The Road That Refuses to Die: Ending the Build-Collaspe-Rebuild Cycle

By Seun Sylvester | The Turnaround Papers | August 4, 2026

Every Nigerian knows this road. It was commissioned with fanfare eighteen months ago. A governor cut a ribbon. There were photographs, a brass band, promises about how this road would transform the community. Today it is craters and dust, and the same community that cheered its opening is now cursing its collapse.

We tend to explain this with the vocabulary of corruption: contractors who used substandard materials, officials who inflated the budget and pocketed the difference. That explanation is often true. But it is incomplete, and its incompleteness is why the cycle keeps repeating even in states genuinely trying to do better.

The deeper problem is structural. Under Nigeria’s standard road contract, the contractor is paid to build a road, not to keep it working. Once construction is certified complete, the contractor is paid in full and walks away. What happens to that road in month eighteen is, contractually, someone else’s problem, usually nobody’s problem, until it collapses badly enough to justify an entirely new contract, a new certification, a new payment, and a new ribbon.

This paper proposes replacing that model with one used successfully across more than seventy countries for over three decades, but almost nowhere in Nigerian state government: paying contractors for years of working road, not for a moment of completed construction.

The Mechanism: Output- and Performance-Based Road Contracts

The World Bank calls it OPRC – Output- and Performance-Based Road Contracts. New Zealand and Australia call it Performance-Specified Maintenance Contracting. Argentina and Brazil call it CREMA. The name varies; the mechanism does not.

Under a standard contract, government specifies inputs: this thickness of asphalt, this quantity of stone base, this method of compaction. The contractor is paid against a bill of quantities regardless of how the road actually performs afterward. Under a performance-based contract, government specifies outputs: no pothole may exceed a certain depth, ride quality must stay above a defined threshold, drainage must function, signage must be intact and payment is a fixed sum per kilometre, per period, contingent on the road meeting those standards throughout a contract term that typically runs five to ten years, not until construction is certified complete.

This single change in what government pays for rearranges every incentive in the system. The contractor who builds cheaply now inherits the consequence of building cheaply, a pothole is his liability, not a future government’s emergency budget line. The contractor who invests in genuine quality up front spends less on repair later and keeps more of the fixed periodic payment as margin. Good construction stops being a moral aspiration and becomes the profit-maximising choice.

Where This Has Actually Worked

This is not an untested theory. It is one of the most rigorously evaluated reforms in infrastructure economics, with three decades of results across very different economies.

Chad ran an early and instructive pilot: in 2001, a performance-based contract covering 441 kilometres of unpaved road, about 7% of the national network, paid a contractor a lump sum per kilometre maintained to defined standards. The roads have consistently met or exceeded those standards since.

Argentina, one of the earliest and largest adopters, saved close to 30% in additional capital expenditure on rehabilitation by shifting to performance contracts, because roads maintained continuously to standard never fall far enough to require expensive reconstruction.

Brazil’s CREMA programme is the most widely cited in the literature, recorded maintenance costs some 34% lower than conventional contracts, precisely because contractors were incentivised toward regular preventive work rather than waiting for roads to fail and then submitting a remedial bill.

Across the wider evidence base, the World Bank’s own transport notes record cost savings ranging from 10% to over 40% relative to traditional contracting, alongside a documented reduction in the in-house government workforce needed to supervise maintenance, greater budget predictability because payments are fixed and multi-year, and measurably higher road-user satisfaction.

And Nigeria has already tried it successfully at pilot scale. Between 2011 and 2016, Kaduna State ran four OPRC pilot contracts, spending roughly ₦6.75 billion across a combined 24-month construction period followed by 36 months of contractually mandated maintenance, with financial penalties for any failure to meet standard. The documented result: the project opened up new communities, created new markets, allowed farmers to move produce that previously rotted for lack of access, and improved access to healthcare and education along the corridor. A serving civil engineer on the project later wrote it up specifically to encourage other Nigerian states to adopt the model.

In other words, the closest thing to a controlled experiment for this exact reform, in this exact country, already ran and it worked. It simply never scaled beyond four pilot contracts in one state. This paper proposes taking Kaduna’s proof of concept and turning it into standard practice.

Why It Has Not Spread

If the evidence is this strong, why does Nigeria still build roads the old way almost everywhere?

First, it is politically inconvenient in the short run. A traditional contract lets an administration announce a large capital number, spend it, and hold a commissioning ceremony inside one budget cycle. A performance contract distributes payment over five to ten years, less dramatic in any single year, even though it is cheaper and better over the full period. Politicians undervalue the second term’s road because they may not be the one cutting the ribbon on its continued survival.

Second, it requires a different kind of contract-writing capacity. Specifying outputs and performance thresholds, and building genuine penalty and payment-withholding mechanisms into a contract, is more technically demanding than specifying a bill of quantities, though this is now a well-documented, replicable skill with sample bidding documents the World Bank has published and refined for over two decades.

Third, and let us be honest about this, because a serious paper must be, the traditional model has beneficiaries who prefer it exactly as broken as it is. A contract that must be re-awarded every eighteen months, at full price, with no penalty for the previous failure, is more lucrative to a poorly performing contractor and more useful to an official extracting rents from repeated procurement than a ten-year contract that pays only for roads that actually work. This paper does not pretend performance contracting is merely a technical upgrade. It is also a governance reform that removes a repeat-procurement racket which is precisely why it is worth doing, and precisely why it will attract quiet resistance from those who currently benefit from the collapse-and-rebuild cycle.

The Proposal: The Ogun Road Performance Compact

This proposal has two tracks. The first, the state’s general road network runs on the government-paid performance contract described below. The second, a small number of the busiest commercial corridors runs on the toll concession model described in the following section. Together they cover both the routine feeder roads that keep rural Ogun connected and the flagship arteries that carry the state’s industrial economy.

1. Convert New and Rehabilitated Roads to Output-Based Contracts by Default. Every new road construction or major rehabilitation contract above a defined threshold is procured as an OPRC: a single contractor is responsible for design or rehabilitation, initial works, and a mandatory multi-year performance-maintenance period, commonly five to ten years internationally with defined, measurable standards: maximum pothole depth and count, ride roughness index, drainage functionality, signage and markings intact, verified by scheduled and surprise inspection.

2. Pay Periodically Against Standards Met, Not Against Construction Certified. Replace the current model of large upfront payment on completion with a fixed periodic payment (quarterly or biannual) that is reduced or withheld entirely for any period in which the road falls below the contracted standard. This is the mechanism that does the actual work, it is what converts “build it and disappear” into “keep it working or stop getting paid.”

3. Start with a Pilot Corridor, Learn, Then Scale. Following Kaduna’s own model, begin with three to five defined corridors, prioritising the rural feeder roads that farmers depend on to reach markets, where the economic cost of collapse is highest and most immediately felt. Use the pilot period to build in-house contract-management capacity and refine standards before converting the wider road-capital budget.

4. Publish the Standards and the Inspection Results. Every contracted road’s current performance status, met standard, below standard, payment withheld is published on a state dashboard, the same accountability principle running through this entire series. A road under an underperforming contractor becomes visible before it becomes a crater, and the public can see exactly which firm is being paid and which is not.

5. Build a Genuine Performance Bond and Blacklist Mechanism. Contractors post a performance bond forfeited on serious or repeated failure, and firms that fail to meet standard are barred from future state contracts for a defined period. This closes the loophole where a failed contractor simply re-bids under a new company name for the next repair contract.

A Second Track for the Busiest Roads: Financing Through Users, Not the Treasury

Everything above assumes government continues paying the contractor, on a periodic basis, from the state budget. That is the right model for most of a state’s road network. But it is not the only model available, and for a small number of Ogun’s highest-traffic corridors, a stronger option exists: one that removes the payment obligation from the state budget almost entirely.

Under a toll concession, sometimes called Design-Build-Finance-Operate-Toll, the performance logic is identical to everything described above, but the payer changes. The contractor finances the construction himself, typically with bank or development-finance backing, and recovers his investment and profit by collecting tolls directly from road users over a long concession period, commonly twenty to thirty years, after which the asset transfers back to the state debt-free. The performance incentive becomes, if anything, sharper than under a government-paid contract: a badly maintained toll road loses traffic to alternate routes and directly cuts the concessionaire’s own revenue, with no inspector required to make that connection.

This is not a theoretical import. Nigeria has already run this exact model, on the Lekki-Epe Expressway in Lagos State and the results carry a lesson every bit as important as the success.

Lagos contracted the Lekki Concession Company in 2006 to reconstruct and upgrade the fifty-kilometre Lekki-Epe corridor on a thirty-year toll concession, the first project of its kind in Nigeria and only the second private toll road in Africa outside South Africa. The road was rebuilt to a high standard and materially improved capacity on one of Lagos’s most congested corridors. But the project also triggered sustained public protest, because the road being tolled was one residents had used free of charge for decades, the toll was experienced not as payment for new value, but as a tax on something that had always been theirs. Currency devaluation between 2008 and 2013 then strained the concessionaire’s economics in ways the original deal never priced in, pushing toward toll increases that deepened the resentment. By 2013 Lagos State moved to buy back full control specifically to head off further toll hikes, ultimately acquiring the company outright in 2014 at a combined cost, by contemporary estimates, north of ₦60 billion once inherited debt was included.

The lesson is not that toll concessions fail. It is that tolling an existing free road, without the public having chosen or clearly benefited from the change, is a specific and avoidable mistake and that currency and inflation risk in a long-dated concession must be priced and structured explicitly, not assumed away.

The Ogun Flagship Corridor proposal applies that lesson directly. Rather than tolling roads people already use for free, this track is reserved for genuinely new capacity, a new bypass around a congested town, a new bridge, a substantially widened corridor with an existing free alternate route still available. People pay for speed and reliability they did not previously have; they are not asked to pay for what was already theirs.

Selection criteria for the flagship corridors.

Toll viability depends on sustained, heavy commercial traffic, this is not a model to force onto a quiet rural road. Ogun’s most promising candidates sit along its already-established industrial spine: the corridors linking the Agbara–Ota–Sango–Sagamu manufacturing belt and the Ewekoro–Ibese cement corridor to the Lagos boundary and the state’s other commercial centres, where freight and commuter volumes are dense and constant. A proper traffic and revenue study, standard practice before any concession is signed, would confirm the final selection; this paper’s role is to establish the model and the criteria, not to pre-select the exact routes.

Realistically, not every flagship corridor will be toll-viable on traffic revenue alone, and the paper should say so honestly rather than oversell it. International practice for exactly this situation is a viability gap arrangement: a smaller, capped, one-time state contribution toward construction, after which the concessionaire carries all operating and maintenance responsibility funded from tolls, with no further periodic state payment. This differs fundamentally from the availability-payment model in the core proposal, the state’s exposure is a defined, one-off amount at the start, not a growing multi-year stream.

The two tracks together directly answer the fiscal-crowding concern raised earlier in this series. Only the roads that genuinely cannot sustain themselves on toll revenue draw on the state’s periodic-payment capacity, capped as already proposed. The busiest, most commercially valuable corridors, arguably the roads whose collapse would do the most economic damage are financed largely or entirely outside the state budget altogether.

Two design disciplines, non-negotiable given Lekki’s experience:

Publish the toll schedule and its escalation formula, tied to a transparent inflation index, never to concessionaire discretion, before construction begins, not after. The Lekki backlash was as much about the manner of imposition as the toll itself.

Reserve tolling exclusively for new or substantially expanded capacity, with a free alternate route wherever feasible. This single rule is the difference between a concession the public accepts and one that ends, as Lekki’s did, in a costly government buyback.

The Fiscal and Economic Case

The international evidence converges on cost savings in the range of 10% to 40% relative to traditional contracting, driven by two compounding effects: continuous preventive maintenance is structurally cheaper than periodic reconstruction from a state of near-collapse, and a contractor paid to keep a road working for a decade has every incentive to build it right the first time rather than build cheaply and hope a payment has already cleared before the cracks appear.

Applied to a state road capital and maintenance budget, even the conservative end of that range represents a substantial multi-year saving, and unlike most of this series’ proposals, this one requires no new revenue stream at all. It is entirely a reallocation of money the state already spends, restructured around better incentives rather than more spending.

The Federal Roads Maintenance Agency 2026 budget proposal is N229.99bn. N191bn for “capital expenditure”, N5bn for “personal costs”, and N33bn for for overhead expenses. With a performance-based road construction budget, it is very possible that we may not spend this budget in a year if the contractors are asked to maintain roads they build. Same applies to the states.

There is a second economic effect the Kaduna pilot documents directly: roads that stay usable, rather than cycling through collapse, sustain the market access, farm-to-market produce movement, and healthcare and education access that a road is actually built to provide. A road that works for ten continuous years delivers roughly ten years of that economic value. A road that collapses every eighteen months delivers perhaps a third of it, with the rest lost to the months of impassability between collapse and the next contract’s completion.

The Political Economy — Written Plainly

This is, on its face, one of the least glamorous papers in this series, there is no ribbon to cut for a pothole that never appears. But it may be the single most relatable reform available to any state government, because there is no more universal Nigerian grievance than the collapsing road, and no governance failure the average citizen understands more instinctively or resents more consistently.

The political value here is different in kind from the commissioning-ceremony politics of the earlier papers. It is reputational and comparative: the administration that can credibly say “the roads we built are still roads three, five, eight years later, go and check” owns a claim no predecessor who governed under the old model can make, and no successor can quietly undo without it becoming visible on the published dashboard. In a political culture exhausted by roads that fail before the loan used to build them is even repaid, durability itself becomes the campaign message.

There is also a sharper version of this argument, and it belongs in the paper rather than left unsaid: any politician who resists this reform is choosing to defend a system that pays contractors regardless of whether the road survives. That is not a technical position. It is, plainly, a position that benefits someone other than the public and it is a legitimate, evidence-based line of political attack against opponents who cling to traditional contracting once a performance-based alternative, tested in Kaduna, is on the table.

Conclusion

Nigeria does not have a shortage of road-building. It has a shortage of road keeping. The country has spent enormous sums building roads that were never designed, contractually, to survive and has then spent again to rebuild the same stretch of ground, sometimes more than once, sometimes within a single term of office.

The fix does not require new technology, new taxes, or, for the busiest corridors, even new state financing. It requires a different sentence in the contract — pay for the years the road works, not the day it opens — and, for the roads that can bear it, a different payer altogether: the people who use the road, not the treasury that serves everyone. Kaduna already proved the performance model works in Nigeria. Lekki-Epe proved the toll model works too, and proved exactly what to avoid in applying it. The only question left is which state combines both lessons first.

Sources: World Bank Transport Notes on Output- and Performance-Based Road Contracts;

World Bank/PPIAF sample OPRC bidding documents and lessons-learned issue briefs;

3ie systematic review of performance-based road maintenance contracts;

Chad OPRC pilot documentation (SSATP); comparative CREMA cost studies, Brazil and Argentina; case study of the Kaduna State, Nigeria OPRC pilot contracts, 2011–2016;

Lekki-Epe Expressway Toll Road Concession Project documentation and reviews (Lagos State, Lekki Concession Company, African Development Bank, Trinity International LLP.

The Turnaround Papers is a series proposing implementable, numbered solutions for the Nigerian economy, federal, state, and local. A full executive implementation brief is available to state governments on request. Paper No. 4 follows.

Seun Sylvester Opaleye, PhD, is a development economist based in Canada, where he works in public policy. He writes at faithwithstrategy.com.