scheduling criteria or frequency;
 Task steps or work methods;
 Personnel, equipment and materials needed;
 Work measurement unit;
 Estimated productivity (such as work measurement units/day);
 Estimated cost per work unit, based on costs of labor, materials, and equipment.

Maintenance standards demand a significant amount of work to develop. Local skills, tools,
maintenance practice and costs make standards specific to one location. Thus, standards have to be
developed probably at national level, with some allowance for local modifications.

A key source of information for standards development is records of completed work orders giving a
profile of previous work. Even if data on past practices are available, they should not be the sole basis
for task identification, as old procedures may, in fact, be inefficient and in need of improvement.
Discussions with other maintenance agencies are useful, but similar cautions should apply, as
conditions vary. Engineering handbooks and manuals are also useful references.

A final source of information would be outside consultants with maintenance planning experience
with the relevant equipment. Initial standards will have to be based on engineering experience,
judgment and practical assessment.

If experience or ad-hoc studies show that a particular task can be completed in less time, or requires
more, new standards and task descriptions can be developed. As maintenance staff grow more
competent, standards should be revised with higher performance targets. Overall, the use of standards
must be viewed as a dynamic process, with historical analysis of actual performance as the tool to
update and revise standards.

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5. Strategy options

A good maintenance plan will consist of a blend of maintenance strategies. Planned preventive
maintenance is generally the preferred approach, a realistic, practical programme makes use of other
approaches as well. It is important to review each of the tasks to be performed and determine if there
are some to be carried out using alternative approaches. For example, using opportunistic scheduling,
water-line maintenance and road-surface maintenance could be coordinated so that a newly surfaced
road does not have to be torn up for water-line maintenance.

A preventive-maintenance approach should not be developed without making allowances for

corrective work, so that the preventive work is not discontinued as soon as an emergency develops. It
should also be considered that the amount of corrective work will decline as preventive maintenance
and rehabilitation activities improve. Another important issue is the large backlog of deferred
maintenance that will have to be programmed and financed. Various alternatives will have to carefully
considered by technical and political decision-makers. The goal should be to programme this backlog
over a number of years in coordination with rehabilitation efforts. These and other issues of multi-year
planning are discussed later in this chapter.

Overview of maintenance strategies

 Planned preventive maintenance with prescheduled systematic programmes of inspections and

relatively low-cost maintenance activities aimed at interrupting the deterioration cycle. This would
generally be the preferred strategy particularly in environments where labour costs are low. But it
should be supplemented by elements of the following:
 Pre-specified standard maintenance cycles including rehabilitation and replacement.
 Repair of facilities at risk, i.e., those that are most likely to develop breakdowns because of their
environment, use and age (e.g., pipes in corrosive environments).
 Reduce the need for maintenance of specific facilities through systematic changes in design and
construction and for demand on these facilities to limit wear and tear.
 Opportunistic scheduling of maintenance works, i.e., maintaining facilities when this can be done
at the least inconvenience and cost. (This particularly applies to underground utilities and involves
systematic interagency and interdepartmental coordination so that, e.g., inspection or repair of a
sewer main can be done when street repairs or repairs of other utilities in the same location are
scheduled, thus initiating costly street diggings and public inconvenience.)
 Worst first. Repairs and replacement done on a 'worst first' basis decided as a result of monitoring
of condition assessment results. (This strategy, which is practised in many cities, assumes that the
authority has a certain minimum of field inspections and records but it is not necessarily a correct
strategy.)
 Crisis maintenance. Sometimes referred to as emergency or breakdown maintenance, i.e.,
responding only to breakdowns and public complaints (although this is a generally discouraged
strategy, it may in certain circumstances be cost effective, for example, where an installation is
particularly inaccessible to prevent maintenance).
 Priority maintenance. Implement routine maintenance for all new facilities while programming the
maintenance backlog for existing facilities separately, attending to this - backwards in time priority
- with surplus capacity or special contracts.

Budgeting and programming of infrastructure maintenance

Once the initial steps described above have been taken, the planning process can turn to programming
and budgeting. This will involve initial estimates of resource requirements, the budget process, and
then careful programming to develop schedules. These are the steps in a recommended annual
planning process. But consideration should also be given to developing multi-year maintenance plans

19
to allow for evaluations of trade-offs between routine maintenance, periodic maintenance,
rehabilitation, and capital investment.

1. Resource requirements

The budget process begins with the estimation of resource requirements for maintenance for each
system, by sector. The process involves the synthesis of inventory results, maintenance task definitions
(quality standards), and maintenance task standards (quantity standards). Estimates will have to be
made of all expected resources, including labour, materials, equipment, transport, management and
administrative costs.

(a) Maintenance programme worksheet

The inventory and maintenance task definition process has identified 22 typical tasks on urban water
systems, each with its own code. The maintenance task standards have defined the number of times
per year (called the planning factor) that this task needs to be performed per inventory item, as well as
the target productivity for the task. The total number of work-days for each day can be found using:

Annual workdays = (Inventory Amount x Planning factor productivity)

Crew size

These can be added up to get total work-days.

(b) Material quantity worksheet

The next calculation is to compute the quantity and cost of required material, based on the estimates in
the maintenance task standards, and arrive at a total materials estimate.

(c) Equipment use worksheet

The particular tasks in the preceding calculations did not require specialized equipment, so a figure
from a similar manual on roads and streets is provided.

(d) Maintenance cost worksheet

A summary cost sheet is then completed with the labour, material and equipment costs for each task,
and the results are totaled. Allowance is made for management, engineering and other costs. These
results are then passed into a full budget which has me items for crew labour, direct management,
transport costs, administration, and pro-rated costs of central office, maintenance engineering staff etc.

This type of computation will give an estimate of direct maintenance costs - but not a full operating
budget.

2. Maintenance budget preparation

Once the above steps have been completed for each system, and resource requirements prepared for
each sector, an overall maintenance budget can be compiled. This will involve summing up the
resource requirements for all systems the agency has jurisdiction for and comparing them with funds
available. If the funds available are less than the requirements then revisions will have to be made to
the quality or quantity standards to arrive at a final programme and budget.

If a given local authority handles maintenance in a number of sectors, the resource requirements
should be compiled in such a way that relationships between different sectors are accounted for.

20
Several aspects can be taken into account. First of all, ways to coordinate activities to reduce overall
resource requirements should be investigated. If one maintenance service needs a special piece of
equipment occasionally, ways to borrow such equipment from other services will save funds. If labour
requirements are such that there are idle personnel in one activity, they could be applied to intermittent
activities in another sector. Such interlinking should not be taken to an extreme such that maintenance
logistics become burdensome. Secondly, ways to coordinate activities to increase maintenance
effectiveness should be employed. For example, coordinating road, drain, and combined sewer-line
maintenance could be programmed together to maximize the benefits of each. If waterline
rehabilitation is to take place, then any planned street resurfacing should be planned for after such
rehabilitation to save double-resurfacing costs. This raises the question of activity scheduling, which
will be discussed below. The fact that such issues concern both budgets and scheduling illustrates the
iterative nature of the planning, programming and budgeting process.

The allocation of resources into different sectors by a local authority will be an interplay between
technical, management and political concerns. Local political pressures and financial capabilities,
national policies on standards and grant allocations will tend to alter the rational technical approach
outlined above. Every effort must be made to make the rationale behind the maintenance standards and
resource requirements clear. The maintenance implications of budget allocations different from the
resource requirements must be made clear to decision-makers. The upper-level management of the
local authority will make the final resource allocation decisions.

3. Maintenance schedules

Once a budget is agreed upon, task scheduling will have to be done. In fact, as outlined above, some
preliminary work on scheduling may also be carried out in the budget process to maximize
coordination of activities. Such schedules serve two purposes. First, they serve as a guide for
implementation of maintenance activities, outlining which task should happen and when. These
schedules will feed directly into work order systems discussed later in this chapter. Secondly, they can
be structured to facilitate monitoring the efficiency and effectiveness of maintenance task
implementation.

4. Multi-year maintenance plans

The discussion above has focused on the annual cycle of programming and budgeting, with the
emphasis on routine maintenance. But provision must also be made for periodic maintenance
(activities which happen once every two or five years), as well as rehabilitation activities. They must
be planned, budgeted and programmed into multi-year budgets. The same planning, budgeting and
scheduling techniques noted above for annual routine maintenance can also be applied to the periodic
maintenance on a multi-year cycle. Based on inventories and condition assessments, periodic
maintenance tasks can be defined, and standards established. These can be used in the programming
and budgeting worksheets described above, on a sectoral level.

Rehabilitation planning will be slightly different. Assets in poor condition will need rehabilitation
work or replacement as soon as possible. Assets in fair condition will best be served with some
rehabilitation work early, and probably more later. However, the rehabilitation activities will usually
present a large backlog of work to be done, which will have to be spread over a number of years,
probably involving considerable capital funds. In this way, maintenance plans will have to be
coordinated with investment programmes and capital-improvement plans. Such large development
plans must be based on in-depth analyses of current asset capacity and condition, service demand over
a considerable horizon, and detailed analyses as to the best way to meet future service goals
efficiently. It will be important, in the development of multi-year maintenance plans, to evaluate trade-
offs between routine, periodic maintenance and rehabilitation or replacement. More effort on routine
could diminish the requirements for periodic and rehabilitation work. Another approach would be to

21
decrease the routine, and accept periodic replacements. These trade-offs will vary greatly depending
on the type of asset or equipment involved, and must be evaluated on a case-by-case basis. There are
two common tools used to try to make these decisions. The first is repair/replace analyses, and the
second is life-cycle costing. In general, at the beginning of their lives assets have low maintenance
costs and high value. As they get older, asset values decline, maintenance costs rise, but the sum, or
total financial value still declines. At some point, rising maintenance costs overwhelm the asset value
and overall maintenance begins to rise. It is at this point that assets should be replaced. Lifecycle
costing uses the principle of discounting to handle costs spread out over many years. All capital and
operations and maintenance costs are computed for each year over the life of the asset, discounted to
the present, and a total present value found. Alternative maintenance approaches can be evaluated
financially, to decide on the best policy. The difficulty with these approaches is that the data upon
which to base them are often not available since actual performance and costs have been rarely
measured so carefully in developing countries.

C. Management systems and practices for maintenance

These are the systems and practices which are or can be applied by local authorities to improve the
efficiency and effectiveness of maintenance of infrastructure. The various components include:

 Institutional organization;
 Staffing, incentives and training;
 Maintenance standards, plans and budgets;
 Work order systems;
 Record-keeping;
 Monitoring, evaluating, and reporting;
 Computerized management information systems;
 Contracting.

22
 FINANCING OF INFRASTRUCTURE MAINTENANCE

Many maintenance problems can be linked to finance and cost-recovery constraints. Insufficient
revenues lead to low salary scales, poorly motivated unproductive staff, deficient planning, budgeting
and management, a lack of parts, supplies, equipment and vehicles, and the delay or non-performance
of many maintenance tasks.

This part reviews some basic aspects of maintenance costs; outlines current problems and issues with
maintenance finance and cost recovery; describes strategies for finance and cost recovery with
emphasis on improved revenue collection, and also reviews financial performance, monitoring and
accountability.

A number of funding mechanisms are commonly used for maintenance of different sectors of
infrastructure including:

 Allocations from local general revenue;

 Grants or transfers from national-level governments based on national general revenue;
 Earmarked levies, special assessments, or dedicated taxes;
 Direct cost recovery through user charges.

Direct cost recovery from users has many advantages. Given a fee for service, beneficiaries pay for the
services they consume, generally in accordance with the amount they use. Rates can be established
with cross-subsidy blocks which can make the service more affordable to the poor. Such direct
charging tends to minimize wastage and maximize efficiency. This mechanism is most commonly
applied to services with an easily measured output such as water supply. In some cases, direct cost
recovery can be applied to related services, such as charging for sewer services based on the amount of
water consumed.

However, for many types of infrastructure or services which benefit the general public or even specific
groups, it is difficult or even impossible to levy a user charge. For example, drainage and flood
protection do not lend themselves to user charges. In this case, one common solution is to earmark
certain taxes for that purpose. While this approach can prove effective in certain cases, its application
requires an efficient management of resources to ensure its correct control and targeting. Also, it has to
be applied after a proper evaluation of the distortions it can cause on other services costs and prices,
and its relation to overall fiscal and economic policy, especially on revenue generation and fiscal
expenditure.

A. The cost of infrastructure maintenance

Detailed information on the cost of infrastructure maintenance is important to planning, budgeting,

monitoring, and to financing and cost recovery. Without relatively accurate information on what it
costs, proper choices on maintenance strategies cannot be made. Without cost data, managers cannot
control maintenance work to reach targets within budget constraints. New infrastructure projects will
have little chance of recovering the funds they need if good projections of maintenance costs are not
made.

1. Factors which affect maintenance costs

There are many factors which influence and affect the magnitude, breakdown and variability of
maintenance costs. In analysing and comparing costs, these factors must be taken into account for a
meaningful interpretation. A brief list of such factors is given below:

23
• Technical design and construction:

The design of infrastructure will have a significant impact on maintenance cost.

• Age and condition:

The increased age of equipment, or infrastructure components will tend to increase maintenance costs.
Similarly, a system of infrastructure in a deteriorated state will be more expensive to maintain than one
in good condition.

• Scale of output:

The scale of operations can have a large influence on maintenance unit costs. Generally, larger scale
operations, up to a certain point, are more cost-efficient than smaller ones, due to economies of scale.
Similarly, systems operated close to capacity, producing high output, tend to have lower unit costs.
Small systems are dominated by fixed costs such as labour, but with larger ones, the fixed costs are
spread over more output units, reducing unit costs.

• Service effectiveness:

The effectiveness of service provision will have an impact on total and unit costs. For example,
garbage-collection services in City A, which collects 95 per cent of the waste generated (even in
densely populated neighbourhoods), will have a higher overall cost, and a higher cost per ton, than
City B where garbage service personnel only collect waste from neighbourhoods where waste is easy
to reach.

• Maintenance management approach:

The type of maintenance strategy employed will impact the cost. A well-planned preventive
maintenance system will be different in cost than a crisis management approach. Over the long term,
when capital investment and rehabilitation costs are taken into account, the preventive approach will
be cheaper. But in the short term, when only the maintenance budget is considered, the haphazard,
corrective approach will appear cheaper.

• Institutional framework:

The type of institution conducting the maintenance will have an impact. Public entities, be they central
or local-level authorities, tend to have lower salary scales than autonomous parastatal or private
agencies, so the cost of certain tasks may be less. However, public agencies usually have greater
numbers of staff, and lower productivity, so overall maintenance costs could in fact be more.

• Available financial resources:

The available financial resources will in many cases determine the amount of maintenance done, and
thus the total cost. Many agencies do not have a rational budgeting process, and cannot exceed
arbitrary budget limits, therefore constraining maintenance activity. The costs may be more a function
of the funds available rather than the actual maintenance needs to keep infrastructure systems in good
condition.

• Costs and availability of inputs:

The cost of maintenance depends heavily on the cost of inputs such as fuel, electricity and labour.
Controlling for the cost of inputs through the appropriate planning of maintenance and material

24
procurement, which is often rather easy to do, can have a great impact on reducing costs. The
availability of parts, vehicles, and supplies (or the foreign exchange to purchase them) has also a big
impact on costs.

2. Types of cost data and analyses

There are numerous of ways of looking at and presenting cost data for planning, budgeting,
monitoring, and performance evaluation purposes. Although these have been mentioned before, they
are discussed and illustrated below in a systematic fashion.

Annual costs:

The most common type of cost data is the annual cost of maintenance, operations and maintenance or
service delivery. This is the most widely available type of figures, in the form of annual budgets.
However, they are not so useful for monitoring and analysis. Annual costs vary strongly with technical
design, scale, effectiveness, and other factors outlined above. Similarly, to use them for comparison
across cities is interesting, but clouded by the above factors.

Annual costs as a percentage of asset value:

The annual cost in relation to the system asset value is a tempting cost indicator, in that it could
account to some extent for the scale, the technical design, and the age or condition of the infrastructure
system. It is commonly assumed, although perhaps incorrectly, that maintaining an infrastructure
system will require some standard percentage of asset value. The results, in fact, show a wide variation
in operations and maintenance costs in relation to assets value, across cities within a country, and
between countries. There are some data points that are very high (50-60 per cent) which may indicate
that significant rehabilitation expenses were included in the particular operations and maintenance
budget.

Cost breakdown:

Another way of looking at costs is to examine the costs breakdown between labour, materials,
equipment, energy, fuel, contract services, and other cost components. Different types of infrastructure
will have different cost compositions. Thus, this type of analysis can provide useful insights on the
ways for optimizing the relative use of maintenance inputs.

Unit cost:

Unit costs are also a very appealing cost measure. The cost per ton of garbage collected, is a useful and
efficient parameter. Unit costs of service provision are also useful in that they can be compared with
direct cost-recovery tariffs.

Operations and maintenance cost functions:

If significant amounts of annual, or unit, cost data are available, regression techniques can be used to
derive operations and maintenance cost functions. These empirical functions can be useful in planning
and cost projections. Such cost functions usually relate unit or annual costs as a function of output,
often in a linear or power function form.

25
B. Improved strategies for infrastructure maintenance and cost-recovery

1. Overview of local government finance

(a) Current structure

Local authorities in most developing countries raise revenues from both external and internal sources.

 External sources are comprised of transfers from the central or provincial government
(which include grants and shared taxes) and borrowing. Shared taxes are those taxes
collected in the local government jurisdiction by the higher-level government and returned,
all or in part, to the jurisdiction from which they have been collected. Grants may be
earmarked for capital or other types of investments; for special purposes (e.g., salaries of
local-government employees); or may be unencumbered, and therefore used for general
budgetary support. Borrowing by local authorities in developing countries is normally quite
restricted; most countries have not permitted local authorities to borrow for revenue-
generating projects.
 Internal revenue sources normally comprise local taxes, user charges for public services,
license fees and income produced from municipal property and investment. The level of
dependence of local authorities on external vis-à-vis internal revenue varies greatly
between countries and between local authorities within the same country.

(b) Trends in financing capital investment and recurrent operating budgets

Although the current level of borrowing by local authorities is small, this could grow rapidly because
central governments are shifting from grant to loan financing of infrastructure projects. Central
governments simply do not have the financial resources to meet the increasing needs for public
services, especially in the rapidly growing urban areas. Some central governments are establishing, or
revitalizing, loans in order to provide the funds for investments in infrastructure, particularly in urban
areas. In some cases, these loans are supplemented with grants from the central treasury. There is a
trend towards introduction of integrated grant and loan programmes to local authorities, using grants to
compensate for shortfalls in debt-service capacity and stimulate increased resource generation at the
local level.

2. Improving general revenue

Experience dictates that many of the expenses of maintenance will continue to be funded through
general revenue sources. Many of the services provided do not have an output which is easily
measured, and easily charged to a specific user or consumer. These revenues currently support the
bulk of operations in local authorities. Expenditure for maintenance will very likely continue to be
dispersed throughout the operating budgets in line items of many departments and divisions, even with
improvements in financial management.

Fortunately, a strong consensus exists in most countries regarding the basic instruments for general
revenue generation at the local level. Property and business taxes, along with miscellaneous fees and
rents, make up the majority of own-source local revenues wherever local governments are found.
Therefore, successful technologies and procedures can be adapted and exchanged from one city to
another in the area of local revenue administration.

There are several requirements for revenue yield improvements to be obtained.

 First, the enacting legislation must be sound. Taxation methods must be relatively easy to
administer and enforce, produce a favourable yield with moderate administrative expense, and

26
 allow for local discretion in setting rates. The basic approach to these problems includes a review
of existing legislation, an assessment of the impact of legislative constraints, and a projection of
the increased yield with legislative and regulatory reform.
 Secondly, the administrative procedures must be effective. Creating the tax roll and tax
assessment must be uncomplicated, comprehensive and based on objective criteria. Billing must
be timely and accurate, and collection must be free of corruption Computerization of property-tax
systems can lead to large improvements in local revenue generation. It is important that
comprehensive improvement programmes be undertaken on property registration, tax roles,
billing and enforcement procedures, if increased yields are to be obtained.
 Thirdly, appropriate technical assistance programmes are needed. They should take a
"management strengthening" approach combining appropriate training and technical assistance to
local authorities, with in-depth needs assessments to guide structural changes. This is contrasted
with the "structural approach" dictating that structural changes should be made first, mainly in
rewriting tax legislation and civil service regulations to attract better staff to local government
duties. Box 6, shows the results of efforts to improve the financial capacity of towns in Nepal
using a "management strengthening" approach, with dramatic results.

3. Direct cost-recovery improvements

Direct cost recovery can provide the financing mechanism to bring about dramatic improvements in
maintenance of capital assets. Development of effective direct cost-recovery systems or improvements
will involve two basic issues: rate setting, and billing and collections.

Cost recovery often has failed to meet its potential as a local revenue source, due to low rates.
Politically, charging beneficiaries is feasible to the extent that rate structures are perceived as fair and
the services regarded as adequate. Strong support may be needed to charge beneficiaries at levels
reflecting the amount and quality of service usage. Cross-subsidization of groups of beneficiaries
represents a potentially useful but difficult political tool that must be used on a case-by-case basis.
Rate setting and the application of cross-subsidy mechanisms requires the establishment of accurate
systems for assessing costs of capital investment and operations and maintenance, as well as updated
cadastres of users. They should include data on socio-economic aspects and mechanisms to ensure that
the subsidies actually reach the target population.

National policies and instruments for direct subsidy to the demand for infrastructure services are also
alternatives that should be analysed among central and local authorities. The application of this type of
subsidy policy offers the advantage of simplifying rate setting and management requirements by the
local authority, as well as the integration of service subsidies within an overall national policy for
focusing subsidy resources in low-income groups.

The establishment of tariffs depends on accurate knowledge of costs to be incurred. Measuring costs
and levels of services presents major obstacles to agencies unfamiliar with these activities, yet
successful cost-recovery programmes depend on quantifying such data. Historical data, although often
unavailable, are especially important when costing infrastructure maintenance. Much remains to be
done in measuring costs and services, both by governments keeping records of service provision and
by technicians researching into better measuring techniques and instruments.

An important requirement for direct cost recovery is improved billing and collection efficiency. Many
local authorities, particularly small ones, have great difficulty issuing accurate bills in a timely
manner, and then following up to collect the payments and update records. Large water utilities in
developing countries have been able to install computerized systems to automate billing and other
functions, with direct improvements in billing and collection efficiencies in many cases. Smaller towns
or areas with lower revenues that cannot afford such investment could rely on microcomputer

27
technology the continuous lowering costs of which can make them increasingly affordable to local
authorities.

4. Developing innovative finance and cost recovery mechanisms

There are innovative mechanisms for financing maintenance based on local collaborative solutions.
Many approaches involve tapping the resources of the private sector. Merchants, industries and other
commercial enterprises have an interest in infrastructure being in good condition to facilitate their
profit-making activity, and may be willing to invest in public/private partnership arrangements. In
some cases they realize that this may be the only way that they can hold the local authority
accountable for at least some attention to maintenance.

5. Financial management improvements

(a) Accounting

There are at least two types of accounting systems that have a positive impact on maintenance
management: cost accounting and enterprise fund accounting. These techniques can greatly improve
both the management information and financial control aspects of accounting necessary for managing
the costs of services. The achievement of this objective requires a method for understanding the cost
elements and then the service targets those cost elements contribute to. On the basis of such an
understanding, planners and administrators can develop technical and managerial strategies to achieve
the cost effectiveness of service provision.

 Cost accounting does not need to be complex to be effective. However, it is necessary that cost
accounting ties into the general accounting system of the agency or local-authority unit so that
reconciliation of the two is no problem. Automation of accounting operations can prevent multiple
accounting subsystems causing excessive administrative overhead costs and delays.
 Enterprise fund accounting provides a tool to relieve the general fund of burdensome and
complicated accounting and is also capable of managing services with significant cost-recovery
components, thus making the system relevant to maintenance operations. The goal and purpose of
enterprise fund accounting is to account for operations on a businesslike basis: i.e., depreciating
equipment, monitoring cash flows, and presenting a balance sheet that shows whether the
operation pays for itself. Publicly operated services such as roads, water supply and sewerage are
commonly accounted for in this way by local governments in the United States. This type of
accounting is rare in developing countries.

(b) Budgeting

The basic strategy should be to move away from "ad-hoc" budgeting based on a glance at last year's
budget to budget development based on infrastructure condition assessments and systematic multi-year
plans. This process will not be easy to accomplish and will take a long-term commitment to achieve.

There are many ingredients contributing to an effective analytic capability and leading to better
allocation of financial and personnel resources.

 First, the cost data must be reliable.

 Secondly, capable staff trained in cost analysis and internal and external factors that affect finance
are needed. With the first two conditions having been met, automation of analysis and data
management can greatly improve the speed and accuracy of the process.
 Mobilizing the organization to participate creatively in budgeting means, above all, that staff
contribute to decision-making concerning the allocation of resources. Much can be done to
involve technicians, managers, and legislators in drawing up better budgets. Also, budget-

28
 preparation cycles must be carefully planned to ensure the proper timing of input from the various
levels of the agency, and the thoughtful review by analysts and decision-makers. Obstacles
preventing such participation should be removed. It is not rare that local government budgets must
be approved and submitted to the national authorities nine months prior to the fiscal year to which
they apply so that only three months' experience in the current budget year can be used in budget
formulation. Eliminating such administrative obstacles that hinder sound budgeting is important.
 Long-term commitments, such as for infrastructure maintenance, require corresponding budgeting
practices that allow for multi-year capital improvement and maintenance plans, and the carrying-
over of moneys allocated to future years. Projects financed though municipal loan funds are
normally required to make provision for maintenance in the expenditure budgeting and cash-flow
analyses. However, few local governments in developing countries carry out multi-year capital-
investment programming.

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A STRATEGY TO IMPROVE INFRASTRUCTURE MAINTENANCE

Given the complexity and the interwoven nature of maintenance problems, a broad view must be taken
when designing improvement strategies. A purely technical or management approach, taken without
any effort to address financial limitations, can often result in failure. However, a detailed and
comprehensive effort on all fronts may be overwhelming for local or even national governments to
undertake. Realistically, efforts may have to be concentrated on a few critical areas. An overall
operations and maintenance diagnostic assessment procedure will help in prioritizing efforts and
developing such strategies. The following sections present some elements of a strategy that addresses
maintenance problems in a prioritized manner.

A. Planning, programming and budgeting

1. Legislative and policy issues

In order for national and local authorities to make improvements in maintenance, national decision-
makers must give sufficient importance to maintenance issues. Effective and efficient maintenance
must be adopted as a development priority and policy objective in its own right, at national and local
levels.

General sector operations and maintenance policy reviews should be undertaken. The past and current
policies should be documented, and implications of past policy choices studied. Alternative policies
should be identified and evaluated. Then, a new set of comprehensive maintenance policies should be
adopted. The new policies should address issues such as institutional staffing; design; planning;
community participation; contracting; finance and accountability. All institutional responsibilities
should be clear and concise. These reviews should not be conducted in a vacuum. Policy review
committees must solicit the views of national and local government officials, the private sector, and
community groups.

New policies should be clearly communicated to all local authorities and the citizens at large. Policy
reform may be accompanied by tax or tariff changes the rationale of which should be fully clear.

In parallel with the above policy reviews, legislative reviews should be undertaken. There is a need to
review all existing legal instruments which are not in conformity with an overall programme aimed at
revitalizing the maintenance of infrastructure. Legislative reviews should focus particularly on
institutional, personnel, contracting, and finance issues.

2. Institutional frameworks

Institutional issues should be investigated and problems addressed. An overall institutional review
could be conducted in association with the policy and legislative review noted above. A key objective
of such an exercise should be;

 To remove duplications or gaps in jurisdiction between institutions, and

 Define their institutional responsibilities so that there is no ambiguity. Clear direction must be
established at the national level and then implemented at the local level.

An objective of improving the institutional framework is to promote institutional autonomy and

decentralization to the maximum extent practicable. Operations and maintenance institutions which
operate close to the populations they serve, without unnecessary interference and regulation, are likely
to be the most effective and efficient and certainly are most accountable to the people they serve.
Financial autonomy will foster local cost recovery by whatever means possible, forcing institutions to
adapt themselves to the demand for their services.

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The existing institutional capacity for the maintenance of capital assets can be improved by optimizing
the use of resources in related institutions. A carefully prepared management plan for the maintenance
of infrastructure can ensure that additional resources, labour, vehicles or equipment are released
temporarily from other agencies for use in specified projects or tasks.

An important objective of an improved institutional framework is to establish clear lines of

communication between those who design infrastructure, those who operate or use it, and those
responsible for its maintenance. In addition, the framework should promote clear lines of
communication and coordination across related sectors, and between national and local institutions.

Internal organization and management must be based on prompt attention to all matters, clear roles
and responsibilities for all sections and individuals, and regular communication and coordination. The
basic tool to be applied in this regard is the organization chart, with lines of supervisory responsibility
and with job descriptions for each function. There are many types of organizational frameworks, with
wide differences but, in general maintenance should have a direct link to top management and must
have its own manager, budget and resources.

3. Staffing, training and incentives

Agencies should begin to address staffing problems with a review of the current staff, and personnel
management and policies. Such a review would best be conducted as a part of an overall maintenance
planning and programming exercise. Eventually, in concert with the results of the planning exercise, a
revised organizational chart should be developed. All necessary maintenance functions should be
planned for in the organizational diagram, including

 overall management,
 personnel administration and training,
 operations staff,
 maintenance management,
 materials procurement and administration,
 accounting,
 record-keeping and mapping,
 workshops and maintenance staff.

Job descriptions should be developed for each position or revised as necessary. The implementation of
such personnel revisions should be done in coordination with on-going training programmes.

Regular, on-going training is an essential tool for enhancing maintenance directly through improved
knowledge, skills and practices, and also indirectly through higher staff morale. Programmes should
be established to train staff at all levels, from the maintenance manager to the craftsperson. Training
on both technical and managerial matters is important. As the current staffing policy is reviewed, a
training needs assessment should be made based on

 current staff and skills and projected needs.

 training needs can also be identified through performance evaluation. If a particular task
keeps taking longer than expected, this is a sign that the involved personnel may need more
training for this task.

A variety of training mechanisms can be used depending on the target group.

 For the technical aspects of maintenance procedures in-country blackboard and hands-on
sessions are the most effective approach. The courses have to be customized to the particular
equipment or infrastructure maintained.

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  Management training can be conducted at specialized local institutes, if they exist.
 If local management training capability is absent or weak, some local instruction can be done
based on courses developed in other areas. Many sectoral agencies are creating training
institutions on a national level, which can be employed by local agency staff.

Local authorities should try to find ways to build new staff incentives into the work place to improve
morale and increase productivity.

 Financial incentives are the most effective; however, they are impossible in many local
governments.
 Other forms may be necessary such as early release from work when a specific task is done,
or awards to individuals or units such as the "employee of the month".

4. Technical design

In countries where a government agency has the responsibility for design or design supervision of
capital projects or, better still, where design functions are linked to maintenance responsibilities, it
should be possible to introduce a series of guidelines for ensuring that new capital-investment projects
are planned taking into account operations and maintenance considerations. The design process should
include a full study of the maintenance requirements for alternative designs including;

 Task definition;
 Task quantity and quality standards; and
 Estimates of the human, material, management, and financial resources necessary to perform
those tasks.

Life-cycle costing can be one of several tools used to assess these alternatives.

Designs must be appropriate to the human, material, management and financial resources and
capabilities of the intended users and those who will conduct and finance maintenance. Consideration
should be given to alternative designs which are less expensive to construct, and less expensive and
complex to operate and maintain. Standardization of equipment and infrastructure components should
also be promoted, but may in some cases conflict with designs suited to local conditions, especially in
a large country with significant physical and climate variations. A balance must be struck between
appropriateness and standardization.

5. Maintenance planning, programming, budgeting and management

The initial step in planning maintenance should be to conduct a detailed inventory and condition
assessment of all assets, fixed or mobile. The purpose of such an inventory is to identify and collect
technical information on each asset to be maintained. The purpose of a condition assessment is to
define general as well as specific data on maintenance, repair and rehabilitation needs. Inventories also
form the database upon which regular record-keeping is based. Along with the inventory of assets an
inventory of available human, material and financial resources should be conducted as an input to the
plan.

Two types of maintenance standards must be developed: quality standards and quantity standards.

 Quality standards outline the tasks that must be performed and their frequency, in essence
defining the quality of maintenance service that will be performed.
 Quantity standards define the resources required to implement each task. That is, they define
a target amount of labour, materials and equipment that should be used.

32
These standards become a key tool in management of maintenance staff.

The inventory of assets and maintenance standards information can be combined to produce an initial
estimate of resource requirements. During the actual budgeting process, the following procedure is
used.

 Various maintenance strategies should be considered, and ways to reduce costs investigated.
 The resource requirements in each sector must be combined in an overall preliminary budget, and
compared to available resources.
 Maintenance managers should work with local and national decision-makers to try to secure the
full needs-based budget.
 Once the budget is final, the last step in the planning process is to develop a precise schedule of
activities with simple worksheets for monitoring actual accomplishment. The same process can be
used to plan and budget for periodic maintenance over a multi-year timeframe.
 Efforts should be made to programme rehabilitation tasks and capital improvements into the same
framework. The multi-year planning process requires careful assessment of the trade-offs between
routine maintenance, periodic maintenance, rehabilitation, and capital investment.

Once a maintenance programme has been developed, several key management tools can be applied to
assure the full implementation of the plan. These include:

(a) Work order system:

These are organized mechanisms whereby a manager can direct his staff to carry out an established
preventive maintenance plan and to respond effectively to corrective maintenance needs as they
arise. These systems consist of job cards or work orders issued to the staff to conduct work, which
are filled out by the maintenance worker(s) once a task is complete. Work orders also serve other
important functions relating to monitoring, scheduling, record-keeping, and accounting.

(b) Record-keeping:

This is a system to store descriptive technical information and historical maintenance data on all
hardware being maintained. Such records are extremely useful in performing maintenance work,
planning future work, analyzing equipment efficiency, planning an inventory of spare parts and
materials, and also for new infrastructure system design. Records which are outdated or incomplete
can be misleading so they must be kept up-to-date.

(c) Materials management:

Materials management consists of two inter-related components: procurement and inventory

controls. A paper system comprises of a series of ledger cards, one for each item; requisition and
credit forms for tracking materials entering and leaving stores; and a means of ordering more
materials when a "minimum stock" is reached, such as a travelling order card system. An adequate
system of materials management ensures that necessary parts, supplies, or materials are readily
available when needed.

(d) Monitoring, evaluating and reporting:

These are systems to review what has been accomplished, what needs to be done, and what the
effectiveness and efficiency of current activities are. They are used to report to upper-level
management on progress and problems. They are key activities and systems to ensure that work
proceeds according to plan and reaches service delivery targets.

33
Many of the above management procedures and tools lend themselves to computerization, in particular
work order systems and materials management. Integrated software packages are available in the
market which combine all these functions on one computer system, giving managers a powerful
management information system.

6. Community participation

Community participation can be a powerful force in the maintenance of infrastructure. Community

involvement can take many forms, from community consultation in the planning and design of
infrastructure, to voluntary beneficiary participation in construction and maintenance activities, to full
community self-help efforts where they initiate and maintain infrastructure projects.

7. Maintenance contracting and privatization

In several countries, the contracting or privatization of the operations and maintenance of public assets
is already practiced, especially in services such as water supply and solid-waste collection and
disposal. Contracting out offers many advantages.

 First of all, it can lower costs. Private sector operators are often more efficient and will have
competed to win the contract, so favorable terms for the local authority can be developed. Special
contracts can be developed to provide spot as-needed labour to maintenance departments to
handle seasonal workload variations or emergency repairs.
 Contracting out can reduce the staff supervision required of maintenance agencies, which are
often one of their weak points.

However, contracting can lead to problems if not done carefully.

 Contracts must be well specified to ensure that the correct services are performed in the way the
authority wants.
 Also, local authorities will have to shift from service provision to contract monitoring, a skill in
which they may have no experience. With support from national governments, these potential
problems can usually be addressed by local authorities.

B. Finance and cost recovery

1. Improved revenue generation and cost recovery

If local authorities are to be able to finance enhanced maintenance, improvements to general revenue
generation and cost recovery will be needed. There are several mechanisms that can be applied to
improve revenue yield and cost recovery.

a) The enacting of sound legislation:

Taxation methods must be

 Relatively easy to administer and enforce;

 Produce a favorable yield with moderate administrative expense; and
 Allow for local discretion in setting rates.

The basic approach to these problems includes a review of existing legislation, an assessment of the
impact of legislative problems, and a projection of the increased yield with legislative and regulatory
reform.

34
b) The establishment of effective administrative procedures:

 Creating the tax roll and tax assessment must be uncomplicated, comprehensive and based on
objective criteria.
 Billing must be timely and accurate, and collection must be free of corruption.
 Computerization of property tax systems can lead to large improvements in local revenue
generation.

It is important that comprehensive improvement programmes be undertaken to improve property

registration, information systems, billing, rate collection and enforcement procedures.

c) The implementation of appropriate technical assistance programmes:

Such programmes should take a "management strengthening" approach combining appropriate training
and technical assistance to local authorities with in-depth needs assessments to guide structural
changes. This is contrasted with the "structural approach" dictating that structural changes should be
made first, mainly in rewriting tax legislation and rewriting civil service regulations.

d) Rate setting:

This is one special element with direct impact on cost recovery. Cost recovery often fails to meet its
potential as a local revenue source due to low rates, partly for political reasons. Strong support may be
needed to charge beneficiaries at levels reflecting the amount and quality of service usage and the
marginal cost of service provision and maintenance. Cross-subsidization of groups of beneficiaries
represents a potentially useful, but difficult political tool, that must be used on a case-by-case basis.
Rate setting and the application of cross-subsidy mechanisms requires the establishment of accurate
systems for assessing capital investment and operations and maintenance costs. They will also require
updated cadastres, including socio-economic data, and control mechanisms to ensure that subsidies
reach the target population. National policies and instruments for direct subsidy to the demand for
infrastructure services are alternatives that should be analysed among national and local authorities.
The application of this type of subsidy policy offers the advantage of simplifying rate setting and
management requirements by the local authority, as well as of integrating service subsidy into an
overall national policy for focusing social resources (subsidies) on the low-income groups.

e) Application of innovative strategies for financing maintenance:

Other innovative strategies should also be explored and developed. For example, most revenue-
generating authorities in developing countries have vast assets (e.g., buildings, land, machinery, and
know-how) under their control but, for one reason or another, they are either ignorant of their high
value or simply fall short of innovative asset utilization and management techniques. Thus, denying
themselves potential revenue which could be directed to finance maintenance activities.

Certain countries have also applied, with varying success, a policy of inter-sectoral transfers of
revenues to finance infrastructure maintenance. Such policies should be analysed with the utmost care
due to the distortion they may cause on prices and fiscal management. However, if their application is
still considered, the earmarking of funds for maintenance from other sources can only be effective if
four basic conditions are fulfilled.

 First, there should be no ambiguity in the governmental instructions that define the earmarking of
funds for maintenance.
 Secondly, the governmental instructions should be backed with adequate legislation.
 Thirdly, there should be procedures for an independent body to monitor the technical aspects of
the fund-operation as well as a system for auditing the fund.

35
 Finally, the measures should be consistent with a coherent national macro-economic and fiscal
policy.

2. Improved financial management, performance and accountability

An important complement to enhancing revenue generation is the achievement of improved financial

management, mainly through the introduction of sound accounting and budgeting practices.

Accounting systems, such as cost accounting and enterprise fund accounting, provide essential
information inputs for maintenance management.

 Cost accounting can give precise information on specific activities or particular assets or facilities,
to assist managers in the planning and management processes.
 On the other hand, the goal and purpose of enterprise fund accounting is to account for operations
and maintenance on a business-like basis, i.e., depreciating equipment, monitoring cash flows, and
presenting a balance sheet that shows whether the operation pays for itself.

For budgeting systems, a more rational needs-based budget process needs to be fostered. It is also
important to review the practices whereby funds allocated during a financial year have to be retired by
the end of the budget year, regardless of any pending maintenance work or any commitments. Given
the unpredictable nature of certain maintenance/repair needs, there should always be some
contingency funds. Systems of budgeting and accounting in which yearly allocations of funds are
allowed to accumulate in a separate maintenance account, so that emergency or unexpected
maintenance needs are promptly taken care of, can prove successful.

Mechanisms have to be introduced for monitoring the financial performance of local authorities.
Financial data should be continuously updated (e.g., every six months) so that changes in performance
can be quickly identified. In this regard, local authorities have to develop monitoring systems based on
utility financial and technical performance indicators suitable to local conditions.

With more careful financial and technical monitoring, local authorities become more accountable to
the central government in terms of efficiency and effectiveness. However, additional efforts may be
needed to make local authorities accountable directly to the communities they serve. This may require
political changes on a national and local scale. Increased use of direct cost recovery, or increased
efficiency in the collection of general revenue, may raise consumer interest in the use of funds.
Implementation of cost accounting will allow the actual expenditures for specific activities to be
traced. Increased use of contracting and privatization will help specify costs, and bring expenditure
and cost efficiency more out into the open.

C. The role of governments in improving infrastructure maintenance

1. Legislative and policy reforms

National governments can execute policy review programmes to identify policy issues and make clear
policy statements to guide national, regional and local authorities, by:

 Assembling multidisciplinary policy study groups for different sectors to assess current policies,
identify existing problems, and propose alternative policy options.
 Develop national-level policies which define institutional responsibilities, and give clear direction
for improvements on institutional, human-resource development, planning and management,
finance, technical, and community participation issues. They should also promote the
decentralization of responsibilities and resource management to the local level.

36
 Establishing a national task force or designating an appropriate agency to review all legislative
instruments connected with infrastructure maintenance, with a view to deleting or reformulating
inappropriate laws and promoting new legislation so as to achieve desired maintenance standards;

2. Institution strengthening

National governments can provide the appropriate institutional framework for improvements in
infrastructure maintenance by:

 Upgrading the status of agencies concerned with maintenance and streamlining procedures for
effective coordination between design, construction, operation, use and maintenance of
infrastructure.
 Decentralizing responsibilities for the maintenance of infrastructure and promoting efficiency in
performance through a series of incentive schemes.
 Promoting institutional models emphasizing more autonomy in personnel, finance, and tariff
issues.
Lifting policy or legislative constraints on, and actively promoting the participation of the private
sector and community organizations in maintenance activities.

3. Human-resources development

National governments can promote the reproduction and permanence of local skills required to
improve the maintenance of infrastructure by:

 Adopting more progressive personnel management policies which reward productivity through
financial and other incentives.
 Incorporating aspects of infrastructure maintenance in curricula of institutions training
professionals, technicians and artisans in construction-related disciplines.
 Establishing in-service or on-the-job training to schemes for all grades of personnel in existing
maintenance units.
 Introducing short courses for specific skills in selected local institutions, for both public officials
and the private sector.

4. Planning and management

National governments can work with local authorities to develop improved procedures for planning
and management maintenance by:

 Incorporating maintenance in national development planning and according the sector the priority
it deserves.
 Emphasizing the importance of inter-sectoral planning within the context of overall urban service
delivery.
 Assisting those local authorities with limited institutional or technical capacity in the development
of asset inventories, condition assessments, maintenance standards, scheduling, and multi-year
planning and budgeting.

5. Community participation

National governments can supplement their direct support to the maintenance sector through
mobilizing community participation by assisting local authorities, non-governmental organizations
(NGOs) and community organizations to:

37
 Involve local community associations in the planning of infrastructure, so as to target
improvements directly at perceived needs and at the appropriate level of service. Such involvement
will promote greater community interest and participation in maintenance activities.
 Disseminate information on the significance of maintenance and self-help methods of
maintenance.
 Organize fund-raising activities at the local level targeted for specific maintenance operations.

6. Technical issues

National governments can minimize design, equipment and materials problems by:

 Promoting the review of design standards and practices, emphasizing technologies appropriate to
maintenance capabilities and financial resources.
 Provide incentives for improved-quality local manufacture of materials and equipment.
 Ensure the availability of materials and equipment for maintenance through the promotion of local
manufacture, or facilitating the access to externally procured products when necessary. Promoting
the standardization of equipment and installations based on the different requirements imposed by
local conditions, and capital and maintenance cost performance.

7. Finance and cost recovery

National governments can minimize the problems of inadequate funds for maintenance by:

 Improving regulations on budgetary procedures to ensure that funds are allocated to specific
accounts for infrastructure maintenance on a cumulative basis.
 Improving regulations on cost accounting so that the actual cost of specific maintenance activities
can be reviewed.
 Removing policy and legislative barriers to alternative cost-recovery measures where they cause
financial constraints.
 Undertaking periodic reviews of user-charges and levies related to infrastructure.
 Establishing coherent national social policies which consider the redistribution of resources to
finance the maintenance of infrastructure for those groups which do not have the financial capacity
to do so.

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