RDA leaves 9,000 km of national roads off balance sheet

Raising concerns over state asset valuation  

By Nishel Fernando  

The Road Development Authority (RDA) has failed to capitalise nearly 75 percent of the Class A and B road network it manages, leaving billions of rupees worth of state assets off its statement of financial position.   

According to the Auditor General’s latest observations on the 2023 financial statements, while the Authority is responsible for a massive network spanning 12,225 kilometers, only a mere 3,267 kilometers had been properly capitalized since the process began in 2018.   

This significant accounting lapse means that the value of approximately 8,958 kilometers of national highways—representing the backbone of the island’s transport infrastructure—is effectively invisible in the RDA’s financial reporting, distorting the true asset base of the state-owned enterprise during a critical period of economic restructuring.  

The stagnation stems from the historic treatment of road construction as government expenditure rather than asset accumulation, a practice the move toward capitalization in 2018 sought to correct. Unlike new expressway projects where construction costs are readily available and capitalized—such as the Rs. 4.8 billion addition for expressways in 2023—valuing legacy infrastructure requires sophisticated financial modeling.   

The Auditor General has flagged this gap repeatedly, noting that excluding such a vast portion of the network prevents the government from leveraging its full equity potential and hinders accurate depreciation assessments, which are vital for budgeting future maintenance. The audit also highlighted that while the RDA claims to manage these assets, the failure to account for them indicates a disconnect between physical control and financial accountability.  

In response to these audit queries, the RDA management has cited the implementation of the Sri Lanka Road Assets Management System (SLRAMS) as the primary mechanism to resolve the backlog. The Authority has outlined a phased roadmap to complete the valuation, targeting the capitalization of 2,000 kilometers in 2024, followed by 4,000 kilometers in 2025, and the remaining 5,500 kilometers in 2026. This digital transition is expected to automate the valuation process using specific modules for asset operation, but until this integration is complete, the RDA’s balance sheet will continue to significantly underrepresent the nation’s infrastructure wealth.  

Supporting this digital pivot, the RDA’s Master Procurement Plan for 2025–2027 outlines specific capital allocations intended to operationalize these asset management systems. The Authority has earmarked funds for the maintenance of the SLRAMS platform and is actively procuring advanced diagnostic hardware—including Falling Weight Deflectometers (FWD) and inspection drones—to gather the engineering data required for accurate valuation. Furthermore, to address the Auditor General’s concerns regarding land records, the RDA has allocated Rs. 20 million for the development of a dedicated Land Acquisition Information System (LAIS), signaling a move to finally digitize and account for the state’s vast land bank.