The approaches to managing our road transportation infrastructure are not sustainable. A sustainable road transport infrastructure must meet the needs of present road users and give allowance to accommodate future developments. There is a gap between expected life span of roads in Nigeria and actual life span after putting the infrastructure into use. This paper examined the reasons government cannot repair roads in Nigeria, identify the challenges faced by the construction companies while on road construction projects and the effects of bad roads on national sustainable development. Ministry of Works and Transport, Ibadan and ad hoc staff of two major construction companies Reynolds Construction Company (RCC) and China Civil Engineering Construction Corporation (CCECC) were purposively selected based on the number of roads they have constructed in South-western Nigeria. Principal Component Analysis was used to identify the various factors that are responsible for the inability of government to construct and repair roads. Descriptive analysis was used to explain the challenges of construction companies and also the effects of bad road on national development. The findings identified 20 factors that are responsible for the inability of government to construct and maintain roads which were reduced into eight components. Some challenges in road construction are erosion, inadequate skilled labour, capital for equipment, funding, user’s problem and machinery repairs. The effects of bad roads include: road crashes (27%), high vehicle maintenance cost (21%), capital flight (17%), passengers’ discomfort (14%), high transportation cost (11%) and drivers’ fatigue (10%). The study concluded that, there should be standardized procedure for road construction projects in the form of: penalty for failure to meet the required deadline, quality, usage and rehabilitation in order to achieve sustainable development.