Columnists

Road fund agency on highway to growth

Christable Banda.

Analysis: CHRISTABEL BANDA
THE road sector is a dynamic arm of national development and cuts across all areas of the country’s diversified economic sphere.

As spelt out in the Seventh National Development Plan (7NDP), its main goal is to create a diversified and resilient economy for sustained growth and socio-economic transformation, driven, among others, by agriculture, tourism, manufacturing and mining. The road is an important vector in achieving this goal.
We look forward to seeing what we still need to accomplish within our distinct mandates of resource mobilisation, fiduciary management and value for money, in the case of the National Road Fund Agency (NRFA), care, maintenance, rehabilitation and construction of public roads for Road Development Agency (RDA) and road transport services and safety regulation, enforcement and education in the case of Road Traffic and Safety Agency.
The committee of the road sector chairperson boards has been a useful platform in advancing a common agenda for the three road sector agencies and I wish to extend my deepest respect and appreciation to the committee chairperson Samuel Mukupa, for his energetic and industrious leadership, which has seen the sector attain a robust strategic direction as all cross-cutting road sector matters are deliberated on, with policy guidance passed on to road sector management.
The NRFA was appointed as a lead tolls agent by the RDA, in accordance with the Road Tolling Act 14 of 2011, and we are pleased to report that the RDA has so far constructed and handed over to us nine inland toll stations, which are currently in operation across the country, the recent ones being Chongwe Toll Plaza, on the Great East Road, simplified toll stations at Kalense, Kateshi and Chembe in Northern and Luapula provinces, respectively.
We are also happy to report that we are closing the year with over K600 million in tolls revenue from inland toll stations, ports of entry and weighbridge collections.
With an increased footprint of toll stations next year, we project to raise K845 million in 2018 and all this revenue is part of the overall Government strategy of growing domestic revenue for sustainable road maintenance.
Further, we identified the National Pension Scheme Authority (NAPSA) as a key and strategic partner in the provision of the much-needed road financing to the road sector on commercially viable roads.
This is based on a mutually agreed finance agreement with the repayment centred on toll collections from toll stations to be constructed on the financed roads.
NAPSA has availed us with K2.12 billion on a 10-year loan facility and the projects being financed include Ndola-Kitwe, Kitwe-Chingola and Chingola-Solwezi scheduled to be completed in 2018.
I wish to call upon the road sector boards and management to reinforce, both the intra and inter-agency collaborative mechanisms, through the committee of chairpersons, directors or chief executive officers, so that we can create horizontal and vertical synergies to promote both forward and backward linkages and enhance quality service delivery in the road sector.
2017 ROAD SECTOR BUDGET PERFORMANCE
The NRFA mandate falls under the Ministry of Finance. It plays a fiduciary oversight on all road sector finances, and ensures value for money.
The agency operates as a commercial entity by bringing roads on the market place through the Road Tolling Programme, where road users pay for the use of tolled sections of the country’s highway.
Generally, the agency performed well in 2017 – the ministry is closely monitoring it and expectations are very high. They need for the agency to perform even more in 2018.
REVENUES
Local resources consist of fuel levy, other road user charges, including road tax, weighbridge fees and fines.
K1.1 billion collected in 2017 was collected through fuel levy and other road user charges.
Road tolling: K667 million against target of K662 million in road tolls, translating into 98 percent achievement.
There was an increase of 44 percent from 2016 when revenues collected stood at K462 million. The target for 2018 is K845 million.
Overall road sector budget under the local component is K2.68 billion.
Actual funds mobilised and disbursed in 2017, including NAPSA (K 1.2 billion), was K3.68 billion, 37 percent over and above the budget of K2.68 billion.
This was a great improvement compared to the K2 billion mobilised and disbursed in 2016 under the local budget of K3.4 billion.
The NAPSA facility of K2 billion to be paid over a period of 10 years covers Ndola-Solwezi corridor. Tremendous progress has been made and no major complaints received during the current rainy season.
External funds received amount to K3.8 billion from co-operating partners, who include the World Bank, EIB and AfDB.
Overall, 2017 budget was K8.62 billion, the amount released, including NAPSA is K6.26 billion, which translates into 73 percent.
ROAD TOLLING SYSTEMS AND CONTROLS
A. Tolls revenues ring fenced for road maintenance and construction,
B. All collected tolls go into a consolidated account for record purposes.
C. Remitted into the Road Fund for onward disbursement by NRFA.
D. The cycle leaves an audit trail and all toll revenues can be reconciled from source to expenditure.
E. Ministry of Finance is satisfied with this top level governance of road tolling as it ensures fiscal discipline, transparency and accountability.
F. Continuous improvement required to ensure efficiency and service excellence.
PAYMENT CRITERIA
A. Government has streamlined the payment process with an equitable distribution of finances between local and foreign contractors.
B. Small contractors (routine maintenance) to be paid every month so that we start reducing on what is owed.
C. Focus on completing projects at an advanced stage so that beneficiaries can start enjoying the benefits, meeting the promises made by President Edgar Lungu.
D. We endeavour to attain equitable distribution of the available resources.
This year, we intend to strengthen domestic revenue base, and increase road tolling footprint.
We are also working round the clock to significantly reduce the debt burden in the road sector. We expect to mobilise and finance 100 percent of the budget.
We are strengthening co-operation with external financiers, World Bank and AfDB.
World Bank will provide US$200 million for the improved Rural Connectivity Project covering six provinces: Central, Eastern, Luapula, Muchinga, Northern and Southern.
We have secured US$256 million from AfDB and Africa Growing Together (AGT) for feeder roads along the Chinsali-Nakonde Great North Road corridor. This also includes US$12.76 million from GRZ as a contribution.
The author is NRFA board chairperson.

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