Table 6: Road Upgrading Costs: Road Costs Knowledge System (ROCKS) - 2018 Update

|Work Type|N|Length (km)|Weight|Cost (M$’15)|Cost/km|
|---|---|---|---|---|---|
|_Continental Africa_||||||
|Upgrading|28|103.5|2898|49.73|0.513|
|Reconstruction|27|33.0|891|20.20|0.116|
|Asphalt Mix Resurfacing|14|133.8|1874|16.93|0.143|
|Strengthening|11|110.0|1210|42.97|0.316|
|Weighted Average||104.0||35.77|0.326|
|_All Low and Lower-Middle _|_Inco_|_me Countries_||||
|Upgrading|68|61.8|4199|20.63|0.320|
|Reconstruction|53|73.0|3869|20.20|0.162|
|Asphalt Mix Resurfacing|35|143.9|5036|15.50|0.090|
|Strengthening|26|92.0|2392|20.89|0.316|
|Weighted Average||95.9||18.90|0.205|

_Notes:_ Statistics are aggregated across projects using the median. The ’Weight’ column is the number of projects (N) times the median length (Length). This is used to compute a weighted average across different work types. Costs are in millions of 2015 USD. The raw costs in current USD were deflated at their project end date using the US GDP deflator with base year 2015.

These estimates are consistent with African Development Bank (2014), who report an average cost of 180,300 USD’06/lane-km for a category called ’Rehabilitation,’ yielding 418,500 USD’15/km for 2-lane highways. Their 1st and 3rd quartile estimates translate to 254,900 and 673,100 USD’15/km, respectively. As mentioned earlier, African Development Bank (2014) lump together ’Upgrading’ with new construction at a median price of 528,800 USD’15/km. Their estimate is thus between the ’Upgrading’ estimate of $ 513K in Table 6 and new construction at $ 611K from Table 5.

Upgrading a link to allow speeds of 100km/h should require different types of road work depending on the existing condition of the road. It is unrealistic to assume that this is a continuous function of the distance of travel speed from 100km/h. For example, two roads with travel speeds of 85 and 90km/h likely both require a full asphalt resurfacing to bring them to 100km/h. Since the distribution of speeds in Figure 19 is trimodal, I propose the following three categories: (1) roads with a travel speed below 60km/h require a full ’Upgrade’ at an average cost of $ 513K/km; (2) roads with travel speeds of 60-79km/h may require mixed works at an average cost of $ 326K/km; (3) roads with travel speeds of 80km/h and higher require an ’Asphalt Mix Resurfacing’ at $ 143K/km on average. To introduce heterogeneity in these cost estimates, I use Eq. 6 and modify the intercept such that the median (across all routes, regardless of their upgrade type) is close to the respective category medians: For category (1), the intercept is ln(101,600), for category (2) it is ln(64,600), and for category (3), it is ln(28,400). In addition, I clip estimates at the 2.5th and 97.5th percentile to guard against outliers, such that, e.g., ’Asphalt Mix Resurfacing’ costs remain between $ 94K/km and $ 206K/km. Figure 23 reports the classification and estimated unit costs.

The entire central-African network and trans-Saharan connections via Mali and Niger, as well as most of the network around the horn of Africa, is classified as requiring a full upgrade, at costs around $ 400K/km due to mostly flat terrain and small population density. The total cost of upgrading the entire 315K km transport network is thus estimated at $ 106B (in 2015 USD), comprising $ 57.8B full road upgrades, $ 35.6B mixed works, and $ 12.3B mixed asphalt resurfacing.

# **5.6 Cost-Benefit Analysis: Road Upgrading**

Comparing this cost to the total MA gain of 42% or $ 701B/min implies a return of $ 6.6/min/ $ . With border frictions, the MA gain is reduced to 27% or between 214 and 253 billion USD/min in the two scenarios, implying a 2/2.4 $ /min/ $ return in the cumulative/simple frictions scenarios, respectively. Thus, road upgrades yield significantly higher average returns than fresh construction.

It remains to gauge the returns to upgrading individual links. Figure A11 shows estimates following the same schema as Figure 18, signifying that upgrading links in populated areas and critical trans-continental connections yields significant returns. The consensus package again 27