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24.10.2008 General News

National Road Fund Makes Giant Strides

By Francis Xah - newtimesonline.com

By Francis Xah

THE National Road Fund, established under a legislative Instrument in 1985 to finance  road maintenance, has made giant financial strides.

Since 2002, revenue from the fund has increased annually from GH¢40.9 million to  GH¢115 million in 2007.

The fund has set up small to medium scale construction businesses which increased from about 1,000 in 2002 to about 1,870 in 2007.

These disclosures were made on Friday by Francis Arthur, Deputy Director, Finance and Administration of the Ghana Road Fund Secretariat, when he addressed a seminar organised by the Students Representative Council of the Ghana School of Law.

It was under the theme: 'The impact of the Road  Fund Act, Act 536'.

Mr Arthur said under the Act, revenue was derived from fuel levy on petrol and diesel, road bridge tolls, vehicle license and inspection fees, road user fees, and international transit fees.

He  disclosed that good roads had increased accessibility to agricultural extension officers, which enabled farmers to acquire scientific farming methods.

“Further to that, well maintained roads have contributed to timely transportation of farm produce to urban and town centres, which contributes to reduction in post harvest losses”, Mr Arthur said.

Mr Arthur said research indicated that failure in maintaining roads to optimum level was costing vehicle owners more money to use their vehicles on the roads.

On challenges facing the Road Fund, Mr Arthur said even though there had been steady annual improvement in revenue generation this did not meet the road maintenance expenditure of the country.

He  said the revenue generated covered only about 60 per cent of the maintenance requirement, which meant t hat 40 per cent of road networks were not receiving any maintenance activity.

He said whenever a plan to maintain a road is deferred due to lack of investment, a later rehabilitation or reconstruction of the some road costs  eight to 10 times t he original estimation.

Another challenge, he said, was to minimize the over dependency on fuel levy.

He said about 95 per cent of the Fund's revenue is obtained from fuel levy (petrol and diesel), adding that, “this over dependency puts the fund at a very high risk”.

“The risk is better understood in the recent volatility in crude oil prices with the financial crisis hitting advanced economies”, he said.

Mr Arthur said another challenge facing the road fund was that vehicles using Liquefied Petroleum Gas (LPG) did not pay any levy because there was no mechanism or appropriate legal basis for them to pay such levies.

He said the current road toll rates being charged are too low, and that new rates should be approved to reflect the realities.

Mr Arthur tasked the student lawyers to come out with recommendations that would make the process of reviewing the law less cumbersome.

He said most of our roads, deteriorate very fast because of overloading, spillage of petroleum products onto the roads and abandoning of  disabled loaded vehicles on the roads.

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