ABSTRACT
Introduction Infrastructure is a key ingredient both to economic growth and quality of life. Infrastructure is “an umbrella term for many activities referred to as social overhead capital,” and includes public utilities, such as power, piped water supply and sanitation and sewerage, public works, such as roads and dams, and other transport sectors, such as railways, urban transport, and airports (World Bank, 1994, p. 2). This chapter focuses on an essential component of an effective infrastructure network-the ability to operate and maintain the infrastructure properly. The tendency in much of the earlier infrastructure literature was to focus on infrastructure as capital investments and thus the core of the capital project cycle rather than to think of a series of infrastructure services that are produced using a set of inputs that includes physical capital.1 In the production function context, operations and maintenance are another group of inputs that are essential to reaping the value of the services. Viewing operations and maintenance expenditures in this fashion highlights their role in service provision but also heightens the importance of political economy considerations and service assignment responsibilities in financing effective services. The remainder of the chapter is divided into six sections. The next section places operations and maintenance in the context of infrastructure service delivery. The second section examines the impact of operations and maintenance on production and welfare. The third section describes organizational options for operations and maintenance including decentralization and privatization. The following section evaluates decision making and efficiency of operations and maintenance in a social efficiency and political economy context. The fifth section identifies some options for improved operations and maintenance policy. The chapter finishes with a conclusion.
