A Review of Highway Agencies in the South Asia Region

A Review of Highway Agencies in the South Asia Region
length and gained complexity. Larger networks call for a different approach in planning,
operation and management. If the quantum leap in highway infrastructure investment is
realized, these networks will further increase in size and complexity, and thus managing
these networks will require new approaches that are very different from those that are in
use today in most highway agencies in South Asia.
2.8.2 Capacity to Supply Infrastructure
Supply Side Capacity to Meet Demand
If extensive construction and maintenance plans are to become a reality, the industry
needs to be able to deliver the scope of work associated with such plans. In an earlier
study, the World Bank15 identified a number of constraints in the industry that need to be
addressed. Although this study focused on India, the other countries in South Asia face
similar challenges. These constraints include a fragmented industry where small firms (small
relative to the size of firms outside India) dominate. These small companies lack the scale
to handle large projects which increases the transaction costs associated with managing
contracts. Moreover, the industry is relatively labor intensive; to increase capacity and
quality, higher levels of mechanization or capital investment are required. Highway agencies
need to take such constraints into account as they limit their capacity to realize ambitious
expansion plans.
15 Indian Road Construction Industry Study, World Bank (2008).
Developing Technological Capability
The World Bank in 2008 stated that:
Construction industries have improved in recent years, adopting more modern
technologies and better equipment, but their scale is still small in relation to the
proposed programs. The South Asian construction sector may not have the capacity
to meet the rapidly rising demand, and it will take time for the capacity to develop.
Across South Asia, gang labor is the common standard. In addition, training facilities for
semi-skilled workers are inadequate. To construct and manage a modern and high-quality
network, the industry needs to improve its technological capability, and invest in knowledge
development along with investment in infrastructure.
Support for Private Sector Development
There is a rising trend to outsource tasks that were traditionally performed in-house by
highway agencies. This outsourcing, however, poses a new challenge: the private sector
must have the capacity to absorb this work and execute it well. The approach of blindly
outsourcing work to the private sector, without the requisite support and attention to
developing its capacity, may be counterproductive. Thus, highway agencies face the
challenge of developing the capabilities and capacity of the private sector in a manner that
will enable the private sector to face future challenges and support the highway agencies in
achieving their goals.
Attracting and Retaining Qualified Personnel
Highway agencies face significant challenges in their human resource management. The
survey and interviews indicated that the majority of staff was made up of engineers and
there was a significant number of vacancies. The limited promotion opportunities act as
a deterrent for talented professionals to join the highway agencies. In view of the need to
improve performance, highway agencies will need to increasingly attract qualified staff.
The desired qualifications and competencies of highway agencies’ staff will also have
to change as the agencies increasingly manage private contractors instead of actually
executing the works: managerial and financial skills will be needed in addition to
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