A well-maintained road network thatprovides the level of service required by road-users is animportant element of Azerbaijan's development strategyto accelerate economic growth and reduce poverty. As part ofthis strategy, the Government of Azerbaijan (Government) hasundertaken major capital improvements on the major arterialroad network. However, the secondary and local roadscontinue to be underfunded, and a large rehabilitationbacklog has been accumulating in recent years. Deferredmaintenance leads to a future burden of more expensiverehabilitation and road reconstruction: for every US$1 indeferred maintenance, there is an associated US$4 cost toroad-users. To avoid such a scenario, the Government needs:(i) to devise an institutional and financing framework thatprovides adequate funding for maintenance andrehabilitation; and (ii) to finance capital improvements onkey priority roads.The objectives of this study are: (i)to identify the weaknesses and challenges confronting thesustainability of road maintenance and rehabilitation; (ii)to determine to what extent these factors are linked toparticular institutional and financing arrangements; and(iii) to assess how these factors can be resolved. The studymakes a series of recommendations aimed at improving themanagement and financing of the road sector in Azerbaijan.
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