Road Funds in South Asia
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1 Road Funds in South Asia Jean-Noel Guillossou & Fang Xu Transport Sector, SASSD Transport Forum March26-30
2 Outlines Maintenance Requirements Vs. Actual Allocations/Expenditures Types of Road Funds Financing the Road Funds Institutional set up Issues Q&A
3 Requirements Vs. Allocations/Expenditures US$ million India Pakistan Nepal Sri Lanka Banglad esh Bhutan Required Actual Required Actual Equals 10%-50% of the required amount for maintenance!
4 Types of Road Funds (1) In Operation India Central Road Fund (CRF) Pakistan National Highway Road Maintenance Account (RMA) Nepal Roads Board Nepal (RBN) India State/Local Road Funds (Uttar Pradesh, Assam, Kerala, Maharashtra, Madhya, Karnataka) Under Planning Sri Lanka Road Maintenance Trust Fund (RMTF) Bangladesh Road Maintenance Fund (RMF) Pakistan National Highway Road Fund (RF) Bhutan Road Fund (RF) India State Road Funds (Gujarat, Rajasthan, Orissa, Tamil Nadu, Mizoram )
5 Types of Road Funds (2) National Level Province/state level District/ Local level India Central Road Fund (CRF) Pakistan National Highway Road Maintenance Account (RMA) Nepal Roads Board Nepal (RBN) India --Assam --Kerala --Maharashtra --Uttar Pradesh India --Madhya Pradesh Farmer s road fund --Karnataka: Chief Minister s Grameen Raste Abhivrudhi Nidhi (CMGRAN)
6 Type of Road Funds (3) Accounting Mechanism Intermediate India CRF Pakistan RMA Sri Lanka RMTF 2 nd generation Nepal: RBN Bangladesh RMF Bhutan RF Pakistan RF
7 Financing the Road Funds-- --India National Level: CRF -Rs 2 per litre for petrol and Rs 1.5 per liter for Diesel -US$2.85 billion in FY Development for national, state and rural road network; maintenance for national highway and state road network State Level: Uttar Pradesh, Assam, Kerala, Maharashtra -Multiple sources: a. Budgetary support: Central non-plan grants and state s budget b. Direct user charges: Cess on petrol and diesel: Uttar Pradesh Road Maintenance Fund; Motor vehicle taxes, Motor vehicle Fees Toll collection: Madhya Pradesh (Car: 10 Rs, Bus: 25 Rs, Truck:35 Rs) c. Other: Fees, fines, returns from fund s investment, loans, etc: the Kerala Road Fund -Both for development and maintenance, only Uttar Pradesh is just for maintenance
8 Financing the Road Funds-- --India District/Rural Roads Madhya Pradesh: Farmer s road fund --2% of agriculture products sold in the states --US$ 28 million per year is available --85% of the levy on agriculture products is for the improvement and maintenance of the major district roads and rural roads Karnataka: Chief Minister s Grameen Raste Abhivrudhi Nidhi (CMGRAN) --Rs 300,000 per km for periodic renewal and Rs 40,000 per km per year for routine maintenance for black-top rural roads -- Rs 25,000 per km per year for water-bound macadam --Rs 20,000 per km per year and gravel roads.
9 Financing the Road Funds-Pakistan National Highway Road Maintenance Account (RMA) --Revenues from all designated sources: US$78million Toll revenue over 57 toll stations: 92% Weigh station: 1.5% Right-of-way commercialization: 1.2% Hoardings/billboards:0.3% Police fine collection etc: 5.0% --Government grants for maintenance: US$19.8 million
10 Financing the Road Funds-- --Nepal Roads Board Nepal (RBN) --Road user charges: $6 million Fuel levy: NRs.1 on petrol and Paisa 50 on diesel---85% of the total Road toll about 10% Vehicle registration charges about 5% Transit fees on international traffic % --Grants from the Government and donors directly through MoF to road agencies: 60% Maintenance funding still comes from General Budget --70% for Strategic Road Network (SRN) maintenance, 30% for Local and Rural Network (LRN) maintenance
11 Financing the Road Funds-Planned Sri Lanka Road Maintenance Trust Fund (RMTF) --Budget support from MoF. $30 million for 2006; $4 million increase for each year until 2010 Bangladesh Road Maintenance Fund (RMF) --Levy on fuel and diesel; --International transit charges to foreign vehicle using the roads of Bangladesh; --Vehicle charges (based on vehicle size and weight); --Other fee/charges recommended by the Board and approved by MoF Bhutan Road Fund (RF) --Main revenue will come from the refund of duties on imported gasoline and diesel, to avoid the negative impact on traffic by direct levies on petrol and diesel
12 Institutional Setup Managed directly by the Government agencies --India CRF --Pakistan Highway RMA Managed by Road Fund Board --Nepal RBN, India State Road Funds --Board members are from public and private sectors --Board manages the fund and approves road maintenance plan --Executive committee/secretariat deals with daily issues and provides technical support --Road agencies prepare and implement road maintenance plan
13 Issues Revenue allocated to RF still fall short of maintenance requirement --Pakistan RMA: shortfall US$17.6 Million (though it is forecasted that new RF will have enough resources for road maintenance with the increased number of toll roads and increased toll rates) --Nepal RBN: shortfall of 2/3 of maintenance requirement for Strategic Road Network (SRN) Not just for Maintenance, on the contrary, priority is assignment to development --India CRF and most states RFs (except Uttar Pradesh)
14 Issues (cont ) Road funds payers are not necessary road users --All Petrol/diesel users pay cess/levy, not all use national/state highway; --Tolls collected from limited section of highways but used for whole highway network While some road sectors generate surplus misallocation of resources --India: road user charges on Primary and Urban road network are exceeding road expenditures, contrary on secondary network --Sri Lanka : transport sector (mainly road sector ) contributes 10% of GDP, while road sector expenditure is 0.75% of GDP Lack of cost recovery analysis
15 Issues (cont ) Road fund with autonomous boards are not functionally independent of the Government --Road users representation is limited: e.g Kerala RF --Road users are represented but their role is limited: e.g: Nepal RBN --Still, funds do not have typical problems of old first generation road funds, likely because of better governance
16 Thank You!!
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