Prudence, Transparency, Integrity, Value Uganda Road Fund Uganda Road Fund (URF) Plot 10, Kafu Road...

1Prudence, Transparency, Integrity, Value

Uganda Road Fund

Uganda Road Fund

(URF)Plot 10, Kafu Road

5th Floor, Twed TowersTel:

0414257072/312229009Email: [email protected]

Website: www.roadfund.ug

Paper on Fast Tracking Progress in Addressing Gaps in the Road Fund

Presented at the NRM caucus Retreat, 7th – 15th, Kyankwanzi

By Eng. Dr. Michael M. Odongo

Executive Director, Uganda Road Fund

mailto:[email protected]

http://www.roadfund.ug/

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Prudence, Transparency, Integrity, Value 2

Outline of presentation

Background and historical perspective of the Road Sector

1986-2014

A Road Fund in Modern Road Management

Uganda Road Assets and managing agencies

Successes in modernisation of Uganda Roads

Current gaps in Road Fund operationalisation

Achievements of Uganda Road Fund at 6-years

Conclusions and NRM Retreat requests

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Background and historical perspective of the Road Sector 1986-2014

Post-1986 is a story of relentless protracted 3-phased struggle by NRM to put roads at the centre of transformation and national development;

By 1986 up to 90% of feeders roads, 350Km of the then 2,000Km paved

national roads and the entire 6,000Km gravel national roads were in state of dis-repair.

The first 10 years, 1986-1996 constituted phase I for reclaiming credibility and rehabilitating the network to restore accessibility and motorability

By 1992 about 6000Km of the 10,000-Km national roads and 1600Km of the 20,990Km feeder roads had been rehabilitated

A 1st ever national roads conference convened by NRM and supported by development partners took place in Kampala on 4-6 February 1992 and opened by H.E Dr. Samson Kisekka

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Background and historical perspective cont’d A key outcome of the conference was the launch of key reforms in the

roads sector considering that very US$1 not invested in road maintenance escalates road maintenance cost by up to USD2-3

Between 1996 and 2006, the 10-Year Road Sector Development program (RSDP) was implemented which constituted phase II of the strategic effort of NRM in modernizing road infrastructure.

Its objectives were four-pronged i.e. creating ownership, stabilizing road financing, clarifying responsibility and strengthening/commercializing management.

The reforms resulted in formation of Uganda National Roads Authority (UNRA), Uganda Road Fund (URF) and the role of Ministry of Works was realigned.

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A Road Fund in Modern Road Management

A Road Fund is a key pillar in road asset preservation;

URF was set up by Act of Parliament in 2008 to finance routine and periodic maintenance of public roads;

A Road Fund is an institution set up through which a selected stream of revenues is put at the disposal of government roads department or agency without being subjected to general budget procedures and reviews associated with the consolidated fund;

A Road Fund principally enshrines market principles in public road management through charging for road use on a fee (not taxes) for service basis.

The Road Fund was operationalized in January 2010 and to date has disbursed well over UGX1.31Trillion to its designated agencies

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Uganda Road Assets and managing agencies

The size of known public roads asset is 80,000 Km with an estimated replacement value of some US$4.0billion. These include:

UNRA (21,000Km national roads)

KCCA (1,200Km City roads)

111 Districts (22,000Km districts roads),

22 Urban municipalities (5,600 Km)

176 Town Councils (4,500Km roads),

1104 Sub-counties responsible for between 30,000 to 60,000km CARs

Funding for maintenance is mandated to URF by the URF Act,2008.

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Successes in modernization of Uganda Roads- phase III (consolidation)

Between 1992 and 2014, increments were registered as follows:

stock of paved national roads , from 2,096Km to 3,795Km,

core public roads network , from 28,980Km to 80,000Km

urban roads, from 680Km to 5,600Km;

Inter and intra regional connectivity, from 8,000Km to 21,000Km, 262%!

Over UGX 8.7 trillion invested in roads

Establishment of a Road Fund in 2008. To Note: an independent 2G Road Fund is a central pillar for predictability and stability of maintenance resources

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Current gaps in Road Fund operationalisation A 2G road fund empowers designated agencies to undertake long term

maintenance performance contracts that better guarantees credibility of the network;

The Road Fund is not yet fully operationalized. The principal objectives of establishing a sustainable mechanism for road maintenance financing is yet to be realized.

Section 21 (3) of the URF Act 2008 requires that Road User Charges shall be remitted directly to the Fund on a monthly basis

Implementation of Section 21 (3) of URF Act is constrained by Uganda Revenue Authority Act, Section 14, Cap 196; which essentially prohibits direct transfer of URA collections to any other account other than the Consolidated Fund.

A Cabinet Memo for operationalization of the Fund has been prepared

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Current gaps in Road Fund cont’d A partly operationalized Fund:

is inadequate to fully guarantee predictable funding for asset preservation

Can not support long term performance maintenance contracts;

Is un-responsive to the network needs in terms of time and adequacy;

is rigidly tied to the disbursement cycle of the consolidated fund;

annual plough-back to Treasury substantial un-utilized road maintenance funds;

At the close of FY2013/14, UNRA lost back to Treasury a whopping UGX40bn.

Breed growth of backlog ; For instance while 1,527Km of roads were bituminized from 2009 to 2014, 1,882Km of

paved roads deteriorated due to lack of sustainable financing, in effect leading to negative progress of 355Km of backlog.

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Achievements of Uganda Road Fund at 6-years Even in the current partly operationalized state, the Fund has

achieved as follows:

Transparently disbursed UGX 1.3 trillion over the last 6-years; Developed and is using a scientifically derived resource allocation formula,

broadly accepted by stakeholders; Developed and is implementing a 5-year Road Maintenance Financing Strategic

Plan – 2013-2018; Prepared URF regulations and control documents ready for gazzeting; Operationalized frameworks for Force Account, road user charges and

performance target systems.

Evidently, unit rates have tumbled e.g. Regravelling from UGX10m to UGX7.0m per Km

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Pursuit of full operationalization Owing to registered successes, URF is now firmly well established

in the Transport sector. Efforts have included securing support of:

Cabinet at its retreat of 2011; Sector Working Group and development partners Designated agencies, parliamentary committees for infrastrucure and Finance ;

Efforts have been closely coordinated with:

Ministries for Finance (to draft Cabinet memo), Local Government and for Works; Solicitor General, OPM; Continental road fund association, ARMFA; Now, the NRM Retreat

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Opportunities from a 2G Road Fund

Streamlining maintenance financing currently scattered in several MDAs;

Flexibility for funding credible research programs to harness science and technology such generating electricity from roads; Netherlands and Israel are have innovated to generate renewable energy from

asphalt pavements; Kenya is piloting a roadway power generation system to generate 51 MW per

Km from compression and vibration of traffic.

Road safety and axle load control programs and environmental practices;

Fostering long term maintenance contractual engagements

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Conclusions and request to NRM Retreat

Government should carry through with commitments made way back in 1992 to conclusively commercialize road management, reform institutions, clarify roles and stabilize financing.

Support the full operationalization of the Uganda Road Fund by authorizing the necessary action to be taken to address the lacuna in s.14 of the Uganda Revenue Authority law to enable the Fund access the mandated lines of road user charges

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Conclusions and request to NRM Retreat Cont’d

Rebalance the allocations of road resources between new road development projects and maintenance, from the current 80:20% to at least 65:35%;

Build technical capacity at local governments and at UNRA by increasing number of staff and Stations;

Prioritize clearing of the road maintenance backlog, additional UGX200bn each year for 5 years

Encourage Members of Parliament to actively participate in District Roads Committees to oversee use of road maintenance resources

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Force Account Operations

Road Gangs – ready for Routine manual maintenance of district roads

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Equipment maintenance challenges

Damaged District Force Account Equipment at Kabarole DLG Yard

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Swamp crossing

Impassable swampy road section in Lyantonde DLG

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Delayed timely maintenance

Impassable District Feeder Road in Lwengo DLG

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Bottlenecks on District Roads

Impassable crossing requiring Bridge Construction on District Road

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Delayed Rehabilitation

Heavily gullied District Road

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Bottlenecks on CARs

Community makeshift pedestrian bridge crossing

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Future network improvements

Trumpet Interchange at Kajjansi (Km 11+737) – Kampala-Entebbe Expressway

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Future Network improvements cont’d

Kampala Northern Bypass

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2G URF + NRM = Modern Roads

Thank You

Uganda Road Fund

Prudence, Transparency, Integrity, Value

Prudence, Transparency, Integrity, Value Uganda Road Fund Uganda Road Fund (URF) Plot 10, Kafu Road...

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