Advancing Connectivity and Logistics in Uruguay: Rehabilitating and Maintaining Highway Infrastructure and Improving Road Sector Management

Challenge

Uruguay's national highway network suffered from tornadoes, heavy rainfall, droughts, and heat waves - just some of the violent weather events that have hit Uruguay in recent years. These are not isolated phenomena. Data from the Uruguayan government show a significant increase in rainfall since 2001. These events, combined with years of underinvestment, led to deteriorating road infrastructure: barely 35 percent of the 8,900 kilometers of Uruguay's national roads were in good or very good condition in 2012. In a country that relies heavily on roads for its exports and internal connectivity, the poor shape of Uruguay's roads drove up logistics costs.

Approach

The Uruguay Road Rehabilitation and Maintenance Program (Program) was designed to address these challenges holistically. The chosen lending instrument, the first Program-for-Results (PforR) in Latin America and the Caribbean, focused on disbursement against results achieved rather than on inputs. Disbursement indicators covered several key program dimensions, including the number of kilometers (km) of highway rehabilitated, the number of kilometers managed by performance-based contracts, and the number fitted with traffic safety improvements, as well as mapping national network areas prone to flooding to improve roads' climate resilience and improved quality control for all roadworks.

Results

Between 2012 and 2019, the Uruguay Road Rehabilitation and Maintenance Program achieved substantial results.

• Surpassing its target of 1,414 km, Uruguay's Ministry of Transport and Public Works (MTOP) rehabilitated 1,854 km of highways for an overall average of 250 km/year during the program. (The previous year's average was 120 km/year.)
• In 2019, cost-effective performance-based road maintenance contracts covered 3,637 km of highways, surpassing the year's target of 3,000 km.
• Surpassing the target of 263 km, 310 km of highways benefitted from safety improvements.

In addition, the program has made substantial progress in enhancing road sector management through institutional strengthening within the sector:

• MTOP's planning capacity has been strengthened, particularly through the Montevideo seaport planning study and national freight transport modeling.
• Successful engineering and technical efforts included recategorizing national roadways to define differentiated levels of road service. A manual of standardized technical solutions by pavement type was adopted to attain further cost efficiency. Similarly, a roadworks supervision manual contributed to improving the efficiency of roadwork field supervision.
• Environmental compliance was strongly reinforced by adopting the Roadworks Environmental Manual, and roadworks environmental auditing was streamlined and environmental data management improved.
• MTOP adopted the Manual of Expropriation Procedures and Social Management and established the Citizen Attention Center (CAC), both of which helped strengthen social functions.
• Road safety audits have become standard practice. MTOP set up a road safety management tool to prioritize and monitor road safety investments.
• On climate resilience, MTOP mapped areas along Uruguay's national road network prone to climate and developed a methodology to assess bridge resilience to climate risks. The mapping allows public policy decision makers to develop strategic plans for the medium and long term on how and where to invest, how to avoid unnecessary expenses, and how to develop infrastructure resistant to climate impacts. These improvements generate concrete benefits: globally, as estimated in the 2019 World Bank report Lifelines: The Resilient Infrastructure Opportunity, a return of US$4 is expected for every dollar invested in resilience.

Bank Group Contribution

The World Bank, through the International Bank for Reconstruction and Development (IBRD), supported the Uruguay Road Rehabilitation and Maintenance Program through two loans: the first, for US$66 million, was approved in 2012, and an additional loan for US$70 million was approved in 2016 to scale up program results.

Partners

The Uruguay Roads Rehabilitation and Maintenance Program was co-implemented by MTOP and the National Roads Corporation (CVU). IBRD loans were complemented by US$345 million in co-financing from several international financing institutions, including the Inter-American Development Bank (IDB), the Development Bank of Latin American (Corporação Andina de Fomento, CAF), the Fund for the Development of the Plate River Basin (FONPLATA), and Fund for the Structural Convergence of Mercosur (FOCEM).

Beneficiaries

Program beneficiaries include the thousands of people who use the national highways on a daily basis to go to work, school, markets, or social services facilities. Highway improvements have also benefitted trade and exports, particularly agricultural exports, by providing more reliable roads and reducing logistics costs. In 2019, 247 firms exported almost US$7 billion in agricultural products, almost exclusively using road-based logistics.

Moving Forward

The program, made possible by a considerable increase of funding to the road sector, substantially improved road conditions in Uruguay. Moving forward, the main challenge will be to sustain an adequate level of funding to the road sector to maintain quality, provide needed development, and scale up road safety improvements. In a context of limited fiscal resources, the expansion of user-pay tolling for highways should be explored.