A Case for Breaking Down the Capital-Maintenance Barrier

In many states, capital and maintenance budgets are distinct and separate. It is well-known, however, that new (capital) assets must be maintained over the long term; capital investments directly impact maintenance requirements. In the current situation, transportation agencies are unable to use funds for much-needed maintenance. In many instances, available overall funds are enough to provide a sustainable transportation network yet budget restrictions stop these agencies from using funds in the most economic way. The condition of our roads will degrade as we continue to build more that we will not be able to afford in the future. In this context, pavement managers should be part of the discussion on whether it is more valuable to build a new asset or maintain an existing. This paper makes an economic case for breaking down the capital-maintenance barrier, and considering capital and maintenance projects as alternatives in the same decision framework. It demonstrates that capital and maintenance investments are simply alternatives along the continuum of an asset's life, rather than mutually exclusive investment alternatives. This perspective will help pavement owners to re-consider the way in which they structure their organizations and investment evaluation processes.