Road Funds and Road Maintenance: An Asian Perspective...pavement management system system by which...

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Road Funds andRoad Maintenance

July 2003

An Asian Perspective

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© Asian Development Bank 2003All rights reserved.

The views expressed in this book are those of the authorsand do not necessarily reflect the views and policies of theAsian Development Bank (ADB), its Board of Governors,or the governments they represent.

ADB does not guarantee the accuracy of the data includedin this publication and accepts no responsiblity for anyconsequences of their use.

Use of the term “country” does not imply any judgmentby the authors or ADB as to the legal or others status ofany territorial entity.

In this publication, $ refers to US dollar.

Published and printed by the Asian Development BankP.O. Box 7890980 Manila, Philippines

ISBN 971-561-489-2Publication Stock No. 040403

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Contents

I.I.I.I.I. THE ISSUETHE ISSUETHE ISSUETHE ISSUETHE ISSUE ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 11111II.II.II.II.II. THE FTHE FTHE FTHE FTHE FAAAAACTSCTSCTSCTSCTS................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 33333

1. Pavement Wear is Not the Problem......................................................................................................... 32. The Struggle for Maintenance Money ................................................................................................... 33. Road Maintenance—Good Business for the Road Agency? ................................................................... 44. Road Maintenance—Good Business for Road Users ............................................................................. 45. Toll Roads Benefit Users: Implications for Road Agencies and Goverments ......................................... 56. What is Proper Maintenance? ................................................................................................................. 57. Computerized Pavement Management Systems ..................................................................................... 68. Lenders as Part of the Problem ............................................................................................................... 79. Should Lenders Fund Maintenance? ...................................................................................................... 7

III.III.III.III.III. THE LENDERS’ PERSPECTIVETHE LENDERS’ PERSPECTIVETHE LENDERS’ PERSPECTIVETHE LENDERS’ PERSPECTIVETHE LENDERS’ PERSPECTIVE ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 99999IVIVIVIVIV..... THE DEVELOPING MEMBER COUNTRIES’ PERSPECTIVETHE DEVELOPING MEMBER COUNTRIES’ PERSPECTIVETHE DEVELOPING MEMBER COUNTRIES’ PERSPECTIVETHE DEVELOPING MEMBER COUNTRIES’ PERSPECTIVETHE DEVELOPING MEMBER COUNTRIES’ PERSPECTIVE ................................................................................................................................................................................................................................. 1111111111VVVVV..... THE CHALLENGESTHE CHALLENGESTHE CHALLENGESTHE CHALLENGESTHE CHALLENGES .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 1313131313

1. To Earmark or Not to Earmark? ........................................................................................................... 132. Which Roads to Fund............................................................................................................................ 133. How to Make Pavement Management Technology Locally Sustainable .............................................. 144. How to Involve Stakeholders ................................................................................................................ 145. How to Maintain National Commitment ............................................................................................. 156. How to Preserve Lender Interest in the Road Sector............................................................................ 157. Challenges to Lenders ........................................................................................................................... 16

VI .VI .VI .VI .VI . A SOLA SOLA SOLA SOLA SOLUTION THAUTION THAUTION THAUTION THAUTION THAT WORKST WORKST WORKST WORKST WORKS .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 1 71 71 71 71 71. Establish a Road Maintenance Fund .................................................................................................... 172. Have the Finance Ministry Promote the Road Maintenance Fund .................................................... 183. Establish Locally Sustainable Pavement Management Systems ......................................................... 194. Fund the Maintenance Backlog ............................................................................................................ 195. Acquire Lender Support ....................................................................................................................... 206. Take Steps Toward Sustainable Funding of Road Maintenance .......................................................... 20

VII .VII .VII .VII .VII . AN ALAN ALAN ALAN ALAN ALTERNATERNATERNATERNATERNATIVE SOLTIVE SOLTIVE SOLTIVE SOLTIVE SOLUTIONUTIONUTIONUTIONUTION ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 2 32 32 32 32 31. Self-Reliance ......................................................................................................................................... 232. Transformation Forum .......................................................................................................................... 233. An Agenda for Change ......................................................................................................................... 244. Development Agencies as Facilitators, not Drivers, of Change ........................................................... 245. Supporting the Process of Change ........................................................................................................ 246. Keeping Changes on Track ................................................................................................................... 26

VIII .VIII .VIII .VIII .VIII . AN APPROAN APPROAN APPROAN APPROAN APPROAAAAACH TO COMBACH TO COMBACH TO COMBACH TO COMBACH TO COMBATING MAINTENANCE NEGLECTTING MAINTENANCE NEGLECTTING MAINTENANCE NEGLECTTING MAINTENANCE NEGLECTTING MAINTENANCE NEGLECT .................................................................................................................................. 2 72 72 72 72 7

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APPENDIXESAPPENDIXESAPPENDIXESAPPENDIXESAPPENDIXES1. Road Maintenance Funds: Current Good Practice ............................................................................... 292. An Alternative Route to Sustainable Funding ....................................................................................... 373. Review of Selected Road Funds and Road Fund Initiatives .................................................................. 454. Summary Report of the Regional Workshop on Funding for Road Maintenance ................................ 63

Annex A. Workshop Program ............................................................................................................... 75Annex B. List of Participants ................................................................................................................ 77Annex C. Groupings for the Workshop Sessions .................................................................................. 85Annex D. Workshop Sessions, Results, and Recommendations .......................................................... 91

5. Bibliography ....................................................................................................................................... 101

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Glossary

ADB Asian Development Bankbenefit-cost ratio ratio of discounted benefits to discounted costsCRF consolidated revenue fund—central revenue account into which all taxes and fees

due to the government are paiddiscount rate percentage annual rate at which the value of future benefits and costs are reduced to

compare with present-day costs and benefitsDMC developing member country (of ADB)earmarking process of reserving revenues, or portions of revenues, from certain taxes for a given

use (such as road maintenance)EIRR economic internal rate of return: the discount rate at which the sum of discounted

costs and benefits equals zerofinance ministry generic term covering various agencies found in DMCs, variously known as the

Ministry of Finance, Department of Budget, Ministry of Economy, and alsoplanning agencies that share responsibility for economic efficiency

fiscal flexibility freedom to allocate, at will, expenditure of funds in the national budgetGTZ Deutsche Gesellschaft für Technische Zusammenarbeit GmbH (German Agency

for Technical Cooperation)HDM3 Highway Design and Maintenance Standard ModelHDM4 Highway Development and Management SystemIMF International Monetary Fundinformal income income derived from the informal sector of the economy (nonregistered or untaxed

economic activities)lenders generic term for multilateral agencies, like ADB, and bilateral agencies, like GTZ

(q.v.) that provide loans to developing countriesNGO nongovernment organizationpavement management system system by which pavement condition is tracked and maintenance needs identifiedQA quality assurance: a system by which quality is assured by auditing processes, rather

than checking each outputRETA regional technical assistanceRMF Road Maintenance FundRMI Road Maintenance Initiative (of the World Bank and bilateral donor agencies, in

Sub-Saharan Africa)road maintenance all activities needed to keep a road operating indefinitely—routine maintenance,

periodic maintenance, and rehabilitationroad management system system by which the condition of pavements, bridges, and road furniture is tracked

and maintenance needs identifiedroad tariff a set of fees and charges that act as prices charged for road useTA technical assistance:resources, funded either by a loan or grant, for project

preparation, advisory and operational purposes, and regional activities

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Foreword

It is widely accepted that roads play an important role in development, and help reduce poverty. To realize theirpotential contribution, however, roads need to be properly maintained. In many of the Asian Development Bank’s(ADB’s) developing member countries (DMCs), the standard of road maintenance is poor. Often the main reason

given for poor road condition is that funds for road maintenance are inadequate.This report presents the findings of a regional technical assistance (TA) 5871: Road Funds Strategy, which was

carried out between April 2000 and March 2001 to examine the problem of road funding and propose solutions.Under the TA, road funding experiences worldwide were reviewed (Appendix 3) together with other relevant

source materials, a bibliography of which is appended (Appendix 5). But much of the existing body of knowledge onroad funds relates to either African or Latin American countries. Therefore, the question arises as to how much of thisexperience is relevant to Asian countries. Of particular concern were issues relating to Asian perceptions of the need forroad maintenance and the funding and administration required to address that need. To address this gap, detailed fact-finding trips were made to Kyrgyz Republic, Lao People’s Democratic Republic, Pakistan, Philippines, Uzbekistan,and Viet Nam to discuss the perceptions and experiences of road funds with government officials and road users. Fromthese initial meetings, issues and perceptions emerged, which were used as the basis for the Regional Workshop onFunding for Road Maintenance. At this Workshop, held at ADB in Manila on 6–7 March 2001, more than 60 partici-pants representing 20 Asian countries, the international development community, and other interested parties discussedthe Asian experience with road funds. A report on this Workshop can be found in Appendix 4. The results of thisWorkshop were used to refine the proposed approach to combat maintenance neglect presented in this report.

For much of the project, Marcelo Minc was the ADB project officer supervising and guiding work. The projectwas finalized under Paul Vallely. The consultants engaged to undertake the work were Ronald Allan and Olga Caday.The contribution of Stephen Vincent to Chapter VII is gratefully acknowledged.

The Issue 1

In the developing world, roads are deteriorating forwant of maintenance. Roads are being lost. The AsianDevelopment Bank (ADB) and other agencies lend-

ing money for roads are concerned about this. Inadequatemaintenance is the cause of the problem. Maintenanceincludes all activities needed to keep a country’s road net-work operating indefinitely:

• routine maintenance (restoring drainage, fillingpotholes and cracks, maintaining edges);

• periodic maintenance (resealing, about every5 years, to rejuvenate the surface); and

• rehabilitation (overlaying, about every 15 years,to restore smoothness and durability).

A road network is sustainable when it is in satisfac-tory condition1 and does not, as a whole, deteriorate overtime. Individual roads do not remain static: paved roadsgo through a cycle of accumulating roughness, despiteroutine and periodic maintenance, until they are restoredto their original smoothness by rehabilitation. Since a net-work is made up of roads that individually are at all pointsin this maintenance cycle, the condition of the network asa whole does not change year by year. A sustainable roadnetwork is, therefore, one that is maintained.

Inadequate maintenance is attributable to any of thefollowing reasons:

• Money is not allocated (in sufficient amounts).• Money is allocated but not spent.• Money is not spent efficiently.• Money is not spent effectively.Addressing only the first cause—allocating more

money—will not be enough to solve the road maintenanceproblem; it has not sufficed in the past. This study recog-nizes the importance of all four causes and addresses them.

Almost all ADB’s developing member countries(DMCs) fail to maintain roads properly. In principle, the

problem should not be hard to fix. All that is needed is asystematic and rational set of rules and tools to identifyand plan maintenance tasks, a trained workforce withequipment to carry out the work, and the money to pay forit. Experience reveals, however, that solving the road main-tenance problem is considerably more resistant to solu-tion than it appears. Many countries have tried to reformroad maintenance but have failed—or reforms havelapsed—after a short period of improved performance.

ADB, at times in cooperation with the World Bank,has been working with its DMCs, some of which havegone down the path toward reform but have generally cometo a halt just before the final step: implementing change.The arguments for reform are compelling and the ben-efits are great, yet there is a very strong reluctance tochange. How to overcome this reluctance is the challengefaced by this study.

This study did not set out to reinvent good practice.Rather, it builds on existing knowledge and looks at theimplementation problems that have prevented good prac-tice from being given a chance. Over the last 15 years, ahandful of developing countries, mainly in Africa and theCaribbean, have reformed their road maintenance fund-ing with strong encouragement and support from theWorld Bank and German Agency for TechnicalCooperation.2 The experience gained has identified thestrengths and weaknesses of the main options for reform.There is now a body of knowledge that is considered bymany to be good practice.

The following sections of this study first describe theproblem in greater detail, together with the challenges in-volved in providing adequate road maintenance, then setout the lenders’ and the DMCs’ views of the situation.Two sections follow that propose solutions that can meetthe challenges of road maintenance. The final section

I. THE ISSUE

1 “Satisfactory” in terms of serving the amount and type of traffic using the road. 2 Deutsche Gesellschaft für Technische Zusammenarbeit GmbH.

2 Road Funds and Road Maintenance

presents a recommended approach for ADB and otherdevelopment agencies. Several appendixes support the maintext, notably one on good practice for road maintenance

reform, and another containing observations and recommen-dations from participants in the March 2001 Regional Work-shop on Funding for Road Maintenance.

The Facts 3

1. Pavement Wear is Not theProblem

Over the past 2 decades, much has been saidand written about loss of huge investments inroads in the developing world.3 Roads are

being lost (or at least pavements are being lost) becausethey deteriorate into muddy, or dusty, or potholed dirt andgravel; slivers of asphalt among the potholes betray manyroads that were once sealed, i.e., water- and wear-proofedwith asphaltic concrete or portland cement concrete. Pave-ments are supposed to wear out: a bitumen pavement isdesigned to accumulate fatigue and to progressively loseits smoothness. Rehabilitation restores it to its initial con-dition. Then the cycle repeats itself, so pavement wear offitself is not the problem. But pavements should not wearout prematurely, nor should they be left so long that reha-bilitation is no longer any use and they have to be recon-structed. It is the failure to maintain the roads that hascost some countries very large sums.

Maintenance includes all activities needed to keep aroad operating indefinitely:

• routine maintenance (restoring drainage,filling potholes and cracks, maintaining edges);

• periodic maintenance (resealing, about every5 years, to rejuvenate the surface); and


In feasibility studies assessing the economic value ofsealing pavements, it is assumed that proper routine andperiodic maintenance will prevent premature failure, thatpavements will be rehabilitated when they get too rough,and that they will not be left to deteriorate further until

they need reconstruction. These assumptions may be false,however. Sealing a pavement may be uneconomic: if sealedpavements are not properly maintained, they may be moreof a burden than a benefit to the economy.

2. The Struggle forMaintenance Money

Providing funds for road maintenance is a struggle,for many reasons:

• Pavements need preventive maintenance. Money isbest spent on maintaining pavements before theneed is apparent: the right time to reseal is beforedeterioration is obvious to a nonexpert. As bitu-men oxidizes, pavements become brittle and startto crack. At the early stage of cracking, a resealwill rejuvenate the surface and restore its elastic-ity. Once cracks are obvious, a reseal will nolonger work: the cracks are too big and will comethrough the new seal, reappearing on the surface.Cracks let in water. Water softens the road baseand causes the road to break up. Clearly, it is bestto reseal early. But it is difficult to secure fundingto repair pavements that do not (yet) look broken.

• Capital bias. Even when the road budget isadequate for proper maintenance, maintenancecan still be inadequate, because of capital bias.– Politicians want to build new roads. Capital

expenditure and ribbon cutting win morevotes than keeping roads in good condition.In fact, letting pavements collapse winsvotes—when they are rebuilt. The publicmistakenly thinks the remedy for bad roadsis renewal, not maintenance.

II. THE FACTS

3 Harral, Clell, and A. Faiz. 1988. Road Deterioration in Developing Countries—Causesand Remedies. Washington, D.C.: World Bank.


– To engineers, maintenance is not glamorous.They are trained to design and to construct,and do not consider maintenance their mis-sion in life.

– “Rent seeking” favors capital bias. In coun-tries where corruption is endemic, capitalprojects provide opportunities to divert largesums of money.

• Rehabilitation is classified as capital spending. Eventhough rehabilitation is part of road maintenance,accounting conventions treat it as capital spend-ing, because it is costly and has a long life. Reha-bilitation projects then join the list of candidatesvying for inclusion in the capital budget orinvestment program. Rehabilitation should havepriority, but does not.4

• Equity and fairness: unmaintainable roads. Some-times spending money to maintain, e.g., reseal,an access road to a village seems unfair, when aneighboring village still has no all-weather accessat all. It may even be government policy for allvillages to be given all-weather access. But build-ing more roads is foolish if it means letting thosealready built deteriorate due to lack of mainte-nance. Good care needs to be taken of what hasbeen built. New roads should be added only whenthere are funds available to do so. This point canbe extended to roads that are no longer main-tainable: those that have deteriorated to a stagewhere the only sensible remedy is reconstructionof the pavement. For such roads, resealing or re-habilitation is a waste of money. No matter howunfair it may seem, these pavements should beallowed to deteriorate further, until there are fundsfor reconstruction.

A conclusion from these observations: unless a cul-ture of (preventive) maintenance can become entrenchedin a country, road maintenance and improvements, i.e.,new roads, should not be funded from the same pot.

3. Road Maintenance—GoodBusiness for the RoadAgency?

Does the road agency make more money maintainingthe road or letting it deteriorate and rebuilding it?

To encourage proper maintenance, lenders, that is, the mul-tilateral banks and bilateral aid providers thatunderwrite such projects in the developing world, arguethat road agencies cannot save money by spending lesson maintenance; if roads are not maintained, the assetswill eventually be lost and expensive reconstruction willthen be needed. For purpose of illustration, assume rou-tine maintenance is always done. Now considertwo cases.

• The road is resealed at 5-year intervals, each resealcosting $15,000/km; and is rehabilitated after15 years, at a cost of $60,000/km.

• The road receives no maintenance at all andis reconstructed after 20 years, at a cost of$200,000/km.

If the agency attends to routine maintenance (fillingpotholes, maintaining pavement edges, etc.), but neglectsperiodic maintenance and rehabilitation, it may indeed saveenough money to pay for reconstruction when it is even-tually needed. This assumes the money saved producesbenefits elsewhere (say, a 12% annual discount rate, in theexample above). At that rate, these two cases are equal incost. Thus, from the point of view of the road agency orfinance ministry, it may be good business to cut back onmaintenance. The cost saving may not be permanent—since the road will eventually need expensivereconstruction—but at least the expenditure is deferredfor many years.

If this is indeed the understanding of governmentagencies, it is no surprise that lenders’ warnings thatneglect leads to expensive reconstruction have not worked.Governments have not rushed to allocate more funds tomaintenance because they know, from long experience ofunderfunding, that the road system still functions. Lend-ers’ alarms, and governments’ reaction to it, suffer fromthe same flaw: both sides recognize only the costs of theroad agency. But the road agency is only one party in theroad system. The road system includes road users, whobenefit greatly from proper maintenance.

4. Road Maintenance—GoodBusiness for Road Users

The picture changes when road user costs enterthe calculation. Maintenance is very good businessindeed for road users. Technical publications often citethe statistic that for every additional $1 a developing coun-try spends on road maintenance, road users save $3. Thus,the compelling argument for proper road maintenance isthe benefit to users, and thus to the economy.

4 At first sight, misclassifying rehabilitation as capital spending seems to give it anadvantage, because of capital bias. But since capital bias does not mean all capitalworks are funded, this is not necessarily the case.

The Facts 5

5. Toll Roads Benefit Road Users:Implications for RoadAgencies and Governments

On commercially operated toll roads, inadequatemaintenance is not a problem. The tolls users pay are usedfor maintenance, and a toll road attracts road users becauseusers know that even though they pay for their use of theroad, they save money because the road is more efficient.Toll road maintenance recognizes users’ costs; if the tollroad operator failed to recognize users’ costs, it would losebusiness—and money.

Unfortunately, since only highly trafficked roads inspecial circumstances can be converted to toll roads,most roads must remain in road agency care. This placesan onus on the road agency to behave as if it were a com-mercial operator of toll roads. The road agency shouldregard its custody of the roads as providing a service toroad users.

Some implications of this analysis become clear:• The road agency needs the analytical ability to

make decisions that take account of road users’costs;

• User involvement in road administration wouldhelp ensure that road user needs and costs areproperly taken into account; and

• Since users are the main beneficiaries of properroad maintenance, users can afford to pay forproper maintenance.

Why should road users pay? The added expenditureneeded to maintain roads properly is considerably less thanthe added benefit of proper maintenance. Since road usersare the ones who enjoy the benefit of proper maintenance,road users can pay the extra cost and still be better off.Road maintenance is not a heavy burden on the nationand economy. The fact is that spending too little on roadmaintenance is an even greater burden on the economy.Unless the nation has too many roads, or roads of the wrongtype, proper road maintenance is an enormous overall sav-ing to the nation.

6. What is Proper Maintenance?Wealthy developed countries that use economic analy-

sis to decide road expenditures typically use discount ratesbetween 7% and 10% per year. For example, New Zealand,with a GDP per person that is 10 times that of mostDMCs, uses 10% and requires a benefit-cost ratio well inexcess of unity—in recent years around 4.5. Thus, to befunded, road works have to show an internal rate of return

far in excess of 10% per year: the implicit discount rate is28% per year.5

The internal rate of return used by ADB and otherlenders is generally 12%. Yet the implicit discount rate usedin New Zealand, which can afford—and has—good roads,is far more testing. A similar, more realistic discount ratewould be appropriate for DMCs. In practice, roadimprovement projects in DMCs would commonly pass a28% test. And projects that reduce a maintenance back-log can produce an economic internal rate of return(EIRR) of more than 100%. But pavement managementsystems do not work this way. They do not propose projects,then test them using an EIRR criterion. Pavement man-agement systems reverse the order. A discount rate is struck(usually 12% per annum) and all projects that exceed thatthreshold are selected. In other words, every expenditureall the way down to 12% is selected, and hence qualifies tobe funded.

This is excessive. As a result, pavement managementsystems can generate maintenance budgets withoutcredibility—for example, budget requirements more than10 times what historically has been spent. Such results givefinance ministries no confidence in the scientific foundationof pavement management systems. It is not surprising thatroad agencies have difficulty making a credible case formore funding. It is true that pavement management sys-tems can be constrained to derive a program of works tofit a given budget, but this is the wrong way around. Theeconomically justified budget should be derived from thepavement management system, not given to it.

The problem is the discount rate. Using a discountrate of 12%, a DMC could produce an almost endless listof worthy projects in roads, aviation, ports, health care,education, water supply, sanitation, and so on. Morereasonable is a discount rate of 20–30% per year, whichproposed investment projects commonly achieve anyway.The lower a country’s GDP per person, the higher shouldbe the discount rate, to reduce the list of projects to whatthe country can afford. What this would mean for roadmaintenance is that pavements would be allowed to getrougher before they are rehabilitated: for example, threereseals, rather than two, before rehabilitation.

This conclusion is supported by a comparison ofvehicle fleets. New Zealand trucks and buses are modern,efficient, and expensive to buy. To justify expensive tech-nology, vehicles achieve high travel distances:6 line haul

5 Over a project life of 20 years, and assuming benefits to increase with traffic growthat 4% per year.6 The cost of vehicle operation includes the cost of financing the vehicle purchase.The greater the distance travelled, the greater the number of kilometers over whichto spread the financing cost. As a result, the higher the annual travel distance, thelower the per-kilometer cost of operating the truck.


operations can achieve up to 1,000 kilometers (km) a dayat speeds up to 100 km per hour. In DMCs, vehicle tech-nology is less sophisticated and road alignments may notpermit high speeds, so smooth roads are unlikely to pro-duce as many benefits as in New Zealand. The optimallevel of pavement smoothness is not as demanding inDMCs as it is in developed countries.

In principle, proper maintenance could be defined asall work that users value and are willing to pay for.The discount rate approach is the technician’s way ofestimating what users value. In the light of the foregoing,proper maintenance could be regarded as all work shownto be worthwhile at an annual discount rate of, say, 25%per annum.

Using a high discount rate such as 25% makes it dif-ficult to argue against doing all the maintenance that meetsthis test. But there is reluctance to break ranks and en-dorse the use of a discount rate other than 12% per year.Making the test a benefit-cost ratio of 3, say, at a 12%discount rate, might be a compromise solution—if thecomputer program allows benefit-cost as an option. Thecomputer programs usually allow a budget constraint tobe specified, in which case the best options at 12% can beselected subject to the constraint. But to specify the bud-get constraint is to put the cart before the horse. The pointof using a discount rate such as 25% is to find out whatshould be the budget constraint. Using a high discount rate,just for maintenance, remains the soundest approach.

7. Computerized PavementManagement Systems

Computerized pavement management systems, suchas those based on the Highway Design and MaintenanceStandard Model (HDM3) developed by the World Bankand its successor, the present industry standard HighwayDevelopment and Management System (HDM4), devel-oped by the World Bank, ADB, and others, have been inuse for many years. These systems are complex and requiremeticulous care to avoid data input errors. Finance minis-tries tend to be mistrustful of black box pavement manage-ment systems, especially those that claim to justifyenormous increases in funding. Finance ministries do notrealize that extravagant budget demands are caused by theinput data (specifically the discount rate), not the com-puter system.

Irrespective of whether the black box is trusted, itcommonly does not survive for long. The life of a com-puterized pavement management system is often short.The lender installs the black box, then the recipient coun-

try sidelines it by starving it of money, failing to updatethe database, transferring trained staff, and allowingvehicles to be commandeered by unauthorized persons.

Even if the system survives, the database may not beupdated accurately and regularly.7 Whatever the systemof managing pavements, data must be collected regularly.For the computerized versions, strict adherence to loca-tion reference points must be maintained—a requirementthat is easily violated. In many countries, it is difficult tobe confident of data accuracy.

Some DMCs claim that the data collection to updatecomputerized systems is too onerous, and with some rea-son. Data collection is repetitive and monotonous, but it isnot a menial task. Giving clipboards to villagers (or evendepartmental staff) and returning a week later producestraffic counts of unknown reliability. To ensure accuracyand integrity of the database, a senior person with dedica-tion and authority must pay close attention.Tedious data collection is prone to error and, worse, tofaking. Visual surveys of road condition are subjective,even for engineers instructed in the procedure. Producinga reliable data set demands dedicated attention to detail,checking, crosschecking, data validation—and the re-sources to do a good job.

Data collection is vulnerable to budget cuts, eventhough the cost is small in relation to the large sums ofmoney that are spent on the basis of this information. Thissuggests contracting out data collection for, say,5-year periods. Contracting data collection identifies thisas a budget item that must be funded, because there is acontract to honor. Contracting out data collection has an-other benefit as well. It creates pressure to produce qual-ity information. The contractor is accountable for thequality of the information and bears the cost of remediesfor any errors and omissions.

Contracting out the whole pavement managementsystem, rather than just data collection, would make thepackage more attractive to competent consultants. Con-tracting the whole system increases the incentive to guar-antee the honesty and integrity of the database. Theconsultant would be responsible for maintaining the system

7 Maintaining the database is demanding, even in the most developed countries, asreported in a recent study in New Zealand, which has had such a system since the1980s (Bennett, Christopher. 2001. Evaluating the Quality of Road Survey Data.Transfund New Zealand.). There were problems within databases, such as poor lo-cation referencing, changes to the locations of inspection lengths, and inconsistentlane identification. In general, the state highways achieved much better consistencythan local authority roads, perhaps reflecting the higher quality assurance standardsof state highway surveys, or the use of the same contractor for extended periods oftime. Maintenance presented a particular problem, since it changes the condition ofa pavement. Unfortunately, resurfacings and overlays/shape corrections were not re-corded reliably. Changes in pavement condition indicated that a treatment was per-formed, but the treatment was not in the database.

The Facts 7

and ensuring backup in the event of technical difficultiesor staff losses. To this end, a local consultant might enterinto a cooperation agreement with foreign consultantsexpert in the field.

8. Lenders as Part of theProblem

By financing improvements or new roads, lenders addto the maintenance burden. In recognition of this, somelenders insert loan covenants that the new roads will beproperly maintained. Even if the country complies, how-ever, the underlying intent is not met if money used tomaintain the new road is diverted from maintenance ofother roads, which then go without maintenance.

Lenders usually insist on counterpart funding, on thegrounds that this gives DMCs a sense of ownership of theproject. DMCs are obliged to meet their share of the cost,even in times of fiscal austerity when government spend-ing has to be cut. If lenders do not permit cuts in theirprojects, and if there is little other road improvement workthat can be foregone, cuts have to be made in maintenance.Later, the DMC becomes open to criticism for notmaintaining its roads.

9. Should Lenders FundMaintenance?

Over the years, lenders have become more and moreinvolved in road maintenance. In recent years, large sums

have been lent to DMCs for road maintenance, particu-larly rehabilitation.

Why road rehabilitation? To draw an analogy with atruck: rehabilitation is akin to removing the engine andreconditioning it; periodic maintenance can be likened torunning repairs; and routine maintenance is lubricationand refueling. Lending money for routine maintenance islike lending money to buy fuel for a truck: a short timelater there is nothing to show for it—except the liabilityfor the loan.

Initial construction of a road—entailing earthworks,structures, and a pavement— is capital investment, whichmight not be made but for foreign assistance. Once theinvestment is made, however, the country concerned oughtto be able to maintain the investment. If the country can-not afford to maintain it, the country cannot afford to obtainit. Rehabilitation is maintenance, and should have no moreclaim to loan financing than periodic and routine mainte-nance. It is true that for any specific road, the cost of reha-bilitation is lumpy, like an investment in road improvement,but that is not so for a road network, over which pavementage distribution is spread. Like routine maintenance,rehabilitation expenditure should be fairly consistent fromyear to year.

Lenders nowadays find themselves giving loans forpavement rehabilitation, especially where the pavementsconcerned have suffered accelerated deterioration throughinadequate maintenance. A loan to clear a maintenancebacklog can be justified only once, on the understandingthat this is a last chance and that adequate budget provi-sion for maintenance will be made in future.

The Facts 9

In 1988, the seriousness of the road maintenance prob-lem was revealed by a study of 85 countries that havereceived foreign assistance for roads.8 Funding for

road maintenance had been so inadequate that reconstruc-tion was now needed for a quarter of the main paved roadnetwork and a third of the main unimproved network.Expenditure of more than $40 billion could have beenavoided by spending $12 billion on maintenance.

Lenders identified several reasons for this state ofaffairs:

• Road budgets were insufficient. In the contest forlimited government funds, roads competed withrival needs such as health care and education.Government budget setting tended to follow pre-cedent, preserving (or even cutting) past budgetshares at a time when vehicle ownership and usewere expanding rapidly, and roads required anincreasing share of government expenditure.

• Pavements need periodic maintenance well before theystart to break up. To the casual observer, a pave-ment that is starting to crack will look to be ingood condition, whereas the road engineer knowsit will soon start to break up unless the pavementis resurfaced promptly. It is difficult to win bud-get support for fixing something that does notappear to be broken.

• Road management was weak and work practicesinefficient. More should have been achieved withthe funds being spent.

• Maintenance funding decisions recognized only roadagencies’ costs. The costs of road users were not counted.The level of road expenditure has a markedeffect on road users’ costs. If travel time is doubledbecause of poor roads, twice as many vehicles are

needed to do the job. Up to a certain point, spend-ing more on roads saves money: the savingsachieved by users exceed the extra spent on theroads.

• Road users had little or no voice in decisions on roadfunding. Road user lobby groups have a strongvoice in advanced economies, but are usually intheir infancy in developing countries.

To combat the problem, lenders have sponsored manyconferences and workshops in developing member coun-tries (DMCs) to raise awareness of the problem and togain consensus from stakeholders on actions needed toremedy the problem. In spite of these efforts there has beenlittle change.

It seems that DMCs will comply with lenders’ encou-ragements to study the problem and to develop solutions.Workshops are held. Studies are undertaken. Needs areidentified. Legislation is drafted. But the legislation nevergets passed. DMCs will walk the road to reform but, atthe end, few will take the final step to implement change.Lenders have funded numerous studies of maintenanceneeds that have identified the maintenance backlog. Lend-ers have also funded technical assistance (TA) projects oninstitutional strengthening, and set up pavement manage-ment systems and bridge management systems, but withlittle lasting effect. Pavement management units areunderfunded, databases are not kept up to date, surveyvehicles disappear, and trained staff members leave forjobs that give them the opportunity to augment their sala-ries with informal income. Corruption distorts decisionmaking and saps value from the monies allocated to roadmaintenance.

Lenders fund pavement rehabilitation to clear themaintenance backlog, only to see other roads slipping intothe same state for the same reason, namely lack of timelymaintenance. This is the road agency’s poverty trap. It iscreated when more roads are built, or are improved to the

III. THE LENDERS’ PERSPECTIVE

8 Harral, Clell, and A. Faiz. 1988. Road Deterioration in Developing Countries—Causesand Remedies. Washington, D.C.: World Bank.


wrong standard; or when politicians approve only black-top roads, even though these are expensive to build andmaintain, and are rougher than gravel roads whenneglected; or when politicians fail to recognize that someroads are no longer maintainable—i.e., periodic mainte-nance would be a waste of money and these roads shouldwait until they can be reconstructed.

To lenders, the road maintenance problem has a tech-nical solution based on objective decision making. This isnot always the perception of DMCs. The DMC view-point can be at the other end of the scale from the lenders’viewpoint.

Road Funds and Road Maintenance 11

Developing member countries (DMCs) differwidely, and there is no single DMC view. Thefollowing points apply at least to some DMCs,

but not necessarily to all.For many DMCs, the decision-making process is

intentionally subjective and political, based on consensus.Decisions require discussion, committees, and compro-mise. Western-style rational decision making is not thenorm. Roads are regarded an essential public service, nota business. Accordingly, rational economic decision-making rules may be inappropriate.

Fairness and sharing prevail over other decision-making rules. That it is the turn of the next village to get apaved access road is more important than that it is neces-sary to maintain what is there before adding to the main-tenance load, which is the rational view. Fairness is forpoliticians to judge, hence the allocation of road funds is apolitical process. A rational approach to allocation wouldforce politicians to forfeit some of their power to technicalpeople. Resentment can result from lenders’ loan covenantsand TAs that attempt to make rational decision makingthe norm.

Many DMCs do not have a culture of maintenance.Countries that lack a culture of maintenance repair roadswhen they fail. They do not perceive the advantage of

preventive maintenance undertaken before there is a needfor repairs. Sometimes, preventive maintenance is eventhought to be a waste of resources. The belief is that pave-ments are designed to be rehabilitated after a certain time,irrespective of whether maintenance is done. It is not un-derstood that pavement design assumes ongoing mainte-nance, and that neglect of maintenance leads to a prematureneed for expensive rehabilitation.

At the other end of the spectrum, some countries callperiodic maintenance “preventive maintenance,” showingclearly that they understand its value.

Some DMCs see maintenance of roads as a heavyburden on the nation and economy. They appear not todistinguish between the government and the nation as awhole. Thus they fail to see that not maintaining the roadsis an even heavier burden, which falls on road users.

Perhaps the concern over a heavy burden is also a dis-tributional issue. It may be thought that the cost of roadsfalls disproportionately on the poor. Some DMCs alsoexpress concern for the inflationary effects of increasingthe budget for roads. All these pose many challenges forlenders. Cultural and political systems will not change justfor road maintenance. Solutions must be foundthat work within the systems and cultures of the countriesconcerned.

IV. THE DEVELOPING MEMBERCOUNTRIES’ PERSPECTIVE


1. To Earmark or Not to Earmark?

Many developing member countries have beenencouraged by lenders to earmark, orspecifically designate, road user charges, or

some portion of general government revenues, to fund roadmaintenance.

When pressed to adopt earmarking, DMCs oftenresist, promising to do better within the government’sexisting budget processes. Such promises give lenders littlereason for optimism. A government’s pledge to provideadequate funds does not commit succeeding governments,and the many pressing calls on government general rev-enues make it a difficult pledge to keep. The evidence isthat, without earmarking, there is only a small chance ofDMCs’ consistently allocating sufficient revenues to meetroad maintenance needs. In spite of the evidence, a DMCis likely to argue that it is different and that it will succeedwhere others have failed. Unfortunately, a DMC that takestime to test alternatives to user charges is likely to redis-cover that alternatives do not work. Time will have beenwasted and roads may have deteriorated further.

Finance ministries commonly object to earmarkingon the grounds that it curtails their fiscal flexibility. TheInternational Monetary Fund (IMF) may support, or evenencourage, this objection. The argument is that, in timesof fiscal austerity, all tax handles should be available to cutexpenditure. Yet the IMF’s Public Expenditure Handbook9

recognizes there can be benefits from fiscal rigidity. It alsoapproves of earmarking where there is a strong linkbetween the payment and the service provided. On both

counts, earmarked funding for road maintenance can be agood thing.

If the real concern is that the road sector is demand-ing too large a share of government funds, a clear distinc-tion should be made between network maintenance andnetwork improvement. Road maintenance should be takenout of the government budget process and should befunded from dedicated revenues, whether derived by ear-marking or from user charges.

2. Which Roads to FundIn some countries, the national road network is the

prime concern: the secondary network is simply seen as feed-ing the national network, and thus the emphasis should beon the national roads. The weakness of this viewpoint isthat user charges are paid by all road users, not just thosetraveling on national highways. Those who do not usenational highways pay but receive nothing in return. Rev-enue—user charges from gasoline sales, etc.—from the useof secondary roads all goes to national highways.

There is no practical reason why dedicated usercharges should support only national roads. On the otherhand, if all roads are maintained by revenues from usercharges, there will be a massive transfer of money frombusy highways and urban streets, which generate the bulkof the revenue, to low-traffic rural roads that generate littlerevenue. This is the reverse of the imbalance that arises ifuser charges fund only the national network.

There is an intermediate solution. Roads come in manyforms, from publicly provided multilane expressways downto privately owned cart tracks. At the extremes, there is nouncertainty as to the role of dedicated user charges. Theprimary national network can claim full support from dedi-cated charges, while privately owned tracks have no suchclaim. But where, in the wide spectrum between these twoextremes, does the transition take place?

V. THE CHALLENGES

9 Chu, Ke-young, and Richard Hemming (eds.). 1991. Public Expenditure Hand-book: A Guide to Public Policy Issues in Developing Countries. Washington, D.C.: IMF.Pp. 149–151. The conditions under which earmarking is likely to be beneficial areanalyzed in Potter, Barry. 1997. Dedicated Road Funds: A Preliminary View on a WorldBank Initiative. IMF Paper on Policy Analysis and Assessment. Fiscal AffairsDepartment. Washington, D.C.: IMF.


An answer can be found by distinguishing betweenthe two main benefits that roads provide: mobility andaccess. Roads provide mobility to road traffic and accessto frontage properties. With this distinction, it is possibleto rate roads according to their benefits: x% mobility andy% access. Limited-access expressways confer no accessbenefits and are rated 100% mobility and 0% access. Tracksthat benefit only the few who live along them are rated 0%mobility and 100% access. Other roads fall somewhere inbetween.

Funding road maintenance can be made a sharedresponsibility between road users, who gain the mobilitybenefit, and property owners, who gain the access benefit.Each pays in accordance with benefit percentages. Dedi-cated road user charges fund only that portion of roadmaintenance indicated by the mobility percentage rating.The access portion is met by property owners, which inpractice means local authorities, who tax property ownersand pay on their behalf.10

3. How to Make PavementManagement TechnologyLocally Sustainable

It is difficult to generalize from the experience of com-puterized pavement management systems in developingcountries. At one extreme, they are initially adoptedenthusiastically by the engineers in the road agency. Onthe other hand, the road agency does not want to changeand the system is pushed aside following departure of theteam that installed it. And there is a range of experience inbetween. There are systems that work as they should atday one, but sooner or later fall into disuse, perhaps throughneglect of the database. Simplified systems have been tried,but these rob the pavement management system of muchof its power and usefulness. To justify the effort and costof maintenance, it helps if the computerized system is fullyfledged.

Pavement management systems do not have to be com-puterized. Manual systems were in use long before com-puters. Pavement management was based on sets of rulestempered by engineers’ judgment. Today, a rules-basedpavement management system can be developed more sci-entifically by setting up a computerized system for thepurpose. The computerized system analyzes representa-tive cases and develops a detailed set of intervention rules.The engineers in the field use these rules (tempered by

engineering judgment) for a few years, after which theperformance of the system is reviewed and the rules revisedif necessary.

Whatever type of pavement management system isused, it will achieve little unless the field engineers con-trolling the work find it helpful. In practice, however, theengineer in the field may feel at loggerheads with a com-puterized system, centralized at a head office, which dic-tates what needs to be done. Nowadays, computerizedsystems need not be the prerogative of engineers at thehead office: the Internet makes it easy for field engineersto access centralized systems. Once they experience theirusefulness, the field engineers become a constituency insupport of the system. They will appreciate the importanceof up-to-date, accurate data. Through self-interest, theywill be vigilant about maintaining the database.

This is the optimistic picture. In reality, the success ofcomputerized systems depends on more than Internetaccess. It depends critically on enthusiastic support byindividuals in a position to make things happen. Successalso depends on whether the people operating the systemare satisfied with their lot. They need recognition in termsof status and salary. In countries where salaries are low, itcan be difficult to persuade competent people to acceptthe isolation of technical positions at a head office, withuncertain prospects for promotion.

The challenge is not only how to make computerizedsystems work. It is also when to decide it is wise to take astep back from this level of sophistication and use rule-based methods instead.

4. How to Involve StakeholdersIn general, customers demand and expect their sup-

pliers to give them quality and service. Road users are noexception. If road users pay for maintenance through dedi-cated user charges, they should expect their suppliers todeliver the standard of maintenance they want, and forwhich they are willing to pay. The slogan “User pay, usersay” encapsulates the point.

Traditional road administrations used to take the atti-tude that they were doing road users a favor: users shouldbe grateful for the standard of roads they get; users haveno right to complain; roads are just one of many publicservices the government is doing its best to provide.

With such attitudes prevailing, it is not surprising thatdecisions were based on road agency costs alone, with littleor no account taken of users’ costs. In the absence of acustomer-supplier relationship, there was little incentiveto give value for money. Such systems were flawed andinefficient—from planning and budgeting through to theexecution of the work.

10 Rating roads in this way is subjective. New Zealand adopts an uncontentious 50%and 50%, on average. Wealthy urban local authorities pay more than 50%; sparselypopulated remote areas pay less.

The Challenges 15

With a move to encourage users to pay, the challengeis how to introduce the concept that users have a say.” Thefirst question is, who are the users? The list of stakehold-ers that have something to gain or lose is extensive. Thefollowing are some of the representative groups:

• chambers of commerce,• industrial and mining associations,• agricultural groups (farmers, herders, plantation

owners),• tourism and hospitality industry,• motorists’ associations,• truck operators’ associations,• bus operators’ associations,• bus users’ associations,• taxi associations,• groups and nongovernment organizations

(NGOs) with special interests (pedestrians, cy-clists, poverty, environment),

• scientific and academic institutes,• professional associations (consulting engineers,

lawyers, environment groups), and• contractors.As the list illustrates, the users are not just vehicle

operators. For example, in the case of truck traffic, com-merce and industry have the most to gain from good roadmaintenance. Since transport costs are passed on to thecustomer, the truck owner’s main concern is that the com-petition faces the same costs. To the truck owner, fair com-petition is more important than whether operating costsrise or fall. Suppliers, such as construction contractors,have different incentives from those of users. They have astake in the performance of the road agency, but that stakeis not due to “User pay.”

If road maintenance is funded by dedicated chargespaid directly by road users, efficiency gains can be made ifa customer-supplier relationship can be established, emu-lating the marketplace through involvement of road us-ers.

5. How to Maintain NationalCommitment

Reform of and funding road maintenance takes years.In that time, there is a risk that a government’s resolve toimplement reform will change. A government cannot com-mit future governments. And in government departmentswith weak corporate memories, new incumbents maydeliberately contradict the decisions of their predecessorsas a means of stamping their authority on an administra-tion. The challenge is to get the key players to commit

themselves to agreed targets and then to hasten the pace ofchange. The faster the implementation, the fewer the op-portunities for a change of mind.

6. How to Preserve LenderInterest in the Road Sector

Lender funding of roads in developing countries hasbeen, at best, a mixed success. When roads are not main-tained properly, the forecast benefits that justified the origi-nal investment are not fully realized. In some countries,lender efforts have been so unrewarding that lenders havewithdrawn from the road sector. Decades ago, the chal-lenge was to determine where best to direct lender efforts.Today there is the added challenge of how to maintainlender interest in the road sector, in the wake of the sector’sdisappointing performance.

Many countries, in seeming contradiction to their lackof care of their roads, still regard roads as an engine ofeconomic and social development. Road network devel-opment is high on their list of priorities, but road mainte-nance is, at best, very low on the list. For most lenders,road maintenance is high on the list of priorities; reformof road maintenance comes before new or improved roads.

To maintain lenders’ interest in the sector, road main-tenance has to be brought up to standard. To do that, someof the following steps have to be taken:

• Allocate money for proper maintenance. Winningsufficient funding for maintenance facesobstacles. One is competition from other sec-tors—and roads should have to compete, but forcapital, not for maintenance. Another is capitalbias—a preference for development over main-tenance. Third, the road sector case for improvedfunding may suffer from a credibility problemon the part of the finance ministry.

• Spend money allocated to maintenance on maintenance.Money can be allocated but not spent because itis not disbursed in time for it to be used in theconstruction season, or it is raided for otherpurposes, or it is misappropriated.

• Spend money efficiently. Maintenance planningneeds to be systematic, and based on objectiveeconomic principles, for the benefit of all ofsociety.

• Spend money effectively. Carry out maintenancecompetently, without extravagance or waste. Thismay entail such things as more competitive bid-ding, institutional strengthening, support for theconstruction industry, etc.


7. Challenges to LendersEvery government needs help—to evaluate, choose,

and implement systems that ensure adequate road main-tenance. Past attempts, in a range of countries, to placeroad maintenance on a sound footing have produced avaluable body of knowledge and experience. What worksand what does not work is by now well known. In manycountries, consultants have been engaged to guide gov-ernments contemplating reform, yet the results have beendisappointing. As noted in the section on the lenders’ per-spective, history shows that many DMCs will walk theroad to reform, but few have taken the final steps to imple-ment change.

a. Choose enforceable loancovenants and enforce them

Recently, there have been signs of progress in coun-tries faced with lender resolve not to lend more money tothe road sector until reforms are implemented. Lendersdo not like being heavy-handed, but threats seem to work.Assurance of adequate road maintenance is often a loancovenant, but it is not enforced. The challenge to lendersis to include only those loan covenants they are preparedto enforce, and then to have the resolve to enforce them.

b. Provide Appropriate andConsistent Technical Assistance

Another challenge to lenders is to provide technicalassistance that works. Often, the assistance takes the

following course: a consultant works for several monthson justifying change and preparing an implementationplan; seminars and workshops are conducted along theway; and the final report is a blueprint for change, writtenin a style to suit the lending agency. The consultant leavesand the process, lacking impetus, stalls.

Such hit-and-run technical assistance is not effective.Reform takes years. Funding changes may require newlegislation, which usually cannot be hurried. During theprocess, government officials may change and theconsultant’s report may need updating. Long-term andsustained, but flexible, lender help is, therefore, needed.Full-time consultant assistance is not appropriate: there isnot enough to do, and anyway, the task of implementationshould fall on government officials. If the consultant isboth long-term and full-time, the consultant will end updoing the work, diminishing government ownership of theprocess and government corporate memory of the reforms.What is advisable is technical assistance that can step inquickly, on demand, when and where it is needed.

c. Be Consistent

The challenge to lenders is thus largely one of lenderconsistency. Lenders need to enforce loan covenants, moni-toring their fulfillment in the long term. They need toensure that technical assistance does not end with the pro-duction of a report that meets lender expectations. Tech-nical Assistance needs to be sustained.


VI. A SOLUTION THAT WORKS

The RMF fully funds maintenance of the nationalroad network. The tariff level is set to meet a knownexpenditure requirement, not the other way around. (Inother words, RMF expenditure should not be determinedby the revenue the tariff produces.) Funding of lesser roadsshould probably be shared between the RMF and localgovernments. From time to time, expenditure requirementswill change, prompting an adjustment to the tariff. TheRMF might be given qualified powers to change the tar-iff, perhaps on a no-objection basis after submission to thegovernment.

The road tariff must be levied directly on road users.The tariff typically has two parts: a fee for access and a feefor use. The access fee is time-related, usually a vehiclelicense purchased annually, giving the vehicle the right touse the roads. The usage fee is distance-related, usually alevy on fuel, so vehicles that travel more pay more.

The road tariff should try to mirror maintenance costs.Some costs are related to road use. Pavement maintenanceis an example. Since trucks cause more pavement wearthan cars, the usage fee for heavy vehicles shouldbe higher. Some costs are related to weather and thepassage of time. Drainage maintenance is an example.These costs should be met by the access fee because it istime-related.

The RMF should collect the revenues and disbursemoney to the road agency, subject to the agency’s comply-ing with RMF conditions designed to promote value formoney. RMF conditions might include use of economicanalysis to justify pavement rehabilitations, quality assur-ance (QA) systems,11 and a degree of contracting out. TheRMF should not take over any functions of the road

11 Quality Assurance (QA) is a system by which auditing processes ensure qualityrather than the checking of each and every output. For example, safety checks of atrucking firm would focus on the firm’s procedures for driver selection, training, andmonitoring, rather than on the drivers themselves. QA is the subject of the ISO 9000series of standards published by the International Standards Organization.

1. Establish a RoadMaintenance Fund

A solution to the problem of long-term sustainablefunding of road maintenance is to introduce user chargesand to establish a Road Maintenance Fund (RMF) tomanage the collection and expenditure of the revenues.See Appendix A.To this end, it is necessary to create acustomer-supplier relationship that emulates the market-place. To do this, road users must be heavily involved inthe RMF: the RMF should be governed by a board madeup of persons selected for their commitment to achievingvalue for money for road users, plus government officialsto represent the broader national interest. Day-to-dayaffairs of the RMF can be managed by a small secretariat.The RMF should be an independent body, preferably oneestablished by an act of parliament.

Dedicated road user charges can be thought of as aroad tariff—a fee for road maintenance services under-taken for the benefit of road users. It should be like payinga road toll, without toll booths. The road tariff is expectedto be the RMF’s only source of revenue, making the RMFindependent of the consolidated revenue fund (CRF), i.e.,the government budget.

Transferring road maintenance funding to the RMFshould be neutral to the government’s CRF, which wouldlose the responsibility, but would also lose by earmarkingexactly that amount of revenue represented by some of thetaxes formerly paid by road users to the CRF.This level of earmarking is likely to be insufficient to funda proper level of maintenance; the earmarked taxes willneed to be raised or new charges added. When this hap-pens, the newly earmarked taxes must be labeled as “usercharges” to make it clear that they are part of the roadtariff.


agency, which would carry out the same functions asbefore, but might have to improve its performance.

An important task for the RMF is to make publiclyavailable, and to actively disseminate, information that al-lows road users to see where the money is spent and whatis achieved. This engenders user support, which is essen-tial when charges have to be raised.

The RMF does not operate in a competitive environ-ment and cannot be made bankrupt. Thus, the affairs ofthe RMF must be fully transparent. The government willbe well informed, due to the presence of government offi-cials on the board, but that is not enough. An annual reportand audit should be presented to parliament. In addition,every few years technical audits could be undertaken byinternational consultants, and made public. In some coun-tries, the RMF produces weekly programs on radio andtelevision to actively publicize its work. The Internet is anefficient and effective means of making information onroads and the RMF publicly available. The informationshould include time series data on the state of the net-work, so people can see whether the network is improvingor deteriorating.

At the beginning of this document, four causes of in-adequate road maintenance were identified. Dedicatedroad user charges, with an RMF to manage the revenues,are an effective response to all four:

• Money is not allocated (in sufficient amounts). Thelevel of user charges is determined by the expen-diture needs. Thus, there can be no shortfall inrevenue (to pay for justifiable maintenancerequirements).

• Money is allocated but not spent. The problem oflumpy flows of funds will not arise, since theRMF receives its revenue from user charges at asteady rate. The problem of funds being releasedtoo late to be spent in the fiscal year will be obvi-ated, since the RMF’s revenue cannot be spenton anything other than road maintenance, andsurpluses can be carried over to the next fiscalyear.

• Money is not spent efficiently. Efficiency is servedby RMF rules governing how road agencies pre-pare their works programs. Road agencies musttake an economic approach that recognizes thecosts of road users.

• Money is not spent effectively. Effectiveness is servedby RMF rules governing how road agenciesexecute their works programs, such as use of com-petitive bidding for contracts. Agencies will besubject to more transparent financial and technical

auditing, and may be obliged to introduce QAsystems.

2. Have the Finance MinistryPromote the RoadMaintenance Fund

A proposal to set up an RMF will usually have evolvedover a long period, typically in the following stages. Work-ing with the road agency, a TA study of the road sector iden-tifies areas in need of strengthening. One of these areas ismaintenance funding. A TA addressing road needs is un-dertaken to identify the maintenance backlog and to assessthe long-term maintenance funding required once the back-log is cleared. Lenders undertake to help with clearing thebacklog, but insist that the government take steps to ensureproper maintenance from now on. (Lenders want assur-ance that a backlog does not happen again and that roadusers benefit, as intended, from properly maintained roads.)To equip the road agency to plan road maintenance, a TAproject installs a pavement management system, trains per-sonnel in its use, and leaves behind the equipment neededto keep the database up-to-date.

In the above process, the road agency is the advocatefor change. Sitting in judgment are the finance ministryand others. It can be assumed that the finance ministry isaverse to losing control of even part of the road budget.The finance ministry’s concerns are magnified if the pave-ment management system produces extravagant claims forfunding. These issues serve to compound the financeministry’s habitual concern for the large amount of moneycontrolled by the road agency engineers. And now thesesame engineers are arguing that maintenance is under-funded. The finance ministry is reluctant to give them evenmore money to spend. To the finance ministry, it is likeappointing the poacher as gamekeeper.

For these reasons, the finance ministry opposes set-ting up an RMF. The finance ministry may be persuaded(or instructed) to cooperate in developing a proposal foran RMF, but it remains a powerful player that is inher-ently opposed to reform. This is why countries that takethe path to reform often freeze at the last steps, namely,giving the reforms the force of law.

There is an alternative approach.The finance ministry is the primary government

agency concerned about value for money. In every sector,a primary goal of the finance ministry is to promoteeconomic efficiency, promote effective implementation, andfight corruption. It follows that the finance ministry—

The Solution that Works 19

even more than the road agency—should be concernedabout sustainable roads. If the finance ministry looksbeyond the narrow monetary aspects of a road fund, it willsee many benefits from establishing an RMF:

• The RMF will impose a discipline on (i.e., exer-cise a supervisory role over) the road agency, in away the finance ministry cannot.

• Because it understands the needs of those who ben-efit from roads, the RMF is better placed than agovernment agency to promote economic efficiency.

• The RMF, by setting rules with which the roadagency must comply, can make implementationmore effective, e.g., by ensuring that at least aportion of the work is competitively tendered.

• By requiring financial and technical audits, theRMF will help combat corruption.

• The RMF will introduce QA to the road sector.From there, QA can spread to other governmentsectors. QA is poorly understood in developingcountries, most of which have difficulty even del-egating authority. The potential gains from del-egation and QA systems are enormous.

Examined in this light, the finance ministry shouldbe the promoter of the RMF. The RMF will accomplishmany things the finance ministry would like to see hap-pen, but has not been able to achieve. The RMF is moreclosely allied to the finance ministry than to the road agency.The RMF takes nothing away from the road agency, whichcontinues to do the same job as before—only better, as itmust comply with rules set by the RMF to winits funding.

3. Establish Locally SustainablePavement ManagementSystems

There is no alternative to computerized pavementmanagement systems, such as those based on HDM3,when extrapolating further than the next few years. Thereis no other practical way of forecasting pavement condi-tions many years ahead. Thus, computerized systems areessential for maintenance policy studies. As working tools,however, computerized systems are good only if there isan institutional ability to use them and an institutionalcommitment to maintaining them. The prime need is tokeep pavements intact. Rolling 3-year maintenance plansare sufficient for that, especially since accurate predictionis not needed for years two and three. The followingapproach can then be taken:

• Routine maintenance. Perform it thoroughly, as itis always economically justified (and is poverty-alleviating).12

• Periodic maintenance. When bitumen embrittle-ment risks widespread cracking, rejuvenate withfresh bitumen and a stone chip wearing course.

• Rehabilitation. As roughness accumulates, anduser costs increase, use economic analysis (at, say,a 25% annual discount rate) to find the right timeto restore pavement smoothness and durability.

Budgeting for routine and periodic maintenance needsonly simple rules and a database of pavement condition.The rules can be revised in line with experience. An an-nual roughness survey is one means of keeping track ofnetwork condition. For a properly maintained road net-work, the average condition of the network will not getbetter or worse.

4. Fund the Maintenance BacklogTo guarantee continued public support, the RMF

needs to show early results. Public support is more likelyif today’s road users are not burdened with the cost of pastmistakes. Removing maintenance backlog has to be fundedby government general revenues or loans. Road users willquickly see big improvements and will link them to theintroduction of road user charges (when in fact there is alag between introducing the charges and seeing widespreadbenefits from them).

It is better to clear the backlog sooner rather than later.But sudden removal of the backlog would cause lumpymaintenance needs in the future. If the whole backlog wereremoved in one year, a need to reseal all those roads wouldarise in about five years. If the backlog were removed overa period of five years, which is more likely, then the every-five-year reseals would be spread evenly and the problemof lumpy maintenance needs would not arise for 15–20 years, when these roads come up for rehabilitation. Bythen, the RMF should have been operating successfullyfor 15 years and could presumably be trusted to borrowon the commercial money market to cover the temporaryrise in funding needs.

12 In routine maintenance, cracks are treated before they get too bad and start caus-ing potholes. Pavement edges are maintained to prevent edge break. Drains are clearedand kept flowing freely; water under the pavement is to be avoided. Grass is cut, tomaintain a root structure and hold the soil together. Localized pavement failures aredug out and pavement is restored by hand methods using small mechanical equip-ment for compaction. Labor-intensive and poverty-reducing, routine maintenancetransfers income to rural areas, and is cheap.


5. Acquire Lender SupportIt is imperative that lenders support DMCs when they

commit themselves to reform road funding. Lenders canassist by helping fund the maintenance backlog. Theymight also help fund the RMF in the early years, so theRMF can be established initially with little or no increasein cost to road users, thereby winning their support. Over5 years, user charges could be ramped up and lender fund-ing could be phased out. Lender support such as this is abetter inducement to reform than loan covenants or threatsto suspend road sector lending.

In the past, lenders’ well-intentioned efforts to rem-edy deficiencies and clear the backlog of road maintenancehave been misdirected. Ad hoc support to DMCs has notworked because the countries themselves had no plan fora permanent solution. What is needed is a holistic solu-tion to

• clear the maintenance backlog;• fully fund road maintenance through dedicated

user charges;• set up an RMF board to manage the revenues

and monitor expenditure of funds; and• carry out an institutional strengthening program

to support the RMF in its early years and to helpimplement other elements of reform (such as bet-ter maintenance planning and use of economicdecision-making rules, introducing improvedmaintenance methods, reforming procurement,transiting from force account to contracting, pro-viding training and support for contractors, andeducating financial institutions in commercialbanking so they can provide capital support tosuccessful contractors).

All lenders active in the road sector of a particularDMC should cooperate and follow the approach. Imple-menting the road funding aspects of reform requires thefollowing steps, some of which may be concurrent:

• Reach agreement with the government– on the existence of a road maintenance

problem;– on an affordable share of resources to allo-

cate to roads, at a macroeconomic level;– that restoration of the network will be met

by government general revenue, or loans;– that maintenance (which includes rehabili-

tation) has first priority;– that maintenance will be funded by dedicated

user charges; and– that an RMF with statutory independence

will manage the revenue.

• Determine the level of the maintenance backlogand identify what maintenance needs will be on-going after the backlog is cleared.

• Decide on the form that the independent RMFshould take, and prepare for the required legisla-tive steps to introduce dedicated charges andestablish the RMF.

• Carry out an institutional review to determinewhat reforms are warranted, in addition to fund-ing.

• Reach agreement with the government, and alllenders active in the road sector, on an action planwith target dates to– establish the RMF;– provide funding for clearing the maintenance

backlog and providing transitional financefor the RMF;

– provide technical support for the RMF inthe early years;

– implement needed institutional reforms/strengthening; and

– provide resources for monitoring progressand adherence to the plan.

Agreeing, at a macroeconomic level, on an affordableshare of resources for roads puts road funding in a nationalcontext. Then, after the road maintenance portion is iden-tified, what remains for network improvement becomesclear, including counterpart funding for lender projects.A short policy statement should be written reflecting theconclusions reached. This is a top-down approach designedto strengthen the country’s corporate memory, which canbe short, as described in Chapter V, Section 7b. If theapproach is “bottom-up,” with the road agency arguing itneeds more money, sustained commitment to reform is lesslikely.

6. Take Steps Toward SustainableFunding of Maintenance

In many countries, lender initiatives to help remedypoor road maintenance have met with limited success. Thereasons for maintenance neglect are understood, andunderstandable. The remedies seem clear enough, at leastto lenders, but the remedies face resistance to change. Evenin countries that have accepted the principle of user payfor road maintenance, the commitment to reform is lessthan wholehearted, and the process of change tends to stallat the point of implementation. The following is anapproach that offers a better chance of success.

The Solution that Works 21

a. Gain Acceptance of a MaintenanceProblem

The road agency will require no convincing thatthere is a maintenance problem. The target audience isthe finance ministry and the politicians. Indeed, it is thefinance ministry that should put the question as to whethera maintenance problem exists. The finance ministry is thegovernment agency vitally concerned about the efficientuse of resources—value for money—and, therefore, thatthe nation gains the full benefit from its road system.

Determining whether the roads are in poor conditionis an empirical matter.13 It involves working with the roadagency. If the road agency has a pavement managementsystem, answers can be derived from that. Otherwise, anexamination of some representative roads is sufficient .

If a maintenance problem is confirmed, a preliminaryassessment should be made of the underlying causes. Theremedy is rarely a case of merely providing more money.Indeed, if other problems are fixed first, there may be noneed for an increase in money. Potential contributors tomaintenance problems include poor planning; ad hocpolitical decision making that foils systematic planning;deferred rehabilitation, because it is treated as capital notmaintenance; poor execution of works, which may be dueto lack of training or equipment; inappropriate relation-ships between sector institutions; lack of competitive ten-dering; materials supply problems (e.g., quarry permitdifficulties); high unit costs (e.g., monopoly pricing ofbitumen); and diversion of funds, such as from mainte-nance to improvements, or by misappropriation.

b. Bring Stakeholders Together forBriefing and Discussion ofRemedies

A workshop about 3 days should be convened forstakeholders—government officials, road user represen-tatives, and leaders of commerce and industry. The aim isto inform stakeholders and reach a consensus on the prob-lem, its possible causes and remedies, and the way for-ward.

Some of the participants will need education on basicconcepts. Some may not know that road user costs can—much less should—be taken into account when makingdecisions concerning road maintenance. The significanceof preventive maintenance may not be appreciated. It is

helpful to include descriptions of successful maintenancesystems in other countries.

c. Publish a Position Paper

The finance ministry or the government should issuea position paper setting out the problem to be resolved,the specific matters to be addressed, a timetable for theprocess, milestones and decision points, and the responsi-bilities of the participants. The position paper will informthe general public and build a corporate memory of agreedactions.

d. Conduct Studies andInvestigations

The position paper leads to a number of matters need-ing study and investigation.14 Many will concern mattersnot directly related to funding such as strengthening thecapabilities of the road agency, banking system, and con-tractors. It is not possible to anticipate all the studies thatmight be needed, and the focus here is on the two studiesneeded to address the funding issue: a road maintenancestudy and a road funding study.

i. Road Maintenance Needs Study. A network that haslacked adequate maintenance will have developed a back-log of maintenance. Restoring the network will requirerehabilitation and reconstruction, after which it shouldneed only normal ongoing maintenance to keep it in propercondition. Funding is needed for clearing the backlog andfor ongoing maintenance thereafter. It is the ongoing main-tenance that dedicated user charges should fund. A studyto determine the road maintenance needs should be guidedby a steering committee drawn from the finance ministry,road agency, and other parties with contributions to make.This study should be in the public domain.

ii. Road Funding Study. To ensure that the earmark-ing of road user charges has a neutral effect on the CRF, astudy of road funding is needed to recommend which taxes(or parts of taxes) paid by road users are best earmarkedfor the RMF, then relabeled as user charges. The studyalso needs to consider cause-and-effect relationships be-tween road use and road agency costs, so that user chargesreflect the impact of each class of user on the roads. Thismay necessitate adjusting the charges or adding new ones.The study should recommend how much of the second-ary road network’s costs should be funded from road usercharges. If the dedicated charges include fuel levies, diesel

13 Road user costs enter into the assessment of whether a road is in poor condition. 14 There is a potential role for lenders to assist with all these studies.


that is used for nonroad purposes has to be considered.Such consumption can be made subject to exemption,refund, or compensation. Options for managing the rev-enues from dedicated road user charges will be developed,among which will be a proposal for an RMF. Candidatedesigns for an RMF will be presented. This study shouldbe in the public domain.

g. Encourage Public Comment/Preparea Policy Paper

At this point the government has a choice. It maydecide on the best course to follow and draft a policy paper,on which comments are invited from interested parties.Or it may prepare an options paper, inviting public com-ment on the options, prior to making a final decision. Thefinal result, after comments are received and considered,is a policy paper on road maintenance funding. If it isdecided to introduce dedicated road user charges andestablish an RMF, the next step is to prepare for imple-mentation.

h. RMF Organization andManagement

Various approaches can be taken to RMF composi-tion and operations and the choices will be country-dependent. There are many matters to be considered here:the RMF’s mission statement, composition of the boardand secretariat, authority to disburse monies, audit, andmuch more. See Appendix A for more details.

i. Empowering Legislation

Empowering legislation for the RMF will have to bedrafted for submission to the government.

j. Activation of the RMF

Once the legislation is passed and takes effect, theRMF will take an interest in the parallel reforms arisingfrom the position paper. The RMF board may elect toadd its support for those reforms and assist with funding(if empowered to do so).


There are strong reasons for implementing RoadMaintenance Fund s in developing countries. Notonly does an RMF solve the problem of inad-

equate road maintenance, but it also introduces worthwhilereforms into the business of road management. Despitethese advantages, however, a country may refrain from tak-ing steps to implement an RMF. Worse, a country maytake steps to implement an RMF in name, but not in sub-stance. A defective road fund may be worse than no roadfund at all, because it may block the implementation of aneffective system of road funding.

If a country will not commit itself to implementingan RMF that embodies the essential elements of goodpractice, it may be because the country is being pressed toreform too quickly or too soon. Rather than pressing theissue, it may be better to step back and let the countryitself set the pace of change (if it is prepared to do so) andtake responsibility for determining its own reforms—whichmay, ultimately, include an RMF.

There is much in favor of self-reliance in the processof change. Change has a better chance of being acceptedand sustained when a country takes its own initiatives andrelies on itself, first and foremost, to carry out reform. Thefollowing section sets out what is involved in the self-reliance approach as a path to progress in countries show-ing a reluctance to commit to a good practice. A moredetailed exposition is presented in Appendix B.

1. Self-RelianceAny process of change faces problems of sustainability.

This is particularly so if the driver of change lies outside acountry. When solutions are developed and promoted bydevelopment agencies, the momentum of change is oftenlost once external consultant assistance and funding comesto an end, as eventually it must.

Sustainable improvement in road funding and main-tenance is more likely if there is national self-reliance indetermining and implementing new systems. It is humannature to be more committed to things that one decidesfor oneself. Change and reform are more likely to be suc-cessful when the choices are made by those who will beaffected by the change and reform—provided those per-sons are fully informed about the options and their conse-quences.

It is not easy to achieve national leadership for changesupported by, rather than driven by, external developmentagencies. Initially, key individuals may sponsor and pro-mote change. But individuals can be reassigned overnight.Government personnel move with career progression.Political appointments are subject to change. Time isneeded to ensure that the benefits and implications ofchange are understood, not only by currently influentialgovernment officials, but also by those who might replacethem as a result of political or administrative changes.Changes need to be understood by all, and not by indi-vidual personalities.

2. Transformation ForumOne way to charge up national leadership for change

is to create a forum of stakeholders to be the focus andinitiator of change. The forum need not be limited to is-sues of road funding and maintenance. The forum can begiven a mandate to look at all changes in the road sectorand to formulate a high-level view of how the sector shouldbe transformed for the better.

Such a transformation forum should include repre-sentation from a cross-section of road stakeholders. Theforum should be responsible for deciding what needs tobe done and for taking action. Rather than passivelyreceiving and considering proposals presented by external

VII. AN ALTERNATIVESOLUTION


agencies and their consultants, the forum should activelydecide its requirements and commission assistance asrequired. The forum must be the driver of change, coor-dinating all agencies’ inputs and integrating the inputs fromany external technical assistance.

3. An Agenda for ChangeThe transformation forum’s first step in developing a

local solution should be to establish an agenda for change.This task can be approached by identifying currently per-ceived failings in the way that roads are managed andfinanced at the present time, and how these matters shouldchange in the future. The agenda should cover all issues,and not be constrained by previous initiatives. Changesalready in progress may be included, in which case theybecome subject to the jurisdiction of the transformationforum. For each item, there should be a statement of whatis perceived to be wrong at the moment, and a vision of abetter state of affairs in the future. The agenda for changeshould be formally approved by the transformation forum,and published. It should be reviewed regularly, andupdated if warranted, so that it represents current percep-tions of what needs to change.

Development agencies may participate in developingthe agenda for change if they are members of the transfor-mation forum. Whether members or not, they may assistby providing supporting information and facilitation.Development agencies should not lead development of theagenda, or attempt to develop it independently. The agendamust be locally owned.

Once an agenda for change has been developed, thetransformation forum should formulate a plan of actionfor each item on the agenda. Priorities should be set, andmethods of addressing each item determined.

4. Development Agencies asFacilitators, notDrivers, of Change

Under the transformation forum approach, develop-ment agencies become facilitators of change, rather thanleaders and drivers of change. Development agencies stillhave a role to play in encouraging and supporting improve-ments, but it is different from the type of assistance theyhave given in the past.

No matter how well-intentioned, external assistancehas not always been successful. Countries sometimes agreeto technical assistance for the wrong reasons. Some

technical assistance is even counterproductive: it leads todependency; it is disjointed; projects start and stop; dif-ferent development agencies have different priorities andagendas; different consultants offer differing interpreta-tions of international good practice.

Sustainable change is not served by piecemeal tech-nical assistance projects, starting and stopping to fit fund-ing deadlines, and producing conflicting advice thatreflects the varying views of consultants, project officers,and development agencies. Development agencies mustwork together to overcome the shortcomings of past tech-nical assistance, and to integrate their activities into thoseof the transformation forum.

Road sector reform is not a cake to be divided up be-tween different agencies, with each agency pushing anagreed component of reforms while others turn away toconcentrate on their areas. Each agency should stay in-volved to ensure that inputs and knowledge are properlycoordinated and integrated; involvement must be constant,flexible, and long-term. Change cannot be hurried by in-tense short-term inputs of targeted skills and financial re-sources.

5. Supporting the Process ofChange

a. Promoting Understanding

Generally, the public is well aware of how poor roadmaintenance is, but is unaware of the reasons for it. Gov-ernment officials are often well aware of the difficultiesfaced, but are unaware of the potential solutions. Lack ofunderstanding leads to strong public reaction againstincreases in charges such as fuel taxes and vehicle licens-ing fees, because the public— often justifiably, based onpast experience—does not believe that increasing road usercharges will solve the problem. Lack of understanding bygovernment officials, and the public, can lead to imple-mentation of inappropriate solutions, leaving the problemsunresolved.

An information campaign to develop knowledge andunderstanding is an important step toward sustainablechange. Information campaigns can take different forms,and all avenues should be considered: television discus-sions and debates, series of newspaper articles, use ofthe Internet, and workshops and seminars at all levels(national meetings, local community groups, and special-ist interest groups such as transport operators).

An Alternative Solution 25

b. Dialogue Between Countries

To date, developing countries have had little exchangeof experience and knowledge through ongoing direct dia-logue. Their channels of communications have been viaintermediaries: development agency experts and consult-ants moving from country to country, and one-off regionalor country workshops, sponsored by development agen-cies. Self-reliance has been absent. In many countries, abody of local knowledge is building, as experience onimplementation of road sector reforms increases. By now,countries should be exchanging experience directly, in anongoing way, without the need for intermediaries.

The Internet offers a low-cost medium of communica-tions. Country-to-country exchange of knowledge can takeplace through web pages and e-mail. The Internet is alsobecoming increasingly important as a means of communi-cation within countries. Direct sharing of experiences amongcountries, and among stakeholders within countries, willrapidly expand the body of knowledge upon which the trans-formation forum bases its decisions and actions.

c. Information Updates

Lack of information about what is happening canproduce adverse results, especially if there are suspicionsamong the public that decisions are not being based uponobjective criteria, or that money is being misappropriatedor misallocated. The best way to combat these problems isto make freely available appropriate information about howand where money is spent, and to ensure that it is accurateand up-to-date.

The Internet should be the primary method of dis-seminating such information. Although the Internet is notyet freely available to everyone, it is available to keygroups—particularly to the media and nongovernmentorganizations, which ensure widespread dissemination ofimportant information. The Internet has the specific ad-vantages of

• immediacy—as soon as information is on theInternet it is available to everyone;

• uniqueness—there is only one version of the in-formation, namely, what is on the web site, and

• low cost—printing and transport costs are elimi-nated, and information can be free.

d. Use External Resources Wisely

Development agencies will no doubt offer support forthe process of change. However, offers of technical assis-tance and external funding should be accepted only when

they fit into the overall plan. The transformation forumshould be aware that every input by an external agencyposes a potential sustainability problem: eventually, exter-nal inputs will end.

If new skills are required, a plan to develop these skillsshould exist from the start. The plan should state whichskills will be developed, and by whom. When external as-sistance is envisaged, it should be viewed against the back-drop of when the required expertise could be availablewithout external assistance. The plan must be resilientenough to allow for critical individuals’ changing jobsbefore the process of change is complete. It must providefor training of personnel to take over when current staffsare promoted, retire, or change jobs.

If new equipment is needed to support road manage-ment and maintenance activities, a realistic assessmentshould be made of whether the resources and skills existlocally to operate and maintain such equipment. If exter-nal resources are required when breakdown occurs, orwhen maintenance is required, use of the equipment willnot be sustainable once external funding ceases. Long-term replacement of equipment also needs to be consid-ered. Local funding may not be available to replaceequipment, in which case the choice of equipment may beinappropriate.

The plan may call for external assistance and exper-tise over a long period. About 5–10 years may be neededfor sustainable change. It is unrealistic to try to anticipateall the needs that will arise, and when they will arise. (Forexample, a political change may suddenly present an oppor-tunity to gather stakeholders together in search of consen-sus. The infusion of external assistance, deliveredimmediately, may yield large paybacks.

e. Flexible Support fromDevelopment Agencies

There will often be a need for short-term inputs, ondemand, as and when the transformation forum identifiesmatters that need to be addressed quickly, to keep changeson track. To be useful, external assistance needs to beresponsive to needs as and when they arise.

Conventional technical assistance does not meetthe need for short, flexible inputs from external sources.Conventional technical assistance projects usually havelong lead times, imposed by budget planning, and pro-vide intense inputs for short periods. Consultants followterms of reference that were conceived at an earlier stageand that may no longer be relevant. Confusion may arisefrom the use of different consultants expressing various(sometimes conflicting) views. Adherence to rules that


insist on competitive bidding can lead to changing fromone consultant to another, to the detriment of the countrybeing assisted. To support the transformation forum,development agencies need to be capable of providingappropriate, flexible expert inputs at short notice.

6. Keeping Changes On Track

a. Stakeholder Influence

When the process of change is open, and details ofwhat is happening are freely available, stakeholders andthe general public can be expected to take an interest inensuring that changes work and road conditions improve.Channels are, therefore, needed for regular communica-tions with stakeholders, to listen to their opinions and feed-back. If the road transformation forum includes effectiverepresentation of road stakeholders, and meets regularly,such feedback should be simple to arrange.

b. Regular Assessment

The transformation forum’s agenda for change canbe likened to a living organism, adapting to events and theenvironment. Similarly, the transformation forum shouldregularly take stock, and adapt as needed. For this reason,the forum should schedule regular meetings—say, everytwo months.

To assist the transformation forum in assessing andmonitoring progress, standard guidelines should be used.Each meeting of the forum should review every item onthe agenda for change, record progress made or planned,and confirm, modify, or formulate future actions. Theagenda for change should itself be reviewed, and eitherconfirmed or amended. And the transformation forumshould review its own functioning, and whether its com-position is still appropriate.

Immediately after each meeting, official minutesshould be circulated to all stakeholders, including external

development agencies, so there can be no doubt about thefull picture of what is happening and who is doing what.

c. Audits

As soon as they are available, the official minutes ofmeetings of the transformation forum should be indepen-dently audited, measured against the same standard guide-lines as used by the transformation forum. This providesa quality check for all concerned that the forum is carry-ing out its activities as intended.

The audit provides some assurance to the public, roadstakeholders, and development agencies that the transfor-mation forum is acting in accordance with establishedguidelines. Without the audit, the transformation forumis accountable only in the court of public opinion.

d. When Things Go Wrong

In the process described above, there are no sanctionsif the process fails to function as intended. Realistically,sanctions would be of little value; they would stand a goodchance of being overridden politically. Ratherthan try to impose sanctions after the event, the processdescribed above aims to minimize the chance of failurebefore the event. The aim is to identify problems beforethey occur (or as soon as they occur) and to spur immedi-ate remedial action. This is why the focus is on minimiz-ing known problems and on regular and effectivemonitoring.

The above two-stage process—a local transformationforum deciding actions to be taken, followedby an independent audit to check the validity of theforum’s deliberations—keeps decision making local, butwith accountability built in, for the benefit of allconcerned.


Sufficient experience has been accumulated to assertconfidently that, for a country that is underfundingroad maintenance, setting up a good practice Road

Maintenance Fund (RMF) would be highly beneficial.Maintenance neglect causes great economic loss, mainlybecause of high costs imposed on road users. Such eco-nomic loss is best removed sooner rather than later. Rec-ommending to a developing member countries (DMC)that it institute a good practice RMF, as soon as possible,is a responsible action for an international developmentagency to take.

If a DMC does not act upon such a recommenda-tion, the fallback is to recommend that the DMC itselfanalyze the performance of its road sector and, from ananalysis of shortcomings, develop its own solutions—sup-ported in that process by international and bilateral devel-opment agencies. Such a process was described in theprevious section.

In recommending a good practice RMF, developmentagencies must recognize that countries differ. There is noneed to recommend a standard solution, but there are lim-its on how far to depart from good practice. A poor prac-tice road fund would be worse than no road fund at all; itcould block implementation of a good practice fund.

An irreducible minimum set of ingredients will qualifyan RMF as good practices.

• Road users, stakeholders, and the general publicmust be well-informed about proposed reforms,and must understand the need for an RMF anddedicated road user charges.

• All RMF revenue must come from user chargesrelated to the benefits gained from road use andaccess. The revenue will likely come from

– levies on consumables, mainly fuel;– annual vehicle license fees;– supplementary heavy vehicle fees;– fines for overloading vehicles; and– international transit fees (where

appropriate).• Road users and stakeholders must have a strong

hand in the RMF and administration ofexpenditure from road user charges.

• A clear separation should be maintainedbetween purchaser and supplier functions,between funding and executing maintenance. TheRMF provides funds for road maintenance on asustained basis; it does not undertakeimplementation or procurement, although itdoes set rules for implementation and procure-ment, to ensure that road users’ funds are effi-ciently and effectively spent by road agencies onimplementation.

• The RMF must be able to hold road agenciesaccountable for funds it gives them. Thus, theRMF must have full legal powers to set respon-sibilities, establish performance targets, andintroduce sound business practices.

• Full information on the planned and actualexpenditure of those RMF revenues must beopenly and promptly available to the public.

In sum, a good practice RMF must have as this mis-sion: the promotion of efficient road network maintenance,to a standard that road users want and are willing to payfor, by collecting the road tariff and allocating funds toroad agencies that comply with RMF standards for soundplanning and execution.

VIII. AN APPROACH TOCOMBATINGMAINTENANCE NEGLECT


1. Recent History of Road FundsNot all countries need road funds to ensure adequate

road maintenance. Road funds are not needed in thedeveloped world, where networks are mature, budgets aresufficient to maintain road smoothness, road managementis good, the staff is skilled, corruption and political inter-ference are not everyday problems.

In developing countries, lack of road maintenance isa serious problem. Programs to address it have been initi-ated under international assistance, notably by the GermanAgency for Technical Assistance in Latin America andthe World Bank and other aid providers in sub-SaharanAfrica, where the Road Maintenance Initiative was begunin 1987. In these sub-Saharan countries, about 40% of theroad network was in need of rehabilitation, the neglectbeing mainly due to insufficient and erratic maintenancefunding. Typically, road agencies were allocated onlyaround 40% of their assessed maintenance needs; actualdisbursements were often much less. The agencies ineffi-ciently used the money they received: they had largeworkforces with low productivity, so that wages took mostof the very low funding, leaving little for fuel and materi-als to do any work; weak planning and programming andfrequent political interference in day-to-day operations alsointerfered with efficient functioning.

With assistance from lenders, many countries tried tocorrect these problems by increasing road user taxes toprovide more maintenance funds, reducing the permanentworkforce, increasing the use of contractors, and install-ing sophisticated computer-based pavement managementsystems.

Generally things did not work out as intended. Roaduser tax increases were absorbed into the consolidated(overall) budget, and little emerged for road maintenance.Delayed payments, erratic workloads, and inflation bank-rupted the contractors, or else they charged inflated pricesto cover these risks. Sophisticated pavement managementsystems were installed, but then lapsed due to lack of funds,qualified personnel, and support by senior management.

Experience in both Latin America and sub-SaharanAfrica points to deficiencies in road sector institutional struc-ture. Roads are not considered part of the market economy.No clear price is derived for road use. Road maintenancebudgets are not determined by what users want and are will-ing to pay for. Government agencies are not geared to pro-vide a user-oriented service and, at salaries that are a fractionof the market rate, cannot attract, motivate, or retain quali-fied personnel. Management efficiency struggles against avague separation of responsibilities, ill-defined performancemeasures, and weak accountability.

2. Can Commercialization Work?Can commercialization succeed in reforming road

maintenance, as it has with other public utilities, such aswater, electricity, and telephone services? Commercializa-tion would require a customer-supplier relationship be-tween road users and road agencies, with clearresponsibilities, authority, performance targets, incentives,and accountability. A road tariff would ensure that roadusers pay a price for road use and, in return, get what theywant and are willing to pay for. Since there is no competi-tive market in which road user preferences can be observedor deduced, ways of involving users in road managementdecisions and choices are needed.

Appendix 1. Road MaintenanceFund: Current Good Practice


Solving the road maintenance problem is thus foundedon two interdependent priorities:

• funding road maintenance though a road tariffand involving users in road management, toensure that maintenance is user-oriented and pro-vides value for money; and

• setting clear responsibilities, establishing perfor-mance targets, and introducing sound businesspractices to ensure effective management andexecution of road maintenance.

Changing to a fee-for-service system of road usercharges requires road user support. For this, there mustbe assurance that the revenues will be used efficiently, andfor the intended purpose. The evidence from manycountries is that users are happy to pay more if they getbetter roads. They know they will save more money,through lower travel costs, than the extra they pay for roadmaintenance.

Road users can most easily be involved in road man-agement through management boards. These are nowfairly common in sub-Saharan African countries and else-where. Most of these countries have, at least in principle,accepted the view that commercialization of road man-agement is the way forward. A number are in the processof implementing parts of the reforms. While there has beensome progress in policy and institutional reforms, mostcountries still have a long way to go before sustainableroad management is in place and is showing tangible re-sults. A recent review of sub-Saharan countries indicatesthat overall, the main paved roads are in about the samepoor condition as they were 10 years earlier.

Early, first generation attempts at road fundingreforms were not successful, and some failed completely.These comprised a ring-fenced account, usually residingwithin the national accounts administered by governmentofficials, into which revenues from road users were paid;the revenues were supposed to be protected from diver-sion to other uses and to be sufficient to fund all roadmaintenance. This only accomplished part of the job. First,generation funds have evolved into second generation roadfunds: road user charges are paid into a fund administeredby an independent board drawn from the public and pri-vate sectors,15 with a private sector chairman and majority,and a mandate to ensure that the funds are spent effec-tively and efficiently and that road users get value for theirmoney. Second generation funds appear to be more suc-cessful, although the rate of success will not be knownuntil they have functioned for several years.

3. The Compass of the RMF

a. What Roads Should the RMF Sup-port?

Dedicated road user charges paid to a road mainte-nance fund (RMF) should fund all maintenance of thenational highway network. The RMF would find it con-venient to deal only with the road agency in charge of thenational highways, but that would ignore lesser roads,which may suffer even more from lack of maintenance;these roads contribute revenues to the RMF and shouldreceive some assistance in return.

Lesser roads should be partly funded by the RMF.For other than national highways, funding road mainte-nance can be a shared responsibility between road users,who gain the mobility benefit, and property owners, whogain the access benefit. Each pays in accordance with ben-efit percentages: dedicated road user charges fund onlythat portion of road maintenance indicated by the mobil-ity percentage rating, while the access portion is met byproperty owners; in practice, this means local authorities,which tax property owners on their behalf. The RMF typi-cally contributes 50%, adjusted up or down according tothe ability of provinces and local authorities to raise rev-enues to partially fund roads. At the community level, lo-cal contributions could be made through contributions inkind, such as free labor.

b. What Expenditures Should the RMFMeet?

The RMF’s objective is to secure proper maintenance,including all activities needed to keep the roads operatingindefinitely, and to clear up the maintenance backlog, whichtypically amounts to one third of the road network:

• routine maintenance (restoring drainage, fillingpotholes and cracks, and maintaining edges),

• periodic maintenance (resealing, about every 5years, to rejuvenate the surface), and


The RMF should also fund administration, planning,programming, and monitoring of maintenance operations,which are integral parts of maintenance; studies and train-ing; and research and development relevant to road main-tenance.

Minor road improvements are capital—not mainte-nance—expenditures; but to save money, they are done atthe same time as rehabilitation. Traffic can grow mark-15 Private sector is used here to refer to representatives of the interests of road users.

Appendix 1: Road Maintenance Funds: Current Good Practice 31

edly 15 years or so between rehabilitations; it would bewasteful to rehabilitate a road that is likely to become in-adequate before its next rehabilitation in another 15 years.Rehabilitation requires large quantities of materials andthe mobilization of heavy equipment. Including minor im-provements, such as easing tight corners to improve safetyor paving the shoulders for slow-moving traffic, adds littleextra cost.

Major improvements, such as building new roads orbridges, remain classified as capital expenditure items,which stay under parliamentary budget control. This pre-serves fiscal flexibility, which is the ability to spread thebudget cuts over all sectors at times of economic hard-ship. Sometimes earmarking taxes for specific purposes iscriticized as reducing fiscal flexibility, but since the capitalbudget for roads remains under traditional budgetary con-trol, that is not the case here. Dedicated funding for main-tenance simply removes a bias against maintenance that isvery costly to the nation.

4. The Road Tariff

a. Which Taxes and Fees should beDedicated Road User Charges?

Road user charges should be simple and directly re-lated to road use—a “road tariff ” paid by road users tomeet the cost of road services provided for their benefit.Generally, it should comprise the following:

• Levies on consumables, mainly fuel. Fuel levies aresimple, readily understood by the public, and easyto collect. Fuel is not the only consumable thatcan be levied, however. If higher fuel prices are aconcern, part of the revenue can be raised by lev-ies on lubricants, tires, and spare parts.(In fact, the vehicle itself wears out with use, es-pecially in the case of working vehicles; in prin-ciple, a levy could be applied to the purchase ofnew vehicles.)

• Annual vehicle license fees. Conceptually, annualvehicle license fees pay for time-related roadmaintenance costs (whereas fuel levies pay for use-related costs).

• Supplementary heavy vehicle fees. Annual vehiclelicense fees also have another purpose. They canbe used to refine use-related charges. A diesellevy is sensitive to the weight of a heavy vehiclebut not to the number of axles that spread theload on the pavement. More axles mean less

pavement wear. Part of the diesel levy can beswitched to a supplementary annual fee for heavyvehicles that reflects both vehicle weight andnumber of axles.

• Fines for overloading. An overloaded heavy vehiclecauses dramatically more pavement wear, the costof which should be added to the fines paid byapprehended vehicles and paid to the RMF.

• International transit fees. Vehicles entering fromother countries should face costs of road useequivalent to those of domestic road users.

Road user charges must be confined to fees directlyrelated to road access and use. They should not include,for example, inspection fees for vehicle mechanical fitnessand safety. (Vehicle inspection fees should meet the inspec-tion costs.) Neither should lottery proceeds, taxes on busi-ness turnover, and the like, be components of a road tariff.

To give a sense of proportion to the road tariff, ananalysis of some developing countries in Latin America16

found that the cost of maintaining the entire road networkcould be met from a fuel levy of only 7–9 US cents perliter. The fuel levy would be lower if some of the cost weremet by an annual vehicle fee, and if the cost of mainte-nance of lesser roads were shared with local bodies. Theseother revenue sources could potentially halve the fuel levyto around 4 US cents per liter.

Why can’t road use charges be met by making all roadstoll roads? There are three reasons.

• Only roads carrying thousands of vehicles a dayare candidates for toll collection. Otherwise thecost of collection adds significantly to road oper-ating cost, and becomes an added burden on roadusers.

• Tolling is feasible only for roads with access limi-tations. Otherwise, vehicles detour around tollplazas.

• Since users would pay both the toll and the roadtariff, double charging arises.

Installing tolls on bridges seems at first to obviate theseobjections. Busy bridges accommodate thousands of ve-hicles per day; these vehicles cannot detour around abridge; and since little fuel is used crossing the bridge,double charging is insignificant. Does this mean bridgetolls should be added to the road tariff? No because bridgemaintenance costs are very low in comparison with thelikely toll revenues, which would be out of proportion tothe maintenance need.

16 Zietlow, Gunter, and Alberto Bull. 1999. Reform and Financing and Management ofRoad Maintenance: A New Generation of Road Funds in Latin America. Paper presentedat the XXIst World Road Congress, 3–9 October, Kuala Lumpur.


On the other hand, installing tolls on a bridge torecoup its construction cost makes sense: users can acceptpaying an additional sum for a new bridge that saves thema lot of money. The same reasoning also applies to newroads, if the tolls pay for capital, not maintenance. Tollsare not suited to be part of a road user charge that raisesrevenue to pay for maintenance.

b. How Can the ConsolidatedRevenue Fund be Protected?

Switching road maintenance funding to the RMFshould not affect the consolidated revenue fund (CRF) orrevenues currently allocated to health care, education, etc.When the CRF loses the responsibility for funding mainte-

nance, it should also lose an equal amount of revenue, byearmarking the road user taxes and paying them to the RMF.

Figure A1.1 illustrates how monies going into andout of the CRF lose their identities. It indicates that thetotal money going into the CRF equals the total moneygoing out.

Figure A1.2 shows a case when road users’ tax con-tributions do not lose their identities and these contribu-tions are used to meet road expenditures in full. Roaduser contributions are shown split into taxes contributingto government general revenue and taxes (to be thoughtof as road user charges or the road tariff) earmarked forthe RMF. The road user charges portion can be paiddirectly to the RMF without any detrimental effect onthe CRF, as shown in Figure A1.3.

Figure A1.1.Figure A1.1.Figure A1.1.Figure A1.1.Figure A1.1. Income and Expenditure of a TypicalIncome and Expenditure of a TypicalIncome and Expenditure of a TypicalIncome and Expenditure of a TypicalIncome and Expenditure of a TypicalConsolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundConsolidated Revenue Fund

Note: In the diagram, the shaded portion is much bigger than in reality. Commonly only a small percent-

age of government revenues are allocated to raods.

Note: In the diagram, the shaded portion is much bigger than in reality. Commonly only a small

percentage of government revenues are allocated to raods.

Figure A1.2.Figure A1.2.Figure A1.2.Figure A1.2.Figure A1.2. Consolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundContributions by Road UsersContributions by Road UsersContributions by Road UsersContributions by Road UsersContributions by Road Users

Figure A1.3.Figure A1.3.Figure A1.3.Figure A1.3.Figure A1.3. Consolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundConsolidated Revenue FundRoad User Contributions EarmarkedRoad User Contributions EarmarkedRoad User Contributions EarmarkedRoad User Contributions EarmarkedRoad User Contributions Earmarked


c. Where Should the EarmarkedRevenues be Kept?

The finance ministry would probably prefer that theRMF’s revenues remain within the national accounts, asa ring-fenced corner of the CRF, because this makes thenational accounts look healthier. Experience (from firstgeneration road funds) shows three potential problemswith this. First, the RMF’s revenues are vulnerable tobeing raided and used for other purposes. Second, whilering fencing may be respected, the funds may not bereleased, and may accumulate, starving maintenance,while adjustments are made by rebalancing the appor-tionment between road user charges and taxes. Third, theRMF may not receive all the revenues due to it: intragov-ernment cross-debts during economic downturns haveresulted in state-owned petroleum companies retainingrevenues collected on behalf of the RMF. Good practiceis for revenues to be held in an account at a commercialbank—or two or three commercial banks, to spread anyrisk of default.

d. How Should Road User ChargesEvolve?

As described this far, the road tariff is initially madeup of road user charges that were formerly taxes, or partsof taxes. This change is neutral both to the CRF and toroad users, who see no change in their costs. Further-more, it is neutral in terms of the money available forroad maintenance. To fund adequate maintenance, theroad tariff can be increased (Figure A1.4), new chargesadded (Figure A1.5), and charges rebalanced to betterreflect the costs imposed by different vehicle classes (Fig-ure A1.6).

e. The Transition: A Role forLenders

Figure A1.4.Figure A1.4.Figure A1.4.Figure A1.4.Figure A1.4. Increases in Earmarked RoadIncreases in Earmarked RoadIncreases in Earmarked RoadIncreases in Earmarked RoadIncreases in Earmarked RoadUser ChargesUser ChargesUser ChargesUser ChargesUser Charges

Road users are generally willing to contribute moretoward road maintenance—provided that the roads arebetter maintained. Users perceive, correctly, that the ex-tra charges they pay will be more than compensated bythe gains they make through reduced operating costs.Gains do not occur instantaneously, however. If the roadtariff is implemented fully from day one, users will feelthe pinch of extra payments initially before they noticeany savings flowing through, and the lag between pay-ments and savings may jeopardize user support. Ideally,users should see significant road improvements beforethe road tariff is fully implemented. With some transi-tional funding, the road tariff could be phased in overseveral years.

In any event, since one of the most important re-sponsibilities of the RMF is to clear up the typically enor-mous maintenance backlog, transitional funding supportwill be needed for several years. Clearing the backlogwithout delay will give users the satisfaction of fastprogress, which in their minds they will link to the roadtariff. Funding support can come from government gen-eral revenues or loans, and will be small compared withwhat is needed for the backlog. Most of the backlog willbe rehabilitation. For this, lenders will surely need to pro-vide loan finance. Without a plan for funding the fullremoval of the backlog, a proposal for an RMF has littlechance of success.

f. What Intermittent Adjustments tothe Road Tariff May be Needed?

Maintenance needs will be fairly even from year toyear if there is an even spread of pavement condition and,hence, rehabilitation. Nevertheless, there will always besome yearly variations. In addition, the maintenance loadcan be expected to grow steadily, as the network isimproved or extended. Funding requirements can besmoothed by allowing the RMF to operate within a speci-fied band of surplus or deficit.

Figure A1.5. New Earmarked Road User ChargesFigure A1.5. New Earmarked Road User ChargesFigure A1.5. New Earmarked Road User ChargesFigure A1.5. New Earmarked Road User ChargesFigure A1.5. New Earmarked Road User Charges


To keep within the band, the tariff will need adjust-ment from time to time. The power to adjust the tariffshould, ideally, be vested in the RMF. This would be idealif the RMF truly has a customer-supplier relationship withroad users. At the other end of the spectrum of possibili-ties, the RMF might be required to submit tariff changesto parliament. In a realistic middle ground scenario, theRMF notifies a tariff change for the coming year on a noobjection basis; if there are no objections, for instance fromthe finance ministry, within a fixed period, the notified tariffacquires the force of law.

g. What About Fuel Not Used onRoads?

A cornerstone of the road tariff is a levy on fuel,gasoline, and diesel, collected by fuel wholesalers (in manycountries, a state petroleum company) on behalf of theRMF. While gasoline is used mainly by road vehicles, die-sel has many uses. The road tariff should not applyto fuel used in fishing boats or for electricity generation,railway transport, industrial uses, and agriculturalequipment.

Some countries, such as New Zealand, avoid the die-sel problem by having a weight-distance charge instead ofa levy on diesel. Heavy vehicles pay per kilometer of travelaccording to a declared maximum permissible weight andaxle configuration (that spreads the load on the pavement).This system has the benefit of charging more precisely forpavement wear, but surveillance and enforcement are oner-ous and would not work in developing countries. Anotherpossibility is to contrive two diesel fuels, one on which theroad tariff is paid and one on which it is not. To detectmisuse, coloring is added to the fuel on which the tariff isnot paid.17 Again, surveillance and enforcement are prob-lematic, especially in developing countries.

For major users, such as railways and electricity gen-erators, the road tariff can be refunded or simply notcharged at all. Fuel consumption of large users can beaudited and cheating kept within limits. The same mightbe possible for the fishing industry, if the supply chain forfuel is fairly simple. For farm and small industrial uses,one option is to allow applications for refunds. Another isto compensate the sector as a whole: for example, the farmsector might enjoy a fertilizer subsidy that balances theroad tariff paid by farm equipment.

Whatever course is taken, the RMF is not entitled toany road tariff revenues collected from nonroad uses. Ifsuch collections occur, the revenues must be estimated andpaid into the CRF.

5. The Road Maintenance Fund

a. What is the RMF’s Mission andStructure?

More than a bank account to hold revenues from usercharges, the RMF is also an institutional arrangement foradministration of the revenues.

The mission of the RMF is to promote efficient roadnetwork maintenance, to a standard that road users wantand are willing to pay for, by collecting the road tariff andallocating funds to road agencies that comply with RMFstandards for sound planning and execution of works.

The RMF is responsible to the public for ensuringthat road user charges are spent responsibly and that theright balance is struck between the level of the tariff andthe level of service the roads provide. It has a clear mis-sion statement, transparent objectives, and well-definedmeasures of its outputs. A clear separation exists betweenpurchaser and supplier functions, between funding andexecuting maintenance. The RMF provides funds for roadmaintenance on a sustained basis. It does not undertakeimplementation or procurement but it does set rules forthem, to ensure that road users’ funds are efficiently andeffectively spent by road agencies undertaking implemen-tation. The RMF holds road agencies accountable forfunds it gives them.

The RMF mission statement calls for road userinvolvement, which can be advisory or executive. A mini-mal level of user involvement is achieved by an advisoryboard of road users to advise the minister whose depart-ment has charge of the money. It is good practice for theRMF to be a separate agency modeled on commerciallines, with an independent board made up of road usersand government representatives, and with its own execu-tive staff. Public sector board members provide linkagesto the agencies involved with road maintenance, providesupport for revenue collection, and present the broadernational interest. The other members provide linkages tousers, whose willingness to pay for adequately maintainedroads is, ultimately, the foundation of the RMF.

17 Coloring of kerosene may also be necessary if there is a high price differentialbetween diesel and kerosene, as happens in countries that subsidize kerosene usedfor cooking and lighting by the rural poor. Diesel engines still work when substantialamounts of kerosene are mixed with diesel fuel.


Appointments may be ex officio (such as the financesecretary), nominations by organizations such as the Cham-ber of Commerce, or individuals chosen for the commit-ment and knowledge they will bring to the RMF. Themethod of selection may differ between public sector offi-cials and road users’ representatives. Public sector mem-bers might include

• the secretary of the Ministry of Finance(or nominee),

• the secretary of the Ministry of Transport(or nominee),

• representative of municipalities, and• a representative of rural local government.Nominees should be no more than two levels of se-

niority below the level of Secretary. Road agencies are notlisted because they are providers of services that are pur-chased by the RMF.

Road user interests might be covered by• Chambers of Commerce,• industrial and mining associations,• agricultural groups (farmers, pastoralists, plan-

tation owners, etc.),• the tourism and hospitality industry,• motorists’ associations,• truck operators associations,• bus operators’ associations,• bus users’ associations,• taxi associations,• groups and nongovernment organizations with

special interests (pedestrians, cyclists, poverty, en-vironment, etc.),

• scientific and academic institutes, and• professional associations (engineers, lawyers, en-

vironment groups, etc.).Engineering contractors are not listed for the same

conflict-of-interest reason that road agencies are excluded:they are providers of services purchased by the RMF.

Not all the above groups can be given a voice on theboard at the same time. It is sensible for appointments tobe for (a minimum of) 3 years, staggered so that vacanciesdo not all occur at once. Even if individuals are appointedfor their personal attributes, the organizations listed maybe invited to suggest candidates.

A board of about nine members functions well. Thechairman ideally should be elected from among the userrepresentatives. Board members are paid for attendanceat meetings (which are at least bimonthly). Some of thework may be undertaken by committees (e.g., road safety,community and environment, engineering, road usercharges) onto which persons with special knowledge canbe co-opted. The RMF outsources as many functions as

possible, e.g., revenue collection, monitoring of workdone, etc.

Management of an RMF requires a strong and inde-pendent secretariat, headed by a chief executive officer,who is appointed by the board and attends board meet-ings, but is not a member of the board. The chief execu-tive officer appoints the staff, which might comprise about10 persons with skills in planning, economics, engineer-ing, accounting, and administration, plus support staff.Initially, the secretariat would assist the board to establishthe systems on (i) receiving its income, (ii) allocating fundson the basis of plans prepared by road agencies in accor-dance with rules set by the RMF, (iii) disbursing moniesto road agencies, and (iv) monitoring road agencies toverify that works have been undertaken satisfactorily. Thesecretariat manages the financial affairs of the RMF andprepares reports and publicity material.

b. How should the RMF beEmpowered?

The RMF should have its own empowering legisla-tion. But waiting for new legislation may take a long time.The RMF may therefore need to be established underexisting legislation or by decree, in which case there shouldbe a sunset clause to ensure that the status of the RMF isreviewed and either regularized by new legislation or closeddown.

The legal document creating the RMF should stateclearly which items the RMF can finance and should givesome indication of relative priority. The instrument estab-lishing the RMF should be supported by published fi-nancial regulations or procedures. These could beannounced as legal regulations, such as in the official gov-ernment gazette, or be published by the RMFboard.

The board must be given full legal powers to enterinto legally enforceable agreements, such as for collectionof revenues and expenditure of monies paid by the fund.The board has a fiduciary duty to defend the fund againstraids.

c. Duties and Functions of the RMF

The RMF collects road tariff revenues and disbursesmoney to road agencies, subject to those agencies’ compli-ance with RMF conditions designed to promote value formoney for the road user. Such RMF conditions mightinclude using economic analysis to justify pavement reha-bilitations, use of quality assurance systems, and minimumlevels of contracting out.


In particular the RMF will have the following func-tions:

• enter into agency agreements for collection of rev-enues;

• establish procedures to ensure an adequate andstable flow of resources;

• set out transparent criteria for, and issue manualsto guide, preparation of road agency programseligible for RMF support;

• set out procedures for disbursing funds forapproved expenditure programs;

• collate and review maintenance programs sub-mitted by road agencies;

• review, evaluate, and audit (financial and techni-cal) works financed by the RMF to ensure thefunds are spent effectively and on the approvedprograms;

• make payments to road agencies, guarding againstmisappropriation and unduly slow payments pro-cedures;

• prepare annual reports detailing the fundsreceived and allocated, programs completed,shortfalls experienced, corrective actions taken,etc.; and

• disseminate information and conduct publicitycampaigns to raise awareness of the RMF’s work.

d. How Should the Road Tariffbe Collected?

Collecting revenue involves drawing up agreementswith collection agencies such as petroleum companies.With each collection agency, there is a formal contract, orat least a written memorandum of understanding, cover-ing procedures for collecting revenue, procedures fordepositing funds into the RMF bank account, informa-tion to be supplied to the RMF, and agency fees payableto the collection agency.

The secretariat systematically tracks movements inthe chargeable base (e.g., sales of fuel and their baseprices), and estimates how much revenue should havebeen collected, allowing for exemptions and rebates, andreconciles the figures with the amounts actually creditedto the RMF.

e. How Can Transparency andReporting be Assured?

The RMF does not operate in a competitive environ-ment and cannot be bankrupted; thus, its affairs must befully transparent. The RMF submits to the governmentan annual report and audit carried out by independentauditors appointed by the government auditor. This is apublic document.

Under its empowering legislation, the RMF shouldbe accountable to road users for efficient and effective useof road tariff revenues. Not only should its processes, plans,achievements, performance, and audited accounts be pub-licly available, but a deliberate effort should also be madeto disseminate information as widely as possible, and tosolicit users’ reactions. If the public understands what theRMF is doing, there is more chance of public acceptancewhen road user charges are increased. Individual boardmembers would need to listen to, and inform their con-stituents about, road-related expenditures, and the levelof charges that result.

Every few years, technical audits should be under-taken by international consultants and made public. Insome countries, the RMF produces weekly programs onradio and television to actively publicize its work. TheInternet is an efficient and effective means of makinginformation on the road sector and the RMF publiclyavailable. The information should include time series dataon the state of the network, so people can see whetherthe average condition of the network is improving ordeteriorating.


Despite the benefits of setting up a road maintenancefund (RMF) for sustainable funding of road maintenance, acountry may refrain from doing so. If a government will notcommit itself to implementing an RMF that embodies theessential elements of good practice, it may be because the coun-try is being pressured to reform too quickly or too soon.

Rather than pressing the issue, it may be better to stepback and let the country itself set the pace of change (if itis prepared to do so), and take responsibility for deter-mining its own reforms—which may, ultimately, includean RMF. Reform has a better chance of being acceptedand sustained when a country takes it own initiatives andrelies on itself, first and foremost, to carry out reform. Thisappendix sets out a self-reliance approach to progress incountries showing reluctance to commit to a goodpractice RMF.

1. Recognize the Local Context

a. Have an Open Mind—and a LittleRealism

For more than a decade, in countries all over the world,international development agencies have applied fairlyconsistent principles to the reform of road sector fundingby introducing road maintenance funds. Yet, even afteryears of implementation experience, there are few textbookexamples of change implemented as intended. In practice,departures from the original intent almost always occur,commonly in the following ways.

• The board of the road fund is not truly represen-tative of stakeholders.

• Decision making is not objective and transpar-ent in the eyes of the public.

• Revenue collection sources and methods are notfair and transparent.

• The public does not understand the reasons forchanging the revenue base.

Problems occur for a various pragmatic reasons, themost important of which summarized in Table A2.1. Be-hind these problems are underlying factors, often linkedto a lack of realism on the part of those seeking change. Ifthese underlying factors are not addressed, pushing aheadwith idealized solutions is unlikely to lead to a sustainablesolution. Factors needing to be addressed are primarilythe following:

• vested interests, political and financial, that ob-struct change to existing systems of decision mak-ing and funds distribution;

• weak governance and lack of public and politicalinterest in better governance; and

• lack of local leadership for change.The strength of these factors is a reflection of the col-

lective will power of a country to improve the way in whichroads are managed and financed. No matter how good thetechnical solution, if all the forces in a country are resist-ing change, then change is unlikely to happen. On theother hand, if there is a collective and strong national wishto change, and to make the improvements work, individu-als will come forward to improve and refine proposedsolutions, and to correct shortcomings if national politicalor cultural requirements have not been given due weight.

Realism is needed when encouraging a country toadopt a dedicated road fund. It is widely known that manydeveloped countries do not have, and do not need, dedi-cated road funds. Against this backdrop, implementationof a road fund may be doomed by lack of commitmentfrom parties crucial to the change process—unlessthe merits of a road fund have been understood andaccepted first.

Successful change is more likely if the parties comeinto the process with open minds, eager to learn from the

Appendix 2. An AlternativeRoute to Sustainable Funding


TTTTTable A2.1 Road Fable A2.1 Road Fable A2.1 Road Fable A2.1 Road Fable A2.1 Road Funds Problems, Their Effects, and Punds Problems, Their Effects, and Punds Problems, Their Effects, and Punds Problems, Their Effects, and Punds Problems, Their Effects, and Possible Solutionsossible Solutionsossible Solutionsossible Solutionsossible Solutions

External solutions are imposed. Solutions fail to address local needs andfail to win local commitment and support.

Take longer to tailor solutions to needs.Win support through public informationcampaigns. Pass the initiative for findingsolutions to local people who are invitedto call on international funding agenciesfor assistance.

ProblemProblemProblemProblemProblem EffectEffectEffectEffectEffect PPPPPossible Solutionsossible Solutionsossible Solutionsossible Solutionsossible Solutions

There is no assurance that maintenancewill be done once external funding ceases.

Drive change through a body establishedfor the process, where the members arechosen personally, not ex officio.Conduct public information campaignsthat, among other things, have theadvantage of solidifying corporatememory.

Create an agency that functions onprivate sector lines, where staff aresubject to private sector rewards,obligations, and risks.

Devise a system that produces sufficientsecure funding from domestic sources.

The training of such personnel, and thesystems that were set up for them tooperate, can be wasted; those systemscan fall into disuse.

Inputs to reforms are less effective, or arenot timely, or are not provided at all.Inputs are packaged as large consultingassignments when the need may moreoften be for short-term inputs by individualspecialists.

A climate is created in which corruptionmay flourish. Persons trained for specialistposts take leave for more remunerativejobs, such as those attracting informalincome.

The process of change repeatedlybacktracks and decisions are remade,delaying and jeopardizing the reforms.

These personnel need to be adequatelypaid and have promotion prospects. Asthis is often difficult within the govern-ment, options are to contract operationof systems to the private sector, or to setup a new specialist agency modeled oncommercial lines.

International agencies need to find waysof being more flexible, nimble, andresponsive to the needs of the reformprocess.

Frequent changes of senior governmentstaff take place.

The government sector is poorly paid.

Inputs by different external agencies to theprocess of change are disjointed.

Government personnel assigned to newinitiatives are transferred, or leave.

Routine activities are dependent on exter-nal funding.

experience of other countries and to understand theprinciples and options, and realistic as to what can bechanged, and how it can be changed, in a particularnational context.

b. Understand What Has Gone Before

Inadequate maintenance is a burden on the economyin virtually every developing country. In many countries,and in regional forums, initiatives have been taken todevelop an understanding of the issues and to initiateimprovements, generally funded by international devel-opment agencies under road sector reform programs.

Initiatives generally do not start from a position ofcomplete ignorance of the issues and the implications ofchange.

Before starting anything new, it is wise to assess whathas gone before. An objective assessment of previous fail-ures may identify factors such as the following:

• Only a limited number of people (likely to bethose who have attended national or regionalseminars and have been involved with previousinitiatives) have a good appreciation of the issuesand the implications of different solutions. Otherpeople may be unaware of the possibilities.

• There is widespread resistance to change, frominside the national road agency (as a result of

Appendix 2: An Alternative Route to Sustainable Funding 39

potential job changes or losses) and from thepublic (as a result of potential taxation andlevy increases that have not been satisfactorily explained).

• Implementation of a road fund has beenattempted, but failed to meet the intended ideal.Representation on the board may not have beenbalanced; methods of raising funds may not havebeen in line with good practice; decision makingmay not have been based on accurate and objec-tive information.

2. Develop National Leadership

a. Recognize the Need forSelf-Reliance

Experience shows that solutions developed andimposed by external development agencies are unlikely tobe sustained. If the driver of change comes from outside acountry, the momentum for change is soon lost when ex-ternal consultants and development agencyfunding are withdrawn.

Sustainable improvement in road funding and main-tenance is more likely if there is national self-reliance inevery aspect of any new systems. This issue needs to beaddressed at the beginning of the process of change, notas an afterthought. Achieving self-reliance requires, first,an objective assessment of the inputs that otherwise wouldbe provided by external agencies; and, second, a realisticplan to develop a strictly local capacity to provide theseinputs. The plan should cover the following activities.

• Incite enthusiasm for change—meaning a rec-ognition that change is needed and the determi-nation to carry it through.

• Take a comprehensive view of the road sector—and an understanding of measures and indica-tors of success in road maintenance funding andexecution.

• Develop analysis to determine priorities, includ-ing deriving and updating all the required inputinformation.

• Fund data collection and other recurrent activi-ties—which need to become part of the routineannual activities in the road sector.

• Assign staff and pay adequate salaries andexpenses.

• Provide services—vehicles, office space, and

equipment.The provision of resources by external agencies, to

get the process of change started, can be counterproduc-tive if it causes dependency and inappropriate expectations.Self-reliance will not be attained if the reason for follow-ing a new initiative is to create short-term benefits for cer-tain individuals, or to satisfy external development agencywishes without understanding the reasons and principlesinvolved.

b. Hold a Transformation Forum

It is not simple to achieve true national leadership forchange supported, rather than driven, by external devel-opment agencies. Initially, key individuals may sponsorand promote change, but they can be reassigned overnight.Government personnel move with career progression.Politicians and political appointments are subject to po-litical changes.

An accepted practice is to set up an RMF with aboard representing a full cross section of road stakehold-ers to manage and monitor it. The board may not comeinto existence, however, for several years following the pas-sage of new legislation to implement an RMF. Until sucha board is set up, leadership of change may be spread overdevelopment agencies and their consultants appointed toimplement changes, government agency staff, and politi-cal interests. If an RMF is not selected as a solution, aboard with statutory powers may never be set up. A steer-ing group or committee may exist, but more as a consulta-tive body to approve proposed changes than as a dynamicleader and initiator of change.

Successful national leadership requires a strong localforum as the focus and initiator of change, with represen-tation of a full cross section of road stakeholders. Such atransformation forum can be constituted from the outset,and be held responsible for deciding what needs to be doneand for taking action. Rather than passively receiving andconsidering proposals presented by external consultants,this forum should actively decide its requirements andcommission assistance as required.

c. Coordinate and Integrate Changes

Successful change requires coordination and conti-nuity. A single transformation forum, responsible for allchange in the road sector, is preferable to a specific forumon road funding and maintenance issues. A single forumalso allows a more objective high-level view of what typeof change is needed. For instance, implementation of a


conventional RMF is one possible solution to solvingthe problem of road maintenance neglect, but local un-derstanding of cultural and political realities may lead toa different solution.

For successful coordination, the transformation fo-rum should not be sponsored by a single project or devel-opment agency. The forum must be the driver of change,coordinating all agencies’ inputs and integrating the resultsof all technical assistance projects.

d. Keep Development Agency Inputsin Perspective

Under the transformation forum approach, develop-ment agencies become facilitators, rather than drivers, ofchange.

Involvement by a development agency has to be con-stant, long-term, and complementary to the activities ofother development agencies. Implementation of road sec-tor reform is to be divided up among different agencies,with one agency pushing forward an agreed component ofreforms, while others stand back and concentrate on otherareas. Every agency must stay involved and ensure thatinputs and knowledge are properly coordinated and inte-grated.

Development agencies must work to overcome thefailings of past technical assistance projects, such as thefollowing:

• rigid timescales for technical assistance projects,which start and stop at fixed dates—regardlessof the capacity of a country to absorb and utilizethe results and of the real need for external input,as changes are implemented;

• fixed terms of reference that are difficult to adaptto take account of new approaches and local needs,as projects develop and the reform processadvances;

• lack of continuity in inputs, resulting from piece-meal projects;

• inconsistent advice, due to the use of differentconsultants, who have differing opinions andexperience; and

• failure to ensure sustainability of project results,notably the maintenance and updating of road

network databases.

3. Build In Sustainability From theStart

a. Recognize what is Likely to GoWrong

Enthusiasm for a proposed solution, supported by casestudy evidence that the solution is appropriate for the coun-try, are not powerful enough to ensure that the resultsintended will be realized.

Table A2.1 listed some of the problems likely to beencountered and the effects that may result. It is impos-sible to predict and allow for every possible problem, andonly limited resources are available to prepare for them.Nevertheless, it is necessary to face up to the fact that suchproblems will arise, and to anticipate how to respond andminimize their effect.

Every input by external agencies is a potentialsustainability problem. Eventually, external inputs will bewithdrawn. To minimize sustainability problems, it is nec-essary to look at the end, beyond development agency/lender assistance, when the process must run itself with-out external consultants and funding. This can be done byworking through the annual cycle of funding and main-taining roads. From where will come the required skillsthat do not exist locally today, or that cannot be obtainedat current salaries? Where might there be a lack of publicor professional understanding that could delay or impedeactivities? Where are responsibilities difficult to define orallocate?

b. Establish Who Should beInvolved, and When

The role of stakeholders in road funding and man-agement is recognized, nowadays, by the presence of stake-holder members on RMF boards. But there is no need towait for the establishment of an RMF to give stakehold-ers an official and accountable role in road maintenancefunding and management. If ownership of the change pro-


cess is to be local, rather than external, full stakeholderrepresentation is needed from the outset, well before adecision is made whether to choose a second generationroad fund as the solution.

There is no standard formula for deciding who shouldbe involved in driving and monitoring the process ofchange, or in any new management set-up. The best rep-resentation will depend on many factors, such as past his-tory of initiatives, local culture and politics, publicopinion, plans for government reform, and more. Whenrepresentation is decided, the following questions shouldbe considered:

• Can the representatives provide a constructivecontribution?

• Do they truly represent a useful cross section ofroad stakeholder interests?

• Will they work as a team to achieve results?• Are they trustworthy, and generally respected as

such?In practice, it may not be easy or straightforward to

make such an assessment, since representation may be in-dividual, but by organization.

c. Delineate the Role of DevelopmentAgencies

Development agencies clearly have a role to play inencouraging and supporting improvements. If the solu-tions selected are to be sustainable, however, developmentagencies must be facilitators, not leaders. The challenge isto create sufficient local willpower to lead the change, andthe base knowledge and skills to support the change andmake it happen.

Change cannot be hurried by short-term inputs of tar-geted skills and financial resources, and cannot depend onindividual personalities. For change to be sustainable, timeis needed to ensure that the benefits and implications areunderstood by all—not only by currently influential gov-ernment officials, but also by those who might replace themas a result of political or administrative changes.

Development agencies have a role to play in ensuringthat monitoring and auditing of progress take place.External resources may be needed to comment objectivelyon progress, and to recommend refinements and improve-ments.

4. Develop the Local Solution

a. Establish an Agenda for Change

The first step in developing a local solution is toestablish an agenda for change. This can be brought intofocus by identifying currently perceived failings in theways that roads are managed and financed, and how theseshould change in the future. The transformation forumdescribed above is the ideal vehicle for this activity, espe-cially if it includes a full cross section of road stakehold-ers. The agenda for change should cover all issues andnot be constrained by previous initiatives. Changes al-ready in progress may be included, in which case theybecome subject to the jurisdiction of the transformationforum. For each item on the agenda for change, thereshould be a statement of what is perceived to be wrong atthe moment and a vision of a better state of affairs in thefuture.

The agenda for change should be formally approvedby the transformation forum and be published. It shouldbe reviewed regularly, and updated if warranted, so it rep-resents current perceptions of what needs to change.

Development agencies may participate in the devel-opment of the agenda if they are members of the transfor-mation forum, and may assist by providing supportinginformation and facilitation skills. They should not leadthe development of the agenda, or attempt to develop itindependently. The agenda must be locally owned.

b. Formulate a Plan for ImplementingChange

Once an agenda for change has been developed, thetransformation forum needs to formulate a plan of actionfor each item on the agenda. It must set priorities and de-termine methods of addressing each item on the agenda.The forum is likely to need assistance so that membersunderstand the options and their consequences.

Development agencies have roles to play in provid-ing finance and skilled resources to implement changes.If the development agencies are part of the forum, thiscan be discussed and agreed by the forum. Road usermembers of the forum can assist by informing and edu-cating road users (who may, for example, face increases inlevies or taxes).

c. Integrate the Activities ofDevelopment Agencies

The transformation forum should integrate the ac-tivities of the different development agencies into a com-mon plan for change. Sustainable change is not served bypiecemeal technical assistance projects, starting and stop-ping to fit funding deadlines and producing conflicting


advice (that reflects the varying views of consultants,project officers, and development agencies). Developmentagencies must work to eliminate any distortions they mightintroduce into road sector management, and integrate theiractivities into an initiative that is locally owned and led.

5. Support the Process of Change

a. Develop Widespread LocalUnderstanding

The public is generally well aware of poor road main-tenance, but is unaware of the reasons for it. Governmentofficials are often well aware of the difficulties faced, butare unaware of the potential solutions. Lack of understand-ing leads to strong public reaction against increases incharges, such as fuel taxes and vehicle licensing fees, be-cause the public does not believe (often with reason) thatincreasing the charges will solve the problem. Insufficientknowledge by government officials and the public can leadto implementation of inappropriate solutions that leave theproblems unresolved.

An information campaign to develop knowledge andunderstanding is an important step toward sustainablechange. Information campaigns can take different forms,and all possible avenues should be considered: televisiondiscussions and debates, series of newspaper articles, andworkshops and seminars at all levels (national meetings,local community groups, specialist interest groups such astransport operators). Preparation and use of standardizedpresentation and discussion materials can ensure that thesubject matter discussed is consistent for all groups.

b. Exchange Experiences

To date, developing countries have had little exchangeof experience and knowledge through ongoing direct dia-logue; their channels of communications have been viaintermediaries: development agency experts and consult-ants moving from country to country; and one-off regionalor country workshops sponsored by development agen-cies. Self-reliance has been absent. A body of local knowl-edge is building in many countries, however, as experienceof implementing road sector reforms expands. By now,countries should be exchanging experience directly in an

ongoing way without the need for intermediaries.The Internet offers a low-cost medium of communi-

cations, with country-to-country exchange of knowledgethrough web pages and e-mail. The Internet is alsoincreasingly important as a means of communicationwithin countries, among stakeholders. Direct sharing ofexperiences among countries, and among stakeholders,government officials, and road users, will increase thebody of knowledge upon which the transformation forumcan base its recommendations and decisions.

c. Make Information Available

Lack of information about what is happening canproduce adverse results, especially if there are suspicionsthat decisions are not being based on objective criteria, orthat money is being misallocated or misappropriated. Thebest means to overcome this is to make appropriate infor-mation freely available, and to ensure it is accurate and upto date. Beyond being publicly available, the agenda forchange and the plan for its implementation should be ac-tively publicized. The transformation forum should wel-come the scrutiny this invites and be prepared to defendits recommendations.

The Internet should be the primary method of dis-seminating information. Although it is not yet freely avail-able to everyone, it is available to critical groups—particularly the media and nongovernment organizations,which ensure widespread dissemination of important in-formation. The Internet has the specific advantages of

• immediacy—as soon as information is on theInternet, it is available to everyone;

• uniqueness—if there is only one web site, thereis only one version of information; and

• low cost—printing and transport costs are elimi-nated, and information can be free.

d. Use External Resources Wisely

Development agencies will usually offer resources tosupport change. Offers of technical assistance and exter-nal funding should be accepted, however, only after care-ful thought about how they fit into the overall plan. If newskills are required, a plan to develop these skills shouldexist from the start, stating which skills will be developedand by whom. Prospective external assistance should be


viewed against the backdrop of when the required exper-tise could be available without assistance. The plan mustbe resilient enough to allow for critical individuals’ chang-ing jobs before the process of change is complete. It mustprovide for training of personnel to take over when cur-rent staff are promoted, retire, or change jobs.

If new equipment is needed to support road manage-ment and maintenance activities, a realistic assessmentshould be made of whether the resources and skills existlocally to operate and maintain such equipment. If exter-nal resources are required when a breakdown occurs, orwhen maintenance is required, use of the equipment willnot be sustainable once external funding ceases.Long-term replacement also needs to be considered: if localfunding may not be available to replace certain equipment,then its choice may not be appropriate.

The plan may call for external assistance and exper-tise over a long period. About 5–10 years may be neededfor sustainable change. It is unrealistic to try to anticipateall the needs that will arise and when they will arise. To beuseful, external assistance needs to be responsive to needsas and when they arise. There will often be a need for short-term skilled inputs, on demand, as and when the transfor-mation forum identifies matters needing to be addressedquickly, to keep changes on track. Conventional technicalassistance does not meet this need for short, flexible in-puts from external sources. Conventional technical assis-tance projects usually have long lead times, imposed bybudget planning, and provide intense inputs for shortperiods. Consultants follow terms of reference that wereconceived at an earlier stage and may no longer be rel-evant. Another problem is the risk of confusion arisingfrom the employment of different consultants, expressingdifferent (sometimes conflicting) views. Developmentagencies need procedures for providing short inputs, ondemand, in a manner that allows for long-term continuityof the same consultants.

6. Keep Changes on Track

a. Facilitate Public and RoadStakeholder Influence

When the process of change is open and details ofwhat is happening are freely available, stakeholders andthe general public should take an interest in ensuring thatchanges work and road conditions improve. Channels areneeded for regular communications with stakeholders, tolisten to their opinions and feedback. If the transforma-

tion forum includes effective representation of road stake-holders, and meets regularly, feedback should be easy toarrange.

b. Measure Regular Local AssessmentAgainst Established Guidelines

The transformation forum’s agenda for change canbe likened to a living organism adapting to events and theenvironment. Likewise, the transformation forum mustregularly take stock, and adapt as needed. For this pur-pose, the forum should schedule regular meetings— once,every two months.

To assist the transformation forum to assess and moni-tor progress, standard guidelines should be developed.Each meeting of the transformation forum would reviewevery item on the agenda for change; record progress madeor planned; and confirm, modify, or formulate futureactions. The agenda for change would itself be reviewed,and either confirmed or amended. Each meeting of thetransformation forum should review its own operationsand current representation.

Immediately after each meeting, official minutesshould be prepared and circulated to all stakeholders, in-cluding development agencies to disseminate and clarifyissues.

c. Audit the Office Assessment

As soon as they are available, the official minutesshould be subject to independent audit, measured againstthe same standard guidelines as used by the transforma-tion forum. This will provide a quality check for all con-cerned that the transformation forum is carrying out itsactivities as intended. The audit should cover matters suchas the following:

• whether all items on the agenda for change wereconsidered in the meeting;

• whether, based on the information presented atthe meeting, the actions recommended were inline with the guidelines;

• whether any recommendation to alter, or not toalter, the agenda for change was in line with theguidelines; and

• whether consideration of representation on thetransformation forum, and any recommendationsfor any change, were in line with the guidelines.

The audit provides some reassurance to the public,road stakeholders, and development agencies that the trans-


formation forum is acting in accordance with establishedguidelines. Without the audit, the transformation forumis accountable only in the court of public opinion.

d. Take Action When Things GoWrong

In the process described above, there are no sanc-tions if the process fails to function as intended. Realisti-cally, sanctions would be of little value since they would

stand a good chance of being overridden politically. Ratherthan try to impose sanctions after the event, the processdescribed aims to minimize the chance of failure beforethe event: to identify problems before they occur (or assoon as they occur) and to stimulate immediate remedialaction. This is why the focus is on minimizing the prob-lems of the past, and on regular and effective monitoring.

The above two-stage process—a local transformationforum deciding actions to be taken, followed by an inde-pendent audit to check the validity of the forum’s delib-erations—keeps the decision making local, but withaccountability built in, for the benefit of all concerned.This process should quickly expose any weaknesses in lo-cal understanding or decision-making capacity, so thatremedial action can be taken.


Appe

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des

ign

wor

ks-

Road

bus

ines

sm

anag

emen

t.in

clud

ing

sala

ries

and

adm

inis

trativ

eex

pens

es

- Ce

ntra

l Bud

get

assi

gnm

ents

- 50

% o

fm

otor

fuel

exc

ise

tax-

Vehi

cle

tax

paya

ble

bypr

ivat

e in

divi

dual

s(1

00%

rem

ittan

ce to

RMF)

- Ro

ad ta

x pa

yabl

e by

lega

l ent

ities

but

actu

ally

rest

ricte

d to

com

mer

cial

ente

rpris

es a

t a ra

teof

0.8

% tu

rnov

er ta

x(1

00%

rem

ittan

ce to

RMF)

- 90

% o

f veh

icle

regi

stra

tion

dutie

sHea

vy t

ruck

tol

lsan

d ex

cess

fees

(100

% re

mitt

ance

toRM

F)-

Tolls

and

con

stru

c-tio

n fe

es p

aid

onpu

blic

roa

ds-

Non

spec

ific

fore

ign

inve

stm

ents

and

gran

ts-F

unds

to b

e ra

ised

from

lotte

ries,

A m

ajor

diff

icul

ty is

that

MO

FE h

as y

et to

impl

emen

tth

e au

tom

atic

tran

sfer

of

earm

arke

d fu

nds

to th

eRM

F. F

unds

pas

s th

roug

hth

e ge

nera

l bud

get

mec

hani

sm a

nd a

re th

ussu

bjec

t to

mod

ifica

tion

base

d on

cur

rent

cas

h flo

wst

atus

and

ove

rall

stat

efu

ndin

g re

quire

men

ts. A

DB

TA 2

587-

Kyrg

yz R

epub

licre

com

men

ds th

e pe

riodi

cre

view

of t

he R

MF

impl

emen

tatio

n an

dpo

ssib

le a

men

dmen

ts, g

iven

argu

men

ts o

n ea

rmar

king

of

reve

nues

.MO

TC is

topr

oduc

e an

ann

ual b

udge

tca

lled

Road

Act

iviti

es P

lan,

whi

ch fo

rms

part

of th

ean

nual

bud

geta

ry s

ubm

is-

sion

to th

e M

OFE

. MO

TC is

also

to p

rodu

ce a

Lon

g-Te

rmCa

pita

l and

Mai

nten

ance

Plan

for R

oads

, whi

ch s

ets

out t

he re

lativ

e pr

iorit

ies

ofex

pend

iture

item

s,

Appendix 3: Review of Selected Road Funds and Road Fund Initiatives 47

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Ove

rsig

htO

vers

ight

Ove

rsig

htO

vers

ight

Ove

rsig

htTTTT T y

pe o

f En

tity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

Boa

rdB

oard

Boa

rdB

oard

Boa

rdTTTT T y

pe o

f W

ype

of W

ype

of W

ype

of W

ype

of W

ork

ork

ork

ork

ork

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esA

gen

cyA

gen

cyA

gen

cyA

gen

cyA

gen

cyC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edof

Rev

enue

of R

even

ueof

Rev

enue

of R

even

ueof

Rev

enue

con’

t.Ky

rgyz

Rep

ublic

d

- So

cial

wel

fare

impr

ovem

ents

in th

ero

ad s

ecto

r-

Conf

eren

ces

and

othe

r in

tern

atio

nal

gath

erin

gs

pena

lties

, cha

ritie

s,pa

rkin

g fe

es a

ndfin

es, a

nd lo

cal

budg

et s

ubsi

dies

be re

view

ed a

nd re

vise

dan

nual

ly. A

DB

TA 3

065-

Kyrg

yz R

epub

lic re

com

men

-da

tions

:-

Crea

te a

Man

agem

ent

Serv

ices

Dire

ctor

ate

ofM

OTC

to b

e in

cha

rge

ofda

ily R

MF

oper

atio

ns;

- Se

t up

of a

Boa

rd o

f Roa

dFu

nd C

omm

issi

oner

s to

prov

ide

polic

y di

rect

ions

;-

Fund

RM

F fro

m ro

ad u

ser

char

ges

and

excl

ude

busi

ness

tur

nove

r ta

x;-

Dev

elop

sys

tem

atic

proc

edur

es fo

r col

lect

ion

and

trans

mitt

al o

f RM

F to

bank

acc

ount

; and

- Fo

rmul

ate

allo

catio

ncr

iteria

that

sho

uld

refle

ctw

eigh

ted

traffi

c vo

lum

es,

with

in th

e co

ntex

t of b

oth

mai

nten

ance

requ

irem

ents

and

road

use

r cha

rges

inco

mes

.


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Ove

rsig

htO

vers

ight

Ove

rsig

htO

vers

ight

Ove

rsig

htTTTT T y

pe o

f En

tity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

Boa

rdB

oard

Boa

rdB

oard

Boa

rdTTTT T y

pe o

f W

ype

of W

ype

of W

ype

of W

ype

of W

ork

ork

ork

ork

ork

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esA

gen

cyA

gen

cyA

gen

cyA

gen

cyA

gen

cyC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edof

Rev

enue

of R

even

ueof

Rev

enue

of R

even

ueof

Rev

enue

Lao

Peop

le’s

Dem

ocra

tic R

epub

lice

Mon

golia

f

Dra

ft Pr

ime

Min

iste

rial D

ecre

e fo

rth

e Es

tabl

ishm

ent o

fa

Road

Mai

nten

ance

Fund

(RM

F)

Min

istry

of C

omm

uni-

catio

n, T

rans

port,

Post

and

Con

stru

ctio

n(M

CTPC

)

- Ro

utin

e m

aint

e-na

nce,

em

erge

ncy

and

perio

dic

mai

nten

ance

wor

ksan

d ad

min

istra

tion-

Rene

wal

wor

ks (

afte

ral

l mai

nten

ance

wor

ks h

ave

been

prov

ided

for)

- Ro

adsa

fety

pro

ject

s an

dac

tiviti

es-

Oth

erex

pens

es in

curre

d in

adm

inis

terin

g th

eRM

F -

Oth

er a

ctiv

ities

as th

e M

inis

ter m

ayap

prov

e

- Su

rcha

rge

on th

epr

ices

of g

asol

ine

and

dies

el fu

el (

over

and

abov

e or

dina

ry im

port

dutie

s, g

ener

al s

ales

taxe

s, a

nd o

ther

cha

rges

on fu

el)

- H

eavy

veh

icle

surc

harg

e To

lls o

n ro

ads

who

lly p

ublic

ly fi

nanc

ed-

Inte

rnat

iona

l tra

nsit

char

ges

that

mig

ht b

ein

trodu

cedA

ny o

ther

road

use

r cha

rges

assi

gned

by

the

Nat

iona

lAs

sem

bly

- Ai

d pr

ovid

er fu

ndin

g

Polic

y w

orks

hop

on R

MF

was

hel

d in

Jun

e 19

99 a

ndth

e co

nsul

tant

sub

mitt

edhi

s fin

al re

port,

Est

ablis

h-m

ent o

f a R

oad

Mai

nte-

nanc

e Fu

nd, t

o M

CTPC

inSe

ptem

ber 1

999.

- Co

nstru

ctio

n/re

habi

litat

ion

ofro

ads

and

brid

ges

- Ro

ad m

aint

enan

ce-

Road

des

ign

- Re

sear

ch a

nd la

bex

pend

iture

s-Eq

uipm

ent

- Co

unte

rpar

t po

rtion

of fo

reig

n lo

anpr

ojec

ts

- Fu

el ta

xes

on g

asol

ine

(app

rox.

5%

of t

he re

tail

tax)

and

die

sel (

appr

ox.

0.4%

)-

Annu

al V

ehic

le T

axde

term

ined

by

the

type

or w

eigh

t of t

he v

ehic

le(v

ehic

le li

cens

e fe

es n

otea

rmar

ked

for R

MF

but

appr

opria

ted

to t

heAi

mak

s an

d Ul

aanb

aata

rM

unic

ipal

ity)

- 25

–30%

of t

otal

fuel

tax

colle

ctio

n al

loca

ted

to th

e RM

F (b

ased

on

ADB

TA N

os. 2

380

and2

827

estim

ates

for

1996

/97

and1

998.

)-

Appr

opria

tions

from

stat

e bu

dget

mai

nly

asco

unte

rpar

t fu

nds

for

fore

ign-

assi

sted

proj

ects

.

Gov

ernm

ent h

as a

n ex

istin

gRo

ad a

nd R

oad

Tran

spor

tPo

licy

Stat

emen

t and

ism

ainl

y ba

sed

on tw

o m

ain

piec

es o

f leg

isla

tion

– Th

e Ro

ad A

ct a

nd T

heRo

ad T

rans

port

Act,

both

form

ulat

ed w

ith A

DB’

sas

sist

ance

.AD

B TA

326

8-M

ongo

lia: P

olic

y Su

ppor

t in

the

Road

Sec

tor P

roje

ct w

illpr

ovid

e as

sist

ance

in th

ees

tabl

ishm

ent o

f the

Roa

dBo

ard,

with

in th

e ov

eral

lco

ntex

t of i

ts s

cope

, whi

chin

clud

es im

prov

ing

the

man

agem

ent o

f the

RM

F. T

Are

cent

ly s

tarte

d, w

ithco

ntra

ct s

igni

ng in

Mar

ch20

00.

Dep

artm

ent

with

inth

e M

CTPC

will

be

form

ed to

adm

inis

ter

the

RMF.

7-m

embe

r Ste

erin

gCo

mm

ittee

(pub

lican

d pr

ivat

e se

ctor

s)ap

poin

ted

by th

ePr

ime

Min

iste

r fro

mM

inis

try o

f Fin

ance

,M

CTPC

, pro

vinc

ial

auth

oriti

es, C

ham

ber

of C

omm

erce

and

Indu

stry

, roa

d an

dpa

ssen

ger

trans

port

oper

ator

s, a

nd th

ege

nera

l pub

lic.

Chai

rper

son

to b

eno

min

ated

by

MCT

PC.

Legi

slat

ion

(Roa

dAc

t, de

velo

ped

with

assi

stan

ce fr

om A

DB

TA) e

nact

ed in

Febr

uary

199

8in

clud

es p

rovi

sion

sfo

r (i)

road

sec

tor

orga

niza

tions

and

inst

itutio

nal

juris

dict

ions

, (ii)

roa

din

frast

ruct

ure,

incl

udin

g cl

assi

fica-

tion

and

tech

nica

lst

anda

rds;

and

(iii

)ro

ad fi

nanc

ing.

Dep

artm

ent o

f Roa

ds(D

OR)

Div

isio

n w

ithin

the

DO

R (1

sta

ff in

DO

RAd

min

istra

tion

and

Fina

nce

Div

isio

n is

assi

gned

to ta

kech

arge

of t

he R

MF

acco

untin

g w

ork.

)

Auto

nom

ous

Boar

d to

be c

reat

ed b

y 30

June

200

1, e

xpec

ted

to b

e co

mpo

sed

ofre

pres

enta

tives

from

the

Min

istri

es o

fFi

nanc

e, In

frast

ruc-

ture

Dev

elop

men

t,an

d D

OR;

and

road

user

s


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Ove

rsig

htO

vers

ight

Ove

rsig

htO

vers

ight

Ove

rsig

htTTTT T y

pe o

f En

tity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

Boa

rdB

oard

Boa

rdB

oard

Boa

rdTTTT T y

pe o

f W

ype

of W

ype

of W

ype

of W

ype

of W

ork

ork

ork

ork

ork

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esA

gen

cyA

gen

cyA

gen

cyA

gen

cyA

gen

cyC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edof

Rev

enue

of R

even

ueof

Rev

enue

of R

even

ueof

Rev

enue

Nep

alg

Paki

stan

h

Dra

ft le

gisl

atio

npr

esen

ted

by C

abin

etto

Par

liam

ent o

n 24

Janu

ary

2000

Auto

nom

ous

Boar

d,m

ajor

ity p

rivat

e se

ctor

with

pub

lic s

ecto

rre

pres

enta

tives

.Ad

viso

ry c

omm

ittee

to b

e cr

eate

d,co

mpo

sed

of 6

gove

rnm

ent o

ffici

als

and

the

boar

dch

airm

an s

hall

becr

eate

d

- Ro

ad m

aint

enan

ce-

Mai

nten

ance

of

dist

rict a

nd u

rban

road

s on

cos

t-sh

arin

gba

sis

- Pr

ovid

e co

unte

r-par

tfu

nds

for

aid

prov

ider

-fu

nded

pro

ject

s-

Road

saf

ety

proj

ects

Enfo

rcem

ent w

ork

(impl

emen

tatio

n of

stan

dard

s)-

Rese

arch

rela

ting

to m

aint

enan

ce a

ndre

habi

litat

ion

Adm

inis

tratio

n

- Ro

ad u

ser c

harg

es-

Levy

on

fuel

use

d by

trans

port

vehi

cles

- Fi

nes

for

over

load

ing

- In

tern

atio

nal t

rans

itfe

es

Annu

al ro

ad m

aint

enan

cepr

ogra

m is

revi

ewed

and

appr

oved

by

the

Boar

d an

dsu

bmitt

ed to

the

Gov

ern-

men

t (th

roug

h th

e M

inis

tryof

Wor

ks a

nd T

rans

port)

.

Road

mai

nten

ance

and

reha

bilit

atio

nne

eds

- Fu

el le

vy-

Road

char

ges

(axle

load

char

ges)

- An

nual

veh

icle

char

ges

- Ta

riffs

to b

e im

pose

dgr

adua

lly a

nd R

MF

toha

ve a

sta

rt-up

cap

ital

of a

roun

d PR

s1bi

llion

.

The

Gov

ernm

ent a

ppro

ved

the

RMF

conc

ept i

npr

inci

ple

in J

uly

1999

. Aw

orks

hop

on D

edic

ated

Hig

hway

Fun

d w

asco

nven

ed in

199

7.RM

F an

dRo

ad U

ser C

harg

es S

tudy

unde

rtake

n fro

m J

an. t

oO

ct. 1

998

and

the

Asso

ciat

ion

of R

oad

User

sof

Pak

ista

n fo

rmed

Oct

.19

98.A

n in

terim

Roa

d Fu

ndCe

ll w

ithin

the

Min

istry

of

Com

mun

icat

ions

set

up

inD

ec. 1

999

to h

elp

esta

blis

hth

e RM

F an

d Ro

adBo

ard.

Annu

al b

usin

ess

plan

s to

form

bas

is fo

rfu

ndin

g. P

unja

b Pr

ovin

ceex

pres

sed

its s

trong

inte

ntio

n to

cre

ate

its o

wn

RMF.

Sepa

rate

age

ncy

11 m

embe

rs:5

from

the

Gov

ernm

ent,

the

rest

from

the

priv

ate

sect

or

Dra

ft le

gisl

atio

nfo

rmul

ated

and

und

erre

view

by

the

Nat

iona

lH

ighw

ay A

utho

rity

(NH

A) a

s of

Dec

.19

99

(Pro

pose

d) p

ublic

-pr

ivat

e bo

ard

Sepa

rate

age

ncy

(aut

onom

ous

and

inde

pend

ent)

with

own

secr

etar

iat

9 m

embe

rs:4

pub

licse

ctor

and

5 p

rivat

ese

ctor

rep

rese

ntat

ives

nom

inat

ed b

y ea

chco

ncer

ned

orga

niza

-tio

n ch

airm

an to

com

e fro

m th

e pr

ivat

ese

ctor

.


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Ove

rsig

htO

vers

ight

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rsig

htO

vers

ight

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rsig

htTTTT T y

pe o

f En

tity

ype

of E

ntity

ype

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ntity

ype

of E

ntity

ype

of E

ntity

Boa

rdB

oard

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rdB

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rdTTTT T y

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f W

ype

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ype

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ype

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ork

ork

ork

ork

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n S

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eM

ain

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rce

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n S

ourc

eM

ain

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rce

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n S

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eR

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edFi

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edFi

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edof

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even

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Rev

enue

of R

even

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enue

Papu

a N

ew G

uine

aiD

raft

bill

final

ized

InAu

g. 1

996

toes

tabl

ish

a Ro

adTr

ansp

ort

Infra

stru

c-tu

re A

utho

rity

(RTI

A)co

verin

g ro

adpl

anni

ng, d

esig

n,m

aint

enan

ce, a

ndm

anag

emen

t of f

unds

appr

opria

ted

annu

ally

Road

Aut

horit

yAl

l wor

ksG

over

nmen

t’s g

ener

albu

dget

and

levi

es,

fees

, and

cha

rges

that

wou

ld b

epr

escr

ibed

by

the

boar

d to

reco

ver t

heco

sts

and

expe

nses

incu

rred

by R

TIA.

Wor

ksho

p on

Roa

dM

anag

emen

t and

Fin

ance

was

hel

d on

28–2

9 Fe

b. 2

000

onre

stru

ctur

ing

and

com

mer

-ci

alizi

ng m

anag

emen

t of

road

s fin

anci

ng a

ndop

erat

ion

of R

MF.

Wor

ksho

pre

com

men

datio

ns a

ndag

reem

ents

:-

Road

Sec

tor R

efor

m T

ask

Forc

e to

pre

pare

info

rma-

tion

pape

r on

the

wor

ksho

pfo

r Nat

iona

l Eco

nom

icCo

unci

l (N

EC) b

y M

ay 2

000

- Ta

sk F

orce

to m

eet i

nJu

ne 2

000

to d

iscu

ss th

epo

licy

for

subm

issi

on t

oN

EC, i

nclu

ding

det

aile

dim

plem

enta

tion

stra

tegy

refo

rm;

- D

edic

ated

RM

F pr

efer

red,

with

sup

plem

enta

l fun

ding

from

road

use

r cha

rges

(fuel

levy

, fee

s, c

harg

es,

etc.

)-

RMF

to b

e co

ntro

lled

byan

inde

pend

ent b

ody,

crea

ted

thro

ugh

an A

ct o

fPa

rliam

ent a

nd m

anag

ed o

nbu

sine

ss p

rinci

ples

, with

regu

lar a

udits

; priv

ate-

publ

ic s

ecto

r pa

rtner

ship

,w

ith th

e fo

rmer

hav

ing

the

maj

ority

.In

199

8, in

con

junc

tion

with

a W

orld

Ban

k lo

an,

NEC

app

rove

d cr

eatio

n of

Hig

hlan

ds H

ighw

ayRe

habi

litat

ion

Auth

ority

to

be re

spon

sibl

e fo

r pla

nnin

g,de

sign

, con

stru

ctio

n,

(Pro

pose

d) S

epar

ate

agen

cyBo

ard

to b

eap

poin

ted;

man

agin

gdi

rect

or a

nd o

ther

offic

ers.

The

pla

n w

asfo

r the

Lan

d Tr

ansp

ort

Div

isio

n of

the

Dep

artm

ent o

fTr

ansp

ort t

o be

com

eth

e Ro

ad A

utho

rity.


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

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rsig

htO

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ight

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rsig

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vers

ight

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rsig

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pe o

f En

tity

ype

of E

ntity

ype

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ntity

ype

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ntity

ype

of E

ntity

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rdB

oard

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rdB

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rdTTTT T y

pe o

f W

ype

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ype

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ype

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ype

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ork

ork

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Mai

n S

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eM

ain

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rce

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n S

ourc

eM

ain

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rce

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n S

ourc

eR

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ks/U

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esR

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gen

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cyC

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onFi

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edFi

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edFi

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edFi

nanc

edof

Rev

enue

of R

even

ueof

Rev

enue

of R

even

ueof

Rev

enue

Phili

ppin

esj

plan

ning

, des

ign,

con

stru

c-tio

n, m

aint

enan

ce, a

ndfu

ndin

g of

the

high

land

shi

ghw

ays.

Pre

para

tion

ofth

e bi

ll w

as d

elay

ed d

ue to

disr

uptio

ns in

dis

cuss

ions

betw

een

Wor

ld B

ank

and

Gov

ernm

ent.G

over

nmen

tpo

licy

stat

emen

ts c

onta

ined

in c

urre

nt d

raft

Nat

iona

lTr

ansp

ort

Infra

stru

ctur

e Pl

anin

clud

e pr

opos

als

for r

efor

man

d m

oder

niza

tion

of la

ndtra

nspo

rt se

rvic

es,

spec

ifica

lly (i

) “th

ein

stitu

tion

of a

pol

icy

ofre

cove

ring

all n

eces

sary

rout

ine

and

perio

dic

mai

nten

ance

cos

ts fo

rhi

ghw

ays”

and

(ii)

“ro

adus

er fe

es a

nd c

harg

es…

shou

ld re

flect

the

exte

nt o

fro

ad u

se a

nd ro

ad d

amag

eca

used

by

diffe

rent

cla

sses

of v

ehic

le.”

ADB

has

an o

ngoi

ng T

A (N

o.30

04-P

apua

New

Gui

nea)

on R

oad

Asse

t Man

age-

men

t Sys

tem

.

Use

of M

VUC:

- Ro

ad m

aint

enan

cean

d im

prov

emen

t of

drai

nage

- In

stal

latio

nof

traf

fic li

ghts

and

road

saf

ety

devi

ces

- Ai

r Pol

lutio

n co

ntro

l.(i)

Spe

cial

Roa

dSu

ppor

t Fun

d –

70%

- Veh

icle

cha

rges

- Pe

nalti

es fo

rov

erlo

adin

g st

ipul

ated

in th

e dr

aft a

ct,

impo

sing

an

amou

nteq

uiva

lent

to 2

5% o

fM

VUC

on o

verlo

aded

truck

s an

d tra

ilers

.

The

repo

rt of

the

Bica

mer

alCo

nfer

ence

Com

mitt

ee fo

rth

e Ro

ad U

sers

Tax

was

appr

oved

by

the

Sena

te.

How

ever

, bot

h H

ouse

s of

Cong

ress

hav

e ye

t to

act o

nth

e dr

aft l

egis

latio

n.Th

eLo

wer

Hou

se a

ppro

ved

the

pass

age

of th

e Ro

ad U

sers

Dra

ft le

gisl

atio

nim

posi

ng a

Mot

orVe

hicl

e Us

er’s

Cha

rge

(MVU

C) o

n ow

ners

of

all t

ypes

of m

otor

vehi

cles

. Dra

ft bi

ll to

incl

ude

crea

tion

ofRo

ad B

oard

and

of 4

spec

ial t

rust

acc

ount

s

Publ

ic-p

rivat

e Bo

ard

(to

be o

rgan

ized

byth

e Pr

esid

ent)

Div

isio

n in

the

Dep

artm

ent o

f Pub

licW

orks

and

Hig

hway

s(D

PWH

) (n

eeds

to b

ecl

arifi

ed)

7-m

embe

r Boa

rdco

mpo

sed

of th

ese

cret

arie

s of

DPW

H(e

x-of

ficio

hea

d),

Fina

nce,

Bud

get a

ndM

anag

emen

t, an

dTr

ansp

orta

tion

and

Com

mun

icat

ions

(DO

TC) (

as e

x-of

ficio


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

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able

A3

.1.

able

A3

.1.

able

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.1.

able

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.1.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

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l B

asis

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rsig

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ight

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rsig

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ight

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rsig

htTTTT T y

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tity

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ntity

ype

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ntity

ype

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ntity

ype

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ntity

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rdB

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rdB

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rdTTTT T y

pe o

f W

ype

of W

ype

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ype

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ype

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ork

ork

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ork

ork

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n S

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eM

ain

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rce

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n S

ourc

eM

ain

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rce

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n S

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eR

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pdat

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nanc

edFi

nanc

edFi

nanc

edFi

nanc

edof

Rev

enue

of R

even

ueof

Rev

enue

of R

even

ueof

Rev

enue

of fu

nds

to b

e us

edex

clus

ivel

y fo

r the

mai

nten

ance

of,

and

impr

ovem

ent o

fdr

aina

ge o

f, na

tiona

lpr

imar

y ro

ads.

Rem

aini

ng 3

0% fo

rm

aint

enan

ce a

ndim

prov

emen

t of

drai

nage

of n

atio

nal

seco

ndar

y ro

ads

thro

ugho

ut t

heco

untry

.(ii

) Spe

cial

Loc

al R

oad

Fund

– to

be

appo

rtion

ed t

opr

ovin

cial

and

city

gove

rnm

ents

inac

cord

ance

with

vehi

cle

popu

latio

n an

dsi

ze o

f roa

d ne

twor

k,to

be

used

exc

lusi

vely

for m

aint

enan

ce o

flo

cal r

oads

, tra

ffic

man

agem

ent,

and

road

saf

ety

devi

ces.

pass

age

of th

e Ro

ad U

sers

Tax

per n

ews

repo

rt 7

June

2000

.

spec

ial t

rust

acc

ount

sin

Nat

iona

l Tre

asur

yfo

r (i)

Spec

ial R

oad

Supp

ort F

und,

(ii)

Spec

ial L

ocal

Roa

dFu

nd, (

iii) S

peci

alRo

ad S

afet

y Fu

nd,

and

(iv) S

peci

alVe

hicl

e Po

llutio

nCo

ntro

l Fun

d

mem

bers

). R

emai

ning

3 to

com

e fro

mtra

nspo

rt an

d m

otor

ist

orga

niza

tions

to b

eap

poin

ted

by th

ePr

esid

ent

upon

reco

mm

enda

tion

ofD

PWH

and

DO

TC.

Dra

ft le

gisl

atio

n on

“Nat

iona

l Hig

hway

sAc

t” h

as b

een

prep

ared

(th

irdve

rsio

n as

of O

ctob

er19

99)

with

ass

ista

nce

from

the

ADB.

Sri L

anka

k


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

able

A3

.1.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

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rsig

htO

vers

ight

Ove

rsig

htO

vers

ight

Ove

rsig

htTTTT T y

pe o

f En

tity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

Boa

rdB

oard

Boa

rdB

oard

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rdTTTT T y

pe o

f W

ype

of W

ype

of W

ype

of W

ype

of W

ork

ork

ork

ork

ork

Mai

n S

ourc

eM

ain

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rce

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n S

ourc

eM

ain

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rce

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n S

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eR

emar

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pdat

esR

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gen

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onC

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siti

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siti

onFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edof

Rev

enue

of R

even

ueof

Rev

enue

of R

even

ueof

Rev

enue

Uzbe

kist

anl

- Ro

utin

e an

d pe

riodi

cm

aint

enan

ce- N

ewco

nstru

ctio

n-Pr

ocur

emen

t of n

eweq

uipm

ent (

such

as

asph

alt/c

emen

t pla

nts)

- Tr

aini

ng a

nd re

leva

ntre

sear

ches

- Ta

x on

reve

nues

of

all e

nter

pris

es-

Turn

over

tax

on ro

adtra

nspo

rt en

terp

rises

-En

try a

nd d

ocum

enta

-tio

n fe

e ch

arge

d to

fore

ign

vehi

cles

- Ve

hicl

e sa

les

taxe

sfo

r bu

ses

Mos

t of t

he R

MF

isco

llect

ed b

y pr

ovin

cial

uni

tsof

Uza

vtoy

ul, t

he m

inis

teria

l-le

vel g

over

nmen

t age

ncy

inch

arge

of r

oads

and

trans

port,

and

rem

itted

to

the

loca

l RM

F ac

coun

tad

min

iste

red

by th

e un

its.

Onl

y 24

% is

col

lect

ed b

yna

tiona

lly b

ased

org

aniza

-tio

ns a

nd re

mitt

ed to

the

cent

ral R

MF.

The

RMF

was

env

isio

ned

tobe

tran

sfer

red

from

Uzav

toyu

l to

the

Road

Boa

rdby

1 J

anua

ry 2

000;

the

Road

Boa

rd to

be

mad

eop

erat

iona

l by

end

2000

.AD

B TA

311

8 ai

ms

to a

ssis

tRo

ad B

oard

in p

erfo

rmin

gits

gov

erna

nce

func

tions

,in

clud

ing

com

petit

ive

bidd

ing

proc

edur

es a

ndpe

rform

ance

con

tract

s.

Dec

ree

No.

334

issu

ed b

y th

e Ca

bine

tof

Min

iste

rs 5

Jul

y19

93

Cabi

net o

f Min

iste

rsBo

ard

esta

blis

hed

with

in C

abin

et o

fM

inis

ters

and

cha

ired

by th

e D

eput

y Pr

ime

Min

iste

r in

char

ge o

fth

e ro

ad s

ecto

r; it

com

pris

es 1

1 se

nior

gove

rnm

ent o

ffici

als

as m

embe

rs

Not

e:Fo

rmat

of t

able

ada

pted

from

Heg

gie,

Ian

G. 1

995.

Man

agem

ent a

nd F

inan

cing

of R

oads

: An

Agen

da fo

r Ref

orm

. Tec

hnic

al P

aper

275

. Was

hing

ton,

D.C

.: W

orld

Ban

k, t

able

s 7.

4 an

d 7.

5, p

p. 8

2–83

; and

Heg

gie,

Ian

G.,

and

Pier

s Vi

cker

s. 1

998.

Com

mer

cial

Man

agem

ent a

nd F

inan

cing

of R

oads

. Tec

hnic

al P

aper

409

. Was

hing

ton,

D.C

.: W

orld

Ban

k. T

able

s 8.

1 an

d 8.

2, p

p. 8

2–83

.

Sour

ces:

aW

orld

Ban

k. 1

999.

Vid

eoco

nfer

ence

on

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d Fu

nds

and

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: Hig

hlig

hts

of D

iscu

ssio

n on

Indi

an S

cena

rio. W

ashi

ngto

n, D

.C. (

with

par

ticip

atio

n of

offi

ces

in W

ashi

ngto

n D

.C.,

New

Del

hi, I

slam

abad

, and

Kat

hman

du; a

ndM

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run,

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i, an

d A.

D. N

arai

n. 1

999.

Ded

icat

ed R

oad

Fund

s B

oard

in In

dia.

New

Del

hi: W

orld

Ban

k.b

Dra

ft N

atio

nal R

oad

Mai

nten

ance

Fun

d Ad

min

istr

atio

n B

ill fo

r th

e H

ashe

mite

Kin

gdom

of J

orda

n. A

mm

an; S

ylte

, Ole

, and

Pie

rs V

icke

rs. 1

997.

Ope

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odal

ities

for t

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ropo

sed

Road

Fun

d in

the

Has

hem

ite K

ingd

omof

Jor

dan .

Rep

ort

subm

itted

to

the

Wor

ld B

ank.

Apr

il.c

Asia

n D

evel

opm

ent B

ank.

199

6. P

ropo

sed

Loan

and

TA

Gra

nt 2

631-

Kaza

khst

an fo

r Roa

d Re

habi

litat

ion

Proj

ect.

6 Au

gust

.d

Asia

n D

evel

opm

ent

Ban

k. 1

997.

TA

No.

258

7-Ky

rgyz

: Ins

titut

iona

l Str

engt

heni

ng o

f Roa

d Se

ctor

Pro

ject

. Fin

al R

epor

t, p

repa

red

by F

INN

RA.

Aug

ust;

Asi

an D

evel

opm

ent

Ban

k. 1

999.

TA

No.

306

5-Ky

rgyz

: Po

licy

Supp

ort i

nth

e Tr

ansp

ort S

ecto

r. In

terim

Tw

o R

epor

t Pre

pare

d by

PAD

ECO

Co.

, Ltd

. Dec

embe

r.e

Rob

inso

n, R

icha

rd. 1

999.

Est

ablis

hmen

t of a

Roa

d M

aint

enan

ce F

und.

Fin

al R

epor

t (Is

sue

3) s

ubm

itted

to L

ao P

eopl

e’s

Dem

ocra

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epub

lic-M

inis

try

of C

omm

unic

atio

ns, T

rans

port

atio

n, P

ost a

nd C

onst

uctio

n. U

nite

dKi

ngdo

m;

Gw

illia

m,

K.M

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Com

men

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Asia

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ank.

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Supp

ort i

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ad S

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ject

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eptio

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epor

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repa

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by S

hela

dia

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ciat

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nc. a

nd T

rans

port

atio

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d Ec

onom

ic R

esea

rch

Asso

ciat

es, I

nc.

April

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Dra

ft B

ill fo

r the

Est

ablis

hmen

t and

Ope

ratio

n of

Roa

d B

oard

. 200

0. P

rese

nted

by

the

Cab

inet

to th

e Pa

rliam

ent.

Kat

hman

du. 2

4 Ja

nuar

y.h

Wor

ld B

ank.

199

9. M

inut

es o

f Mee

ting

on N

atio

nal R

oad

Fund

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form

atio

n D

isse

min

atio

n W

orks

hop

held

on

15 D

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orks

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cott

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sian

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k. 2

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ceed

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on

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200

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iona

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nom

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ax. 1

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arch

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199

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pine

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raft

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ort,

pre

pare

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Sco

tt W

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patr

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ass

ocia

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ar V

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nc. M

arch

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ft N

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nal H

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Act

(as

of 2

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999)

.l

Asia

n D

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opm

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ank.

199

8. P

ropo

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and

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nt fo

r TA

3118

: Ins

titut

iona

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nd P

olic

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ppor

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ad n

etw

ork

that

is in

a m

aint

aina

ble

cond

ition

and

not

fund

ed th

roug

hex

tern

al a

ssis

tanc

e w

ill b

e ra

ised

from

the

road

use

r cha

rge.

It is

est

imat

edth

at th

is w

ill re

quire

an

incr

ease

in b

oth

the

fuel

levy

and

hea

vy v

ehic

le c

harg

eof

app

rox.

20%

per

yea

r.The

con

sulta

ntpr

opos

ed 2

impl

emen

tatio

n st

ages

. The

first

and

imm

edia

te ta

sks

are

for

Gov

ernm

ent t

o ac

cept

the

repo

rt, M

OF

and

MCT

PC to

agr

ee o

n th

e op

enin

g of

a sp

ecia

l acc

ount

, dra

fting

of R

MF

Secr

etar

iat,

proc

edur

es, a

ppoi

ntin

gco

mm

ittee

s an

d te

chni

cal a

ssis

tanc

ete

am, i

nclu

ding

con

duct

ing

capa

city

build

ing

prog

ram

. Sta

ge 2

, sta

rting

Sept

embe

r 200

0, w

ould

focu

s on

actu

al fu

nds

flow,

fund

ing

activ

ities


TTTT T abl

e A3

.2.

able

A3

.2.

able

A3

.2.

able

A3

.2.

able

A3

.2.

Fina

ncia

l Ar

rang

men

ts f

or R

oad

Mai

nten

ance

FFi

nanc

ial

Arra

ngm

ents

for

Roa

d M

aint

enan

ce F

Fina

ncia

l Ar

rang

men

ts f

or R

oad

Mai

nten

ance

FFi

nanc

ial

Arra

ngm

ents

for

Roa

d M

aint

enan

ce F

Fina

ncia

l Ar

rang

men

ts f

or R

oad

Mai

nten

ance

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

es

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Siz

e of

FS

ize

of F

Siz

e of

FS

ize

of F

Siz

e of

Fue

lue

lue

lue

lue

lW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

F ueluel

uel

uel

uel

Esti

mat

edEs

tim

ated

Esti

mat

edEs

tim

ated

Esti

mat

edD

epos

itD

epos

itD

epos

itD

epos

itD

epos

itA

udit

ing

Aud

itin

gA

udit

ing

Aud

itin

gA

udit

ing

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Annu

al R

even

ueAn

nual

Rev

enue

Annu

al R

even

ueAn

nual

Rev

enue

Annu

al R

even

ueM

echa

nism

Mec

hani

smM

echa

nism

Mec

hani

smM

echa

nism

Req

uire

men

tR

equi

rem

ent

Req

uire

men

tR

equi

rem

ent

Req

uire

men

t

Sept

embe

r 200

0, w

ould

focu

s on

actu

al fu

nds

flow,

fund

ing

activ

ities

take

n ov

er u

nder

new

arra

ngem

ents

,an

d co

ntin

uing

dev

elop

men

t of

proc

esse

s an

d pr

oced

ures

, aw

aren

ess

cam

paig

ns, a

nd c

apac

ity-b

uild

ing

prog

ram

.By

Oct

ober

200

1, th

e RM

FD

ecre

e w

as to

hav

e be

en is

sued

, alo

ngw

ith th

e fo

rmal

app

oint

men

t of t

heSt

eerin

g Co

mm

ittee

and

issu

ance

of

RMF

regu

latio

ns.

Mon

golia

Sinc

e a

gove

rnm

ent e

ntity

is re

spon

sibl

e fo

r the

RM

F,it

is a

ssum

ed th

at a

udit

will

be c

ondu

cted

by

the

Audi

tor G

ener

al. N

oin

form

atio

n w

as p

rovi

ded

inth

e av

aila

ble

mat

eria

l.

Fuel

Tax

:-

Gas

olin

e –

5% o

f ret

ail

pric

e (M

NT2

3,02

5 pe

rto

n of

die

sel

Estim

ates

for 1

996

indi

cate

that

app

rox.

US$2

.14

mill

ion

was

pai

dby

road

use

rs to

the

gene

ral b

udge

t in

the

form

of f

uel t

axes

and

annu

al v

ehic

le ta

xes.

An

addi

tiona

l US$

6.4

mill

ion

was

gen

erat

ed fr

omim

port

dutie

s an

d VA

T on

vehi

cles

, par

ts, t

ires,

etc

.In

199

8, th

e am

ount

allo

cate

d w

as M

NT5

.9bi

llion

, whi

ch is

onl

y 54

%of

wha

t is

need

ed, p

erD

OR.

Sepa

rate

DO

R Ro

ad F

und

acco

unt i

n Tr

ade

and

Dev

elop

men

t Ban

k

A st

udy

was

mad

e to

ass

ist D

OR

inid

entif

ying

oth

er o

ptio

ns to

add

ress

the

finan

cing

gap

. A tw

o-st

ep a

ppro

ach

was

reco

mm

ende

d: (i

) adj

ust t

he p

erce

nt-

age

of th

e fu

el ta

x al

loca

ted

to th

e RM

F(c

urre

ntly

nea

r 25%

, and

(ii)

rais

eve

hicl

e lic

ense

fees

to b

ette

r ref

lect

the

dam

age

caus

ed b

y ve

hicl

e ty

pe a

ndw

eigh

t. AD

B TA

Nos

. 238

0 an

d 29

27co

nclu

ded

that

fuel

taxe

s ar

e ad

equa

tefo

r roa

d se

ctor

nee

ds, b

ut th

eal

loca

tion

to th

e RM

S is

not

. An

incr

ease

in a

lloca

tion

was

ther

efor

ere

com

men

ded.

The

RM

F is

the

only

sour

ce o

f cur

rent

fund

ing

for a

ll ro

adw

orks

and

hen

ce, m

aint

enan

ceex

pend

iture

s ha

ve e

ven

low

er p

riorit

y in

term

s of

allo

catio

n.

Gov

ernm

ent

thro

ugh

min

istry

of F

inan

ce

Nep

alAu

dit t

o be

con

duct

ed b

yAu

dito

r Gen

eral

or

com

mitt

ee a

ppoi

nted

by

him

.

Info

not

ava

ilabl

eIn

fo n

ot a

vaila

ble

Dep

osits

in a

com

mer

cial

bank

acc

ount

des

igna

ted

byth

e Ad

viso

ry C

omm

ittee

Boar

d to

det

erm

ine

reco

mm

ende

d ro

adan

d fu

el c

harg

es,

pena

lties

toG

over

nmen

t,in

clud

ing

chan

ges.


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.2.

able

A3

.2.

able

A3

.2.

able

A3

.2.

able

A3

.2.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Siz

e of

FS

ize

of F

Siz

e of

FS

ize

of F

Siz

e of

Fue

lue

lue

lue

lue

lW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

F ueluel

uel

uel

uel

Esti

mat

edEs

tim

ated

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mat

edEs

tim

ated

Esti

mat

edD

epos

itD

epos

itD

epos

itD

epos

itD

epos

itA

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ing

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itin

gA

udit

ing

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itin

gA

udit

ing

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Annu

al R

even

ueAn

nual

Rev

enue

Annu

al R

even

ueAn

nual

Rev

enue

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al R

even

ueM

echa

nism

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hani

smM

echa

nism

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hani

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nism

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uire

men

tR

equi

rem

ent

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uire

men

tR

equi

rem

ent

Req

uire

men

t

Paki

stan

Inde

pend

ent f

inan

cial

and

tech

nica

l aud

its(P

ropo

sed)

Roa

dm

aint

enan

ce ta

riff (

as o

fD

ecem

ber 1

999)

:-

PRs

0.11

per

lite

r on

gaso

line,

PRs

0.2

1 p

erlit

er o

n di

esel

- Ax

le lo

ad c

harg

es o

fPR

s39,

800/

2xl t

ruck

,PR

s75,

400/

3xl t

ruck

,PR

s110

.800

per

mul

tiax

le-a

rticu

late

d tru

ck (o

rPR

s1.1

2/lit

er o

n di

esel

) -

Gra

duat

ed a

nnua

l per

vehi

cle

char

ges

ofPR

s1,6

00–1

6,00

0 (w

ithra

tiona

lizat

ion

of e

xistin

gpr

ovin

cial

road

use

tarif

fs)

(Pro

pose

d) B

oard

to

have

aut

horit

y to

dete

rmin

e le

vel o

fta

riffs

, mai

nten

ance

requ

irem

ents

, cos

t-sh

arin

g an

d re

venu

eal

loca

tion,

incl

udin

gpo

licy

setti

ng,

finan

cial

man

age-

men

t

Info

not

ava

ilabl

eSe

para

te a

ccou

nt

Papu

a N

ewG

uine

aRe

gula

r gov

ernm

ent a

udits

Info

not

ava

ilabl

e(P

ropo

sed)

RTI

Aw

ould

(i)

levy

tolls

and

othe

r cha

rges

for

the

use

of b

ridge

s,fe

rries

, or t

unne

lsfo

rmin

g pa

rt of

the

road

tra

nspo

rtin

frast

ruct

ure,

and

(ii)

pres

crib

e le

vies

and

char

ges

tore

cove

r any

cos

tsan

d ex

pens

es.

Info

not

ava

ilabl

eIn

fo n

ot a

vaila

ble

The

prop

osed

bill

mad

e se

para

tepr

ovis

ion

for t

he re

ceip

t, ad

min

istra

tion,

and

disb

urse

men

t of f

unds

of t

he R

TIA.

In a

dditi

on, i

t pro

vide

d fo

r the

form

ulat

ion

of re

gula

tions

on

vario

usm

atte

rs s

uch

as “

(d)

fees

for t

he u

se o

fro

ad t

rans

port

infra

stru

ctur

e.”

Fina

lre

finem

ents

in th

e dr

aft b

ill w

ere

mad

ein

199

6; h

owev

er, t

he b

ill h

as y

et to

be

pres

ente

d to

Par

liam

ent f

or e

nact

men

t.

Phili

ppin

esG

over

nmen

t aud

itD

raft

bill

prov

ides

for

the

Pres

iden

t to

adju

st th

e ra

tes.

Afte

r the

four

th y

ear,

the

Pres

iden

t may

adju

st ra

tes

to re

flect

but n

ot e

xcee

d th

ean

nual

rate

of

incr

ease

of t

heco

nsum

er p

rice

Peso

s 3.

35 b

illio

n fro

mro

ad u

sers

tax

(app

rox.

US$8

0.3

mill

ion

atP4

1.7

= U

S$1)

All M

VUCs

col

lect

ed to

be

depo

site

d in

4 s

peci

al tr

ust

acco

unts

in th

e N

atio

nal

Trea

sury

:(1

) Sp

ecia

l Roa

d Su

ppor

tFu

nd: 8

0%(2

) Spe

cial

Loc

al R

oad

Fund

: 5%

(3) S

peci

al R

oad

Safe

tyFu

nd: 7

.5%

DPW

H a

nd D

OTC

to p

repa

re th

eIm

plem

entin

g Ru

les

and

Regu

latio

ns(IR

R) w

ithin

30

days

from

the

effe

ctiv

enes

s of

the

Act.

DPW

H to

prep

are

IRR

for f

unds

(1)

, (2)

, and

(3)

and

DO

TC to

pre

pare

the

ICCs

for t

heco

llect

ion

of th

e M

VUC

and

use

of fu

nd(4

).The

4 s

peci

al fu

nds

to b

e di

stin

ctan

d se

para

te fr

om a

nd in

add

ition

toan

y an

nual

app

ropr

iatio

n gi

ven

to th

e


Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

Con

’t. T

able

A3

.2.

able

A3

.2.

able

A3

.2.

able

A3

.2.

able

A3

.2.

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Siz

e of

FS

ize

of F

Siz

e of

FS

ize

of F

Siz

e of

Fue

lue

lue

lue

lue

lW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

F ueluel

uel

uel

uel

Esti

mat

edEs

tim

ated

Esti

mat

edEs

tim

ated

Esti

mat

edD

epos

itD

epos

itD

epos

itD

epos

itD

epos

itA

udit

ing

Aud

itin

gA

udit

ing

Aud

itin

gA

udit

ing

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Annu

al R

even

ueAn

nual

Rev

enue

Annu

al R

even

ueAn

nual

Rev

enue

Annu

al R

even

ueM

echa

nism

Mec

hani

smM

echa

nism

Mec

hani

smM

echa

nism

Req

uire

men

tR

equi

rem

ent

Req

uire

men

tR

equi

rem

ent

Req

uire

men

t

inde

x. A

djus

tmen

tsm

ay b

e m

ade

not

mor

e th

an o

nce

ever

y 5

year

s.

Fund

: 7.5

%(4

) Spe

cial

Veh

icle

Pollu

tion

Cont

rol F

und:

7.5%

Fund

s (1

), (2

), an

d (3

) w

illbe

und

er D

PWH

; whi

le fu

nd(4

) w

ill b

e un

der D

OTC

.

give

n to

the

depa

rtmen

ts to

cov

erid

entif

ied

expe

nditu

res

unde

r the

dra

ftbi

ll. C

ongr

ess

will

con

tinue

toap

prop

riate

an

amou

nt in

the

budg

etfo

r DPW

H ro

ad m

aint

enan

ce w

orks

.

Sri L

anka

Info

not

ava

ilabl

eD

raft

legi

slat

ion

ofN

atio

nal H

ighw

ays

Act

(thi

rd d

raft

as o

f 29

Oct

ober

199

9) a

ims

tofa

cilit

ate

the

plan

ning

,co

nstru

ctio

n, m

aint

e-na

nce,

ope

ratio

n, a

ndde

velo

pmen

t of n

atio

nal

high

way

s. A

mon

g ot

her

thin

gs, i

t aut

horiz

es th

eRo

ad A

utho

rity

to im

pose

user

-pay

cha

rges

for t

heus

e of

nat

iona

l hig

hway

s.

Info

not

ava

ilabl

eIn

fo n

ot a

vaila

ble

Info

not

ava

ilabl

eAD

B TA

369

1-Sr

i Lan

ka: R

oad

Mai

nten

ance

Bud

getin

g an

d Ex

pend

i-tu

re C

ontro

l, is

revi

ewin

g th

e fu

ndin

g of

road

mai

nten

ance

.

Uzb

ekis

tan

Info

not

ava

ilabl

e-

1.4%

tax

on re

venu

es o

fal

l ent

erpr

ises

- 2%

turn

over

tax

on ro

adtra

nspo

rt en

terp

rises

- $4

0 en

try a

nddo

cum

enta

tion

fee

char

ged

to fo

reig

nve

hicl

es-

20%

veh

icle

sal

es ta

xfo

r bu

ses

Info

not

ava

ilabl

eIn

fo n

ot a

vaila

ble

Info

not

ava

ilabl

eAD

B TA

311

8-Uz

beki

stan

: Ins

titut

iona

lSt

reng

then

ing

and

Polic

y Su

ppor

t to

the

Road

Sec

tor (

1998

) ai

ms

to (

i) as

sist

inup

datin

g th

e ex

istin

g Ro

ad a

nd R

oad

Tran

spor

t Act

to in

clud

e re

gula

tions

on

orga

niza

tions

, jur

isdi

ctio

n of

sec

tor

inst

itutio

ns, r

oad

infra

stru

ctur

e, u

ser

char

ges,

etc

.; an

d (ii

) rev

iew

the

exis

ting

RMF

and

mak

e ap

prop

riate

reco

mm

enda

tions

.

Sou

rces

: Sam

e as

Tab

le A

3.1.


2.M

arsh

all I

slan

dsTTTT T a

ble

A3.3

.ab

le A

3.3

.ab

le A

3.3

.ab

le A

3.3

.ab

le A

3.3

.Le

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

unds

and

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

unds

and

Fun

d In

itiat

ives

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

esun

d In

itiat

ives

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Ove

rsig

htO

vers

ight

Ove

rsig

htO

vers

ight

Ove

rsig

htTTTT T y

pe o

f En

tity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

ype

of E

ntity

Boa

rdB

oard

Boa

rdB

oard

Boa

rdTTTT T y

pe o

f W

ype

of W

ype

of W

ype

of W

ype

of W

ork

ork

ork

ork

ork

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eM

ain

Sou

rce

Mai

n S

ourc

eR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esR

emar

ks/U

pdat

esA

gen

cyA

gen

cyA

gen

cyA

gen

cyA

gen

cyC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onC

ompo

siti

onFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edFi

nanc

edof

Rev

enue

of R

even

ueof

Rev

enue

of R

even

ueof

Rev

enue

Road

mai

nten

ance

Esta

blis

hmen

t of R

TF is

an

agre

ed c

ondi

tion

for t

here

leas

e of

the

third

tran

che

of th

e AD

B’s

Publ

ic S

ecto

rRe

form

Pro

gram

. Gov

ern-

men

t is

com

mitt

ed to

“est

ablis

h th

e Ro

ad U

sers

’Tr

ust F

und

to e

nsur

ead

equa

te fu

ndin

g fo

r rou

tine

and

perio

dic

road

mai

nte-

nanc

e an

d ro

ad tr

affic

safe

ty a

nd [

to]

assi

gn a

nad

equa

te p

ropo

rtion

of t

hepr

ocee

ds o

f roa

d us

erch

arge

s to

suc

h fu

nd a

ndth

e ba

lanc

e to

the

gene

ral

budg

et.”

Orig

inal

targ

et d

ate

of O

ctob

er 1

997

unof

ficia

llyex

tend

ed. N

itije

la fa

iled

toac

t on

legi

slat

ion

reco

m-

men

ded

by A

DB

TA N

o.27

56-R

MI i

n its

Aug

ust

1998

ses

sion

, was

expe

cted

to re

conv

ene

inJa

nuar

y 19

99 to

con

side

r it.

Dra

ft le

gisl

atio

nes

tabl

ishi

ng th

eRo

ads

Trus

t Fu

nd(R

TF) a

s a

spec

ial

fund

. The

dra

ft w

asin

itial

ly p

repa

red

inJu

ne 1

998

and

appr

oved

by

Cabi

net

on 2

1 Au

gust

for

subm

issi

on t

o th

eN

itije

la (

Hou

se o

fRe

pres

enta

tives

).

Non

eM

arsh

all I

slan

dsM

inis

try o

f Fin

ance

(MO

F), a

s Fu

ndAd

min

istra

tor,

Min

istry

of R

esou

rces

and

Dev

elop

men

t (M

RD)

to b

e re

spon

sibl

e fo

rth

e ro

ad m

aint

enan

ce.

Dep

artm

ent/d

ivis

ion

with

in M

OF

- Ro

ad d

amag

ech

arge

s, le

vied

on

regi

stra

tion

of m

otor

vehi

cles

bas

ed o

n ki

ndof

veh

icle

and

wei

ght,

and

equi

vale

ntst

anda

rd a

xles

- Ro

ad u

se c

harg

es,

levi

ed o

n im

porte

d fu

elus

ed fo

r m

otor

vehi

cles

- M

oney

app

ropr

iate

dby

the

Niti

jela

for

paym

ent i

nto

the

Fund

Sou

rce:

Asia

n D

evel

opm

ent B

ank.

199

8. T

A N

o. 2

756-

RM

I: In

stitu

tiona

l Str

engt

heni

ng o

f the

Tra

nspo

rt S

ecto

r. Fi

nal R

epor

t sub

mitt

ed to

the

RM

I Min

istr

y of

Tra

nspo

rtat

ion

and

Com

mun

icat

ions

, pre

pare

d by

WD

Sco

ttIn

tern

atio

nal D

evel

opm

ent C

onsu

ltant

s Pt

y Li

mite

d. D

ecem

ber.


TTTT T abl

e A3

.4.

able

A3

.4.

able

A3

.4.

able

A3

.4.

able

A3

.4.

Fina

ncia

l Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FFi

nanc

ial

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Fina

ncia

l Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FFi

nanc

ial

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Fina

ncia

l Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

es

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Siz

e of

FS

ize

of F

Siz

e of

FS

ize

of F

Siz

e of

Fue

lue

lue

lue

lue

lW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

FW

ho s

ets

F ueluel

uel

uel

uel

Esti

mat

edEs

tim

ated

Esti

mat

edEs

tim

ated

Esti

mat

edD

epos

itD

epos

itD

epos

itD

epos

itD

epos

itA

udit

ing

Aud

itin

gA

udit

ing

Aud

itin

gA

udit

ing

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Rem

arks

/Upd

ates

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Levy

/Cha

rges

Annu

al R

even

ueAn

nual

Rev

enue

Annu

al R

even

ueAn

nual

Rev

enue

Annu

al R

even

ueM

echa

nism

Mec

hani

smM

echa

nism

Mec

hani

smM

echa

nism

Req

uire

men

tR

equi

rem

ent

Req

uire

men

tR

equi

rem

ent

Req

uire

men

t

MO

F Th

e dr

aft

legi

slat

ion

requ

ires

the

MO

F to

con

sult

with

road

use

rs w

hen

revi

ewin

g th

e ra

tes

for t

he u

ser c

harg

es.

Reve

nues

col

lect

ed b

yPo

lice

Dep

artm

ent f

rom

road

dam

age

char

ge to

be

paid

mon

thly

to M

OF

onbe

half

of M

inis

try o

fJu

stic

e.Th

e Ch

ief,

Reve

nue

and

Taxa

tion,

on

beha

lf of

MO

F, to

tran

sfer

all

reve

nues

col

lect

ed fr

omth

e ro

ad u

se c

harg

e to

the

RTF

on a

mon

thly

bas

is.

The

char

ges

set/f

ixed

by M

OF

are

base

don

the

requ

irem

ents

set

out

in th

eLo

ng-t

erm

Mai

nten

ance

Pro

ject

ion

(Pla

n/Pr

ogra

m)

prep

ared

by

MRD

ove

rth

e ne

xt 2

0 ye

ars.

Pro

ject

ions

are

revi

sed

ever

y 4

year

s. M

RD is

requ

ired

to s

ubm

it an

ann

ual r

oad

mai

nten

ance

plan

to M

OF,

pre

pare

d in

prio

rco

nsul

tatio

n w

ith m

ajor

road

use

rs. T

hean

nual

pla

n is

the

basi

s fo

r ann

ual

draw

dow

ns fr

om th

e RT

F.

Mar

shal

lIs

land

sRo

ad d

amag

e ch

arge

by

vehi

cle

type

and

wei

ght,

refle

ctin

g pa

vem

ent w

ear

whe

n a

t man

ufac

ture

r’sm

axim

um p

erm

itted

wei

ght.R

oad

Use

Char

ge:g

asol

ine

US$0

.10

per g

al.,

dies

el U

S$0.

0pe

r gal

.

The

cons

ulta

nts

estim

ated

an a

nnua

l rev

enue

of

US$2

71,5

00 (1

998

pric

es)

base

d on

a fl

atin

crea

se in

ann

ual v

ehic

lere

gist

ratio

n fe

e, ro

ad u

sech

arge

of U

S$0.

10 p

erga

l. of

gas

olin

e, a

nd a

road

dam

age

char

ge.

Inde

pend

ent a

udit

cond

ucte

d an

nual

ly

Sou

rce:

Sam

e as

Tab

le A

3C.3

.

3.La

tin A

mer

ica

TTTT T abl

e A3

.5.

able

A3

.5.

able

A3

.5.

able

A3

.5.

able

A3

.5.

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

es

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Sou

rces

of

Rev

enue

s an

dS

ourc

es o

f R

even

ues

and

Sou

rces

of

Rev

enue

s an

dS

ourc

es o

f R

even

ues

and

Sou

rces

of

Rev

enue

s an

dFFFF F e

atur

es o

f R

oad

Boa

rdea

ture

s of

Roa

d B

oard

eatu

res

of R

oad

Boa

rdea

ture

s of

Roa

d B

oard

eatu

res

of R

oad

Boa

rdIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esFFFF F e

atur

es f

or R

oad

Fea

ture

s fo

r R

oad

Fea

ture

s fo

r R

oad

Fea

ture

s fo

r R

oad

Fea

ture

s fo

r R

oad

F undund

und

und

und

The

RMF

is g

over

ned

by g

over

nmen

t rul

esco

ncer

ning

wag

es a

nd le

tting

of c

ontra

cts,

whi

ch m

ight

hav

e ne

gativ

e ef

fect

s on

its

effic

ienc

y.

Cost

a Ri

caLe

gisl

atio

n es

tabl

ishi

ng a

road

mai

nten

ance

fund

(RM

F) p

asse

dm

id-1

998

Mai

nly

fund

ed b

y a

fuel

levy

The

RMF

is u

tilize

dfo

r mai

nten

ance

, reh

abili

tatio

n, a

nd im

prov

e-m

ent o

f the

nat

iona

l roa

d ne

twor

k. P

riorit

y is

give

n to

rout

ine

and

perio

dic

mai

nten

ance

.All

wor

ks a

nd s

ervi

ces

are

cont

ract

ed o

ut to

the

priv

ate

sect

or.

The

boar

d is

com

pose

d of

7 m

embe

rs: 3

mem

bers

from

the

cent

ral G

over

nmen

t (al

lfro

m th

e M

inis

try o

f Pub

lic W

orks

and

Tran

spor

t), 1

mem

ber r

epre

sent

ing

mun

ici-

palit

ies,

and

3 m

embe

rs fr

om th

e pr

ivat

ese

ctor

. Th

e pr

ivat

e se

ctor

repr

esen

tativ

es a

reno

min

ated

by

thei

r res

pect

ive

orga

niza

tions

.

The

orig

inal

inte

ntio

n of

the

Min

istry

of

Tran

spor

t was

to c

reat

e an

aut

onom

ous

RMF.

How

ever

, the

legi

slat

ion

did

not s

ecur

e th

ere

quire

d tw

o-th

irds

maj

ority

vot

e of

Parli

amen

t, so

the

idea

was

no

long

erpu

rsue

d by

the

Gov

ernm

ent.

Gua

tem

ala

Legi

slat

ion

was

pas

sed

in 1

996

incr

easi

ng th

e ta

xes

on m

otor

fuel

and

ded

icat

ing

this

incr

ease

, plu

s pa

rt of

the

exis

ting

fuel

taxe

s, to

a s

peci

alfu

nd e

xclu

sive

ly fo

r roa

dm

aint

enan

ce.

(Incr

ease

d) ta

xes

on m

otor

fuel

and

par

t of

exis

ting

fuel

taxe

s, fu

el le

vy, v

ehic

le fe

es, t

olls

,m

isce

llane

ous

Fund

s ut

ilize

d fo

r mai

nten

ance

of n

atio

nal r

oads

only.

All w

orks

and

ser

vice

s ar

e co

ntra

cted

out

to th

epr

ivat

e se

ctor

.Ad

min

istra

tive

cost

of t

he ro

ad fu

nd is

lim

ited

to2%

of i

ts a

nnua

l tur

nove

r.

Dec

ree

crea

ting

the

boar

d w

as m

ade

in e

arly

1997

and

man

date

s 6

repr

esen

tativ

es,

3m

embe

rs e

ach

from

the

Gov

ernm

ent a

nd th

epr

ivat

e se

ctor

.


TTTT T abl

e A3

.5.

able

A3

.5.

able

A3

.5.

able

A3

.5.

able

A3

.5.

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

es

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Sou

rces

of

Rev

enue

s an

dS

ourc

es o

f R

even

ues

and

Sou

rces

of

Rev

enue

s an

dS

ourc

es o

f R

even

ues

and

Sou

rces

of

Rev

enue

s an

dFFFF F e

atur

es o

f R

oad

Boa

rdea

ture

s of

Roa

d B

oard

eatu

res

of R

oad

Boa

rdea

ture

s of

Roa

d B

oard

eatu

res

of R

oad

Boa

rdIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esFFFF F e

atur

es f

or R

oad

Fea

ture

s fo

r R

oad

Fea

ture

s fo

r R

oad

Fea

ture

s fo

r R

oad

Fea

ture

s fo

r R

oad

F undund

und

und

und

The

spec

ific

prov

isio

n of

the

law

stip

ulat

ing

that

the

proc

eeds

from

taxe

s re

late

d to

road

trans

port,

suc

h as

fuel

taxe

s, im

port

dutie

son

mot

or v

ehic

les,

lice

nsin

g fe

es, e

tc.,

form

part

of th

e in

com

e of

the

RMF

was

am

ende

dby

the

new

gov

ernm

ent.

As

revi

sed,

asp

ecifi

c po

rtion

of t

he fu

el ta

x w

ould

be

dedi

cate

d to

the

RMF.

(The

abo

ve-c

ited

reve

nues

wou

ld p

rovi

de tw

ice

the

amou

nt o

ffu

nds

need

ed fo

r roa

d m

aint

enan

ce.)

Hon

dura

sLe

gisl

atio

n cr

eatin

g a

road

mai

nten

ance

fund

(RM

F) w

aspa

ssed

in 1

993.

Prin

cipa

l sou

rce

is a

levy

on

fuel

in th

e fo

rm o

f ade

dica

ted

tax.

Up

to 1

0% o

f fun

ds c

an b

eut

ilize

d fo

r reh

abili

tatio

n w

orks

. All

wor

ks a

s w

ell

as s

ervi

ces

cont

ract

ed o

ut to

the

priv

ate

sect

or.A

dmin

istra

tive

cost

of t

he R

MF

isre

stric

ted

to 2

.5%

of t

he a

nnua

l bud

get.

An 8

-mem

ber b

oard

has

exe

cutiv

e fu

nctio

nsan

d su

perv

ises

the

fund

(4

repr

esen

tativ

esfro

m c

entra

l gov

ernm

ent,

1 fro

m th

eAs

soci

atio

n of

Mun

icip

aliti

es, a

nd 3

from

the

dire

ct a

nd in

dire

ct ro

ad u

sers

).Th

e M

inis

ter o

f Tra

nspo

rt an

d Pu

blic

Wor

ks(M

TPW

) is

the

boar

d ch

airm

an a

nd a

ppoi

nts

the

mem

bers

of t

he p

rivat

e se

ctor

upo

nno

min

atio

n by

the

orga

niza

tion

they

repr

esen

t.The

boa

rd is

resp

onsi

ble

for t

hero

utin

e an

d pe

riodi

c m

aint

enan

ce o

f the

offic

ial r

oad

netw

ork,

exc

ludi

ng u

rban

and

mun

icip

al ro

ads.

Exe

cutio

n an

d su

perv

isio

n of

road

mai

nten

ance

is c

ontra

cted

out

by

the

Boar

d to

the

priv

ate

sect

or, w

hile

pla

nnin

g is

bein

g do

ne b

y M

TPW

.

Braz

il is

stil

l far

from

reac

hing

a c

onse

nsus

on c

reat

ing

a ro

ad m

aint

enan

ce fu

nd.

How

ever

, the

urg

ency

to re

form

the

exis

ting

inef

ficie

nt a

nd in

effe

ctiv

e sy

stem

of r

oad

mai

nten

ance

is b

eing

felt,

so

ther

e is

pres

sure

to u

nder

take

maj

or re

form

s to

finan

ce a

nd m

anag

e ro

ad m

aint

enan

ce.

Braz

il

Cou

ntrie

s w

ith R

oad

FC

ount

ries

with

Roa

d F

Cou

ntrie

s w

ith R

oad

FC

ount

ries

with

Roa

d F

Cou

ntrie

s w

ith R

oad

F und

s in

Ini

tial

Sta

ges

of P

repa

ratio

nun

ds i

n In

itial

Sta

ges

of P

repa

ratio

nun

ds i

n In

itial

Sta

ges

of P

repa

ratio

nun

ds i

n In

itial

Sta

ges

of P

repa

ratio

nun

ds i

n In

itial

Sta

ges

of P

repa

ratio

n

Initi

al p

rogr

ess

tow

ard

esta

blis

hing

an

RMF

has

suffe

red

maj

or s

etba

cks

due

to th

ech

ange

in g

over

nmen

t.

Colo

mbi

a

Ecua

dor i

s st

ill fa

r fro

m re

achi

ng a

con

sens

uson

cre

atin

g a

road

mai

nten

ance

fund

.H

owev

er, t

he u

rgen

cy to

refo

rm th

e ex

istin

gin

effic

ient

and

inef

fect

ive

syst

em o

f roa

dm

aint

enan

ce is

bei

ng fe

lt, s

o th

ere

ispr

essu

re to

und

erta

ke m

ajor

refo

rms

tofin

ance

and

man

age

road

mai

nten

ance

.

Ecua

dor


TTTT T abl

e A3

.5.

able

A3

.5.

able

A3

.5.

able

A3

.5.

able

A3

.5.

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

FLe

gal

and

Adm

inis

trat

ive

Arra

ngem

ents

for

Roa

d M

aint

enan

ce F

Lega

l an

d Ad

min

istr

ativ

e Ar

rang

emen

ts f

or R

oad

Mai

nten

ance

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

unds

and

Fun

ds a

nd F

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

esun

d In

itiat

ives

und

Initi

ativ

es

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Cou

ntry

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Lega

l B

asis

Sou

rces

of

Rev

enue

s an

dS

ourc

es o

f R

even

ues

and

Sou

rces

of

Rev

enue

s an

dS

ourc

es o

f R

even

ues

and

Sou

rces

of

Rev

enue

s an

dFe

atur

es o

f R

oad

Boa

rdFe

atur

es o

f R

oad

Boa

rdFe

atur

es o

f R

oad

Boa

rdFe

atur

es o

f R

oad

Boa

rdFe

atur

es o

f R

oad

Boa

rdIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esIs

sues

/Pro

blem

s/U

pdat

esFe

atur

es f

or R

oad

Fund

Feat

ures

for

Roa

d Fu

ndFe

atur

es f

or R

oad

Fund

Feat

ures

for

Roa

d Fu

ndFe

atur

es f

or R

oad

Fund

The

Gov

ernm

ent

has

take

n on

an

exte

nsiv

e pu

blic

aw

aren

ess

cam

paig

n. I

tha

s de

cide

d no

t to

inc

reas

e fu

el p

rices

at

the

initi

al s

tage

of

the

RMF.

Par

t of

the

exis

ting

fuel

tax

es w

ill b

e al

loca

ted

to a

dedi

cate

d fu

el l

evy.

Nic

arag

uaTh

e G

over

nmen

t ha

ssu

bmitt

ed d

raft

legi

slat

ion

crea

ting

the

road

mai

nten

ance

fund

(RM

F) t

o Pa

rliam

ent.

Mai

n so

urce

wou

ld b

e a

fuel

lev

y, t

o be

incr

ease

d gr

adua

lly.

10%

of t

he R

MF’

s an

nual

bud

get i

s in

tend

ed fo

rre

habi

litat

ion

wor

ks.

Even

tual

ly, th

e RM

F w

ould

be

used

for t

heen

tire

road

net

wor

k, in

clud

ing

urba

n an

dm

unic

ipal

road

s.Al

l wor

ks a

nd s

ervi

ces

mus

t be

cont

ract

ed o

utto

the

priv

ate

sect

or. A

cap

on

adm

inis

trativ

eco

st is

set

at 5

% o

f its

ann

ual b

udge

t.Int

erna

lau

dit w

ill b

e un

derta

ken,

toge

ther

with

an

annu

al a

udit

to b

e do

ne b

y an

inde

pend

ent

audi

tor

A 6-

mem

ber

Boar

d w

ill o

vers

ee t

he R

MF,

with

priv

ate

sect

or h

avin

g 3

mem

bers

(rep

rese

ntin

g di

rect

and

ind

irect

roa

dus

ers)

, 2

from

gov

ernm

ent,

and

1 fro

mlo

cal

gove

rnm

ents

.

Not

es:

Bas

ed o

n D

r. Zi

etlo

w’s

pap

er p

rese

nted

dur

ing

the

XXIst

Wor

ld R

oad

Con

gres

s in

Oct

ober

199

9, it

wou

ld b

e to

o ea

rly t

o as

sess

the

per

form

ance

of t

he r

oad

mai

nten

ance

fund

s (R

MFs

) in

Lat

in A

mer

ica.

Non

ethe

less

,th

ere

are

seve

ral l

esso

ns th

at c

an b

e le

arne

d fro

m th

e pr

oces

s of

est

ablis

hing

thes

e fu

nds

in th

e re

gion

.

•Ac

hiev

ing

a br

oad

cons

ensu

s am

ong

all s

take

hold

ers

is a

n es

sent

ial p

rere

quis

ite fo

r cre

atin

g an

RM

F. T

his

coul

d be

ach

ieve

d by

: (i)

crea

ting

a fo

rum

for d

iscu

ssio

n (s

emin

ars)

with

the

stak

ehol

ders

, gov

ernm

ent,

pol

itica

lpa

rtie

s, a

ssoc

iatio

ns/o

rgan

izat

ions

repr

esen

ting

dire

ct a

nd in

dire

ct ro

ad u

sers

; (ii)

dem

onst

ratin

g cl

early

the

econ

omic

con

sequ

ence

s of

poo

r roa

d m

aint

enan

ce to

all

part

ies

invo

lved

; (iii

) pr

esen

ting

a co

ncep

t tha

t will

refo

rm th

e fin

anci

ng a

nd m

anag

emen

t of r

oad

mai

nten

ance

on

a lo

ng-t

erm

bas

is; a

nd (

iv)

keep

ing

the

publ

ic in

form

ed th

roug

h a

med

ia c

ampa

ign,

prin

t, a

nd T

V.•

Cre

atin

g an

RM

F in

sm

alle

r cou

ntrie

s w

ith p

oor r

oad

cond

ition

s is

eas

ier a

nd fa

ster

than

in b

igge

r cou

ntrie

s w

ith b

ette

r roa

ds. C

ount

ries

in C

entr

al A

mer

ica

wer

e fa

irly

quic

k to

cre

ate

such

fund

s, w

hile

Bra

zil a

nd P

eru

are

face

d w

ith d

iffic

ultie

s in

com

ing

to a

gree

men

t.•

Tim

ing

of n

ew le

gisl

atio

n (i.

e., c

reat

ion

of a

n au

tono

mou

s fu

nd a

nd e

stab

lishm

ent o

f a fu

el le

vy)

is c

ruci

al, a

s go

vern

men

ts a

nd p

arlia

men

ts o

ften

are

relu

ctan

t to

act s

wift

ly w

hen

elec

tions

are

com

ing

up. I

t wou

ld b

est

rate

gic

to p

ass

the

new

law

s du

ring

the

early

day

s of

a n

ew a

dmin

istr

atio

n, w

hile

hav

ing

achi

eved

a b

road

con

sens

us a

mon

g m

ajor

sta

keho

lder

s du

ring

the

prec

edin

g pe

riod.

(H

owev

er, t

here

are

als

o ris

ks to

be

cons

ider

ed, s

uch

as n

ew g

over

nmen

ts’ p

olic

ies

and

thru

sts

(con

tinui

ty),

and

cha

mpi

ons,

esp

ecia

lly w

ithin

gov

ernm

ent.

)•

Incr

easi

ng fu

el p

rices

thro

ugh

a fu

el le

vy h

as to

be

done

gra

dual

ly in

vie

w o

f its

pol

itica

l sen

sitiv

ities

and

in li

ne w

ith th

e pr

ojec

ted

savi

ngs

in v

ehic

le o

pera

ting

cost

s fro

m im

prov

emen

ts in

road

con

ditio

ns, t

o av

ert

infla

tiona

ry e

ffect

s. T

o ea

se th

e bu

rden

on

road

use

rs, i

t is

sugg

este

d th

at in

the

begi

nnin

g, a

por

tion

of th

e ex

istin

g fu

el ta

xes

be tr

ansf

orm

ed in

to a

fuel

levy

for m

aint

enan

ce, a

s in

Gua

tem

ala.

Sus

tain

abili

ty o

f an

RM

F de

pend

s no

t onl

y on

the

prin

cipl

es, b

ut a

lso

on th

e en

viro

nmen

t in

whi

ch it

ope

rate

s. T

he p

oliti

cal,

econ

omic

, and

soc

ial s

tabi

lity

of a

cou

ntry

, as

wel

l as

a w

ell-e

stab

lishe

d cu

lture

of c

itize

npa

rtic

ipat

ion

in p

ublic

and

com

mun

al a

ffairs

, are

dee

med

ess

entia

l for

long

-ter

m s

urvi

val o

f RM

Fs.


1. IntroductionThe Transport and Communications Division West

(IWTC) of the Asian Development Bank (ADB) orga-nized a 2-day regional workshop from 6 to 7 March 2001at the ADB Headquarters in Manila, Philippines. Thisappendix summarizes the workshop proceedings. Addi-tional details are included, in four annexes.

2. Purpose and Objectives of theWorkshop

The main purpose of the workshop was to solicit,exchange, and generate views and ideas on the findingsand recommendations of a draft working paper, preparedunder a regional technical assistance (RETA), RoadFunds Strategy (RETA 5871), on how best to providesustainable funding for road maintenance.

Specifically, the objectives of the forum were to:• Present the different views of the stakeholders, ADB,

and other funding agencies on how to address thecontinuing road maintenance issues and providefor a sustainable road maintenance funding;

• Learn from neighboring Asian countries, includ-ing those from Africa and Latin America basedon the World Bank’s and German Agency forTechnical Cooperation’s18 (GTZ) experiences,respectively;

• Present the framework for the Road Mainte-nance Fund and its applicability to developingmember countries (DMCs); and

• Identify probable solutions and joint efforts forsustainable road maintenance.

Annex A, Workshop Program, is found at page 75.

3. AttendanceA total of 88 delegates attended the workshop

representing the government sector, major funding agen-cies, and private sector/consultants. The workshop wasspecifically targeted to have the participation of twocritical government stakeholders in the road sector,namely, the ministries of finance and transport/commu-nications, or road agencies. Twenty DMCs of the ADBwere represented and almost half of the participants werefrom the ministries of transport/communications and roadagencies.

There was a high level of representation from theseministries as secretaries and deputy ministers orundersecretaries attended the workshop. Having theseofficials in the workshop was useful because of their rolein decision-making processes. Officials involved in ac-tual operations and day-to-day management of road net-works were also present.

Resource persons were from ADB’s partner institu-tions, namely, the World Bank, GTZ and United NationsEconomic and Social Commission for Asia and thePacific (UNESCAP). Major donor “development len-ding” agencies active in the road sector were also repre-sented, namely, Department for InternationalDevelopment (DFID) (United Kingdom), InternationalLabor Organization, Japan Bank for InternationalCooperation, and Swedish International DevelopmentAgency. Consultants working on ADB-funded projectsand the private sector also participated. The completelist is found in Annex B, page 77.

Appendix 4. Summary Reportof the Regional Workshop

18 In full, GTZ is the Deutsche Gesellschaft für Technische Zusammenarbeit GmbH.


4. Overview of the Workshopa. Process and Important Points

Raised

The workshop was structured to provide informationon actual experiences regarding the establishment ofroad funds worldwide. Interaction among and betweenparticipants was built into the workshop throughpreassignment into specific work groups of at least sixmembers each. (See Annex C, page 85, Groupings forthe Work Sessions.) There were four workshop sessionsconducted, the first three having the same membership,while the last workshop grouping was designed to clusterfinance officials into groups and roads people intoanother group. Funding agencies and consultants werealso grouped separately for the last workshop session.After each session, group representatives reported to theplenary and questions were then entertained during theopen forum/discussion.

Mr. Myoung-Ho Shin, Vice-President for RegionWest, ADB, gave the welcome address. In his address,Mr. Shin noted that the subtitle of the workshop, “Sol-ving the Maintenance Neglect,” was the main challengefor all the participants to address. He explained that ADBused these words deliberately because poor road mainte-nance has been a thorny and frustrating problem causedby lack of funds, which also meant lack of quality person-nel, equipment, materials, and facilities. Poor mainte-nance further leads to capital investments being lost inmain roads amounting to about $43 billion in the 1980s,as shown by a World Bank study of 85 developing coun-tries. With poor roads, vehicle operating costs, borne byroad users, increase by about $2-3 per vehicle-kilometerannually. Citing India as an example, Vice-President Shinsaid that with better road maintenance, vehicle operatingcosts could be reduced by $4 billion a year.

In response to these problems, ADB provided fundsfor a RETA to investigate effective mechanisms and ideasto address the maintenance problem such as transfor-ming road agencies into commercial entities by estab-lishing a road maintenance fund (RMF). During theprocess of coming up with the mechanism for an RMF,Vice-President Shin emphasized the importance of therole and responsibilities of the local governments andprivate sector. He also cited the need for the RMF toattain ADB’s fundamental goal of poverty reduction andto adhere to the principles of better access to basic ser-vices for the poor and a greater or equal voice for them indecision making. The RMF should also have a road

board based on the principle of governance—account-ability, predictability, and transparency as important in-gredients.

Vice-President Shin affirmed ADB’s commitmentto work with its DMCs, partner institutions, and theprivate sector to overcome the culture of neglect ofmaintenance.

Following the welcome remarks was a presentationby Mr. Marcelo Minc, ADB, of an overview of the roadmaintenance scene—its importance to the economy andsociety, the costs of building roads not only to the roadagency, but also to the road users as well. In the objectiveanalysis of the costs, using data from Papua New Guinea,it was shown that road user costs were much higher thanroad agency costs. Achieving a small percentage reduc-tion in the user costs would result in more savings to theeconomy. But to realize these savings requires that go-vernments spend four times as much on maintenance.The reality, however, was that maintenance budgets wereless than a third of what was needed.

Mr. Minc then enumerated the reasons why mainte-nance struggles for money: capital bias (to build newroads), equity and fairness (resealing a village access roadseems unfair when other villages still have no roads), poorroads not being the road agency’s main concern, prob-lems of the national budget process (giving more moneyfor roads means less for health, education, etc.) and theroad agency, may be asking for too much money.

While there have been past efforts to improve the situ-ation, these have produced few successes. Lending agen-cies have urged governments to earmark user charges butcountries have had difficulties keeping their commitments,with the countless demands on government general re-venues. Earmarking has not been favored by ministries offinance because they want control of all government re-venue collection. There is a fear that earmarking will resultin fiscal inflexibility, which the International MonetaryFund (IMF) opposes, along with the fear that earmarkedfunds give road agencies even more money “to waste.”

But there is room to change for the better. Given thatevery dollar “saved” on road maintenance costs $2–3 dol-lars to road users, road maintenance requirements maybe funded off-budget by making road users pay. In theend, the users will still be better off. The Ministryof Finance should be concerned about poor road condi-tion because its responsibilities include the efficientuse of money, and value-for-money, effective implemen-tation, and fighting corruption. Thus, the same Ministryshould create a system that provides the road mainte-nance that users need and which they are willing and pre-pared to pay for.

Appendix 4: Summary Report of the Regional Workshop on Funding for Road Maintenance 65

The present situation of road maintenance is not en-couraging. This was shown through pictures taken incountries where a once paved two-lane road has becomea very rough one-lane road and a paved two-lane roadthat has a sliver of seal remaining.

Picking up from what Mr. Minc presented, the firstwork session focused on getting the views of participantsregarding the assertion that “You should first preservewhat you have.” Discussions centered on questionsdirectly associated with each participant recognizing ifhis/her country has a problem of inadequate maintenanceand commenting on the problems of (i) money notspent efficiently, (ii) money not spent effectively,(iii) money allocated but not spent, and (iv) money notallocated. The detailed tabulation of all workshop ses-sions and group responses are presented in Annex D,Workshop Sessions, Results and Recommendations,found at page 91.

The afternoon session then provided the experiencesof three funding agencies active in the road sector andwhat could be imparted based on their experiences. Dr.William Paterson of World Bank presented the recentfindings of a World Bank assessment on selected roadfunds in Africa under its Road Maintenance Initiative(RMI) — Sub-Saharan Africa Transport Policy Program(SSATP). Under the RMI-SSATP, more than 16 coun-tries have established an RMF. The assessment, however,focused on six countries, namely, Benin, Ethiopia, Ghana,Kenya, Malawi, and Zambia, with relevant examples takenfrom other countries.

Dr. Paterson’s presentation was divided into threeparts: (i) Road Board structure — management focus,legal basis, and road user participation; (ii) process —adequacy and stability and performance monitoring; and(iii) objective achievements — road quality, resource al-location, operational efficiency, and capacity of local con-struction industry. He then proceeded to present theoutstanding issues.

In terms of the performance of the Road Board struc-ture, the overall reform process enjoyed widespread pub-lic support and activities were widely shared, includingtransparent allocations, publication of annual reports, andmedia coverage. With regard to the process, it was foundout that money was still insufficient to address full main-tenance needs. The road board was unable to match/ad-just road user charges with maintenance needs. Delayswere also experienced in transferring money due to theRMF. Specific to Zambia, only 30% of government con-tribution was channeled through the Road Board. Therewas a need to put in place auditing arrangements exceptfor Ghana. Strong pressure was felt to fund rehabilitation

of the primary and city network. For example, in Malawiand Zambia, more than 50% of the road fund resourceswere spent on rehabilitation of capital city roads in fiscalyear 1999.

Objectively, the achievements indicated that the shareof paved roads in good condition has increased for Ethio-pia, Ghana and Zambia, but the benefits have been con-fined to main and urban roads. The RMF has stabilizedroad financing, which helped reduce uncertainties in thebudgetary process. It also addressed the problem of lackof synchronization between the budget year and construc-tion season. By providing funding certainty, effective com-petitive bidding was undertaken that resulted to reducedunit costs for maintenance (particularly for Ghana). Theshare of force account in road maintenance works de-creased and it allowed the increase in the use of localcontractors.

The key lessons from the assessment were:(i) Road funds were necessary but not a sufficient

condition to ensure sustainable road mainte-nance;

(ii) Road funds have to increase in step with ab-sorptive capacity to deal with maintenanceneeds;

(iii) There is a need to work harder on non-primaryroads;

(iv) There is a need to strengthen capacity of roadagencies and private contractors in parallel withstabilizing road funds;

(v) The flow of fuel levy revenues to the road fundmust be efficient and transparent with a pre-mium on reducing the number of intermediatesteps;

(vi) There is a need for built-in mechanisms whichare necessary to adjust fuel levy regularly (asinflation erodes the real value); and

(vii) There is a need for continuous independentperformance monitoring for both financial andtechnical aspects.

Based on these lessons, the following outstandingissues need to be addressed:

(i) What is the optimum staff size of the board andits compositions?

(ii) What are the sufficient conditions for sustain-able reforms in road management and finan-cing?

(iii) How to define “maintenance” and what shouldbe the road fund mandate.

(iv) How best to relate road user charges to damagecaused in an economic sense.


(v) How to address maintenance needs of rural net-work given insufficient resources and greaterperceived needs of capital city and primary net-work.

(vi) How to protect the real value of fuel levy.(vii) How to protect nonusers of road from fuel levy.(viii) What is the time frame to use for evaluating

performance and amending initial design?Dr. Gerhard Metschies of GTZ gave an account of

GTZ’s experience on “Introducing Road Funds in LatinAmerica.” He provided nine summary points.

(i) Roads in Latin America are deteriorating andtheir replacement cost is valued at $350 bil-lion;

(ii) Road funds are important means but are only apart of the general issue of reestablishing finan-cial discipline in the country. With an unstablefinancial sector in Latin America, the estab-lishment of an RFM has to go hand-in-handwith the financial stabilization of the state;

(iii) Given the presence of interest groups and ob-jectives of international banks, the roads sectormust be formed into an economic growth-ori-ented sector. This requires professional assetmanagement;

(iv) The first priority should be given to mainte-nance, which gives the highest economic yield;

(v) Revenues from the fuel levy have to be adequateand earmarked for maintenance;

(vi) The lessons learned in introducing RMFs inLatin America are:

(a) The road fund initiative has to be spear-headed by a high-ranking government offi-cial, preferably the prime minister, ministerof finance, or the transport committee of theparliament and not only the minister ofworks;

(b) Establishing the fund as part of the generalstabilization strategy of public finances, ithas to be approved by the ministry of fi-nance; otherwise, it is bound to fail;

(c) The political pressure has to be harmonizedwith a well-planned public relations cam-paign to win public support;

(d) The formation and support of road userlobby groups (transport-driver unions) maybe decisive for the acceptance of financialburdens for new transport, vehicle, and roadfees; and

(e) The road maintenance charges can only beraised gradually in line with road network

improvements. Charges should be intro-duced constantly, step-by-step, and reflec-tive of the world market prices.

(vii) There is a vehicle taxation strategy in manySouth American countries that is nonexistentin the United States (US) and in many othercountries;

(viii) Latin American countries often follow the USin terms of economic policies and programs,and this includes the example set by the US roadfund. The US road fund comes from earmarkedfuel taxes. The Federal Road Fund provides foran internal cross-subsidization from richer topoorer states, e.g., California to Alaska. It al-lows funding for road safety measures, masstransit, and research. Hence, the US experienceis of major importance for the political and eco-nomic changes in the Latin American region;and

(ix) Highway Development Management System(HDM4) may be considered the best modelbut a precondition would be the use of a roadand bridge data bank. Careful asset manage-ment of road investments is another precondi-tion and this is a crucial first step to reducingthe total transport costs.

The Asian and Pacific initiatives to improve roadmaintenance financing were presented by DieterNiemann of the UNESCAP, which has been the WorldBank’s and ADB’s partner in organizing road fund semi-nars and workshops.

Mr. Niemann explained the current situation in Asiaand noted those countries had undertaken country-levelworkshops. Since 1997 until 2000, 10 countries have con-ducted these workshops, namely: Pakistan (April 1997),Philippines (May 1997), Lao People’s Democratic Re-public (Lao PDR) (February 1998), India (May 1998),Nepal (May 1998), Bangladesh (November 1998),People’s Republic of China (December 1998), Sri Lanka(June 1999), Papua New Guinea (February 2000, jointlywith ADB), and Viet Nam (May 2000). Results of theworkshops indicated that all these countries, except SriLanka, opted for a road fund to be financed mainly byroad user charges. All countries have voted for an over-sight body/board comprising all stakeholders, particu-larly the road users. The majority of these countries alsoopted for a majority private sector board to ensure effi-ciency through commercial management.

From the Asian experience, it was learned that eachcountry has to develop its own policy and institutionalapproach to road sector reform. Setting up an RMF is a


formidable challenge and a time-consuming process. Tomeet the challenge and go through the process, four im-portant objectives have to be reached:

(i) A realistic action plan has to be prepared tokeep things on track;

(ii) Detailed studies have to be made to defineimplementation strategy. Procedures and mo-dalities are important to be defined;

(iii) Study tours must be undertaken to other coun-tries to learn from their practical experience withsetting up a road fund and to view day-to-dayoperations of an active road fund; and

(iv) Continuing donor follow-up and support is im-perative.

Conclusions from the Asian initiatives point to twomain factors: (i) that the key element is the activeinvolvement of all stakeholders, the different public sec-tor agencies, in particular, the finance ministry as well asthe different road user/private sector groups; and (ii) thatstrong political commitment and determination forreform is crucial.

Mr. Niemann noted that Asia was different from otherregions because it started much later in recognizing theneed to seriously address road maintenance for the manynew roads built during the rapid economic growth of thelast two decades. Furthermore, the initiatives in LatinAmerica and Africa were coordinated through regionalprograms of interventions supported by a number of do-nors and other actors. In Asia, however, these initiativeswere either single-lender activities in individual countriesor as joint World Bank/UNESCAP programs and wereoften confined to awareness creation, experience exchange,and providing a forum to discuss available options.

Yet, he was optimistic that there was hope for Asiaand he noted that the RETA 5871 workshop might be astarting point for a coordinated multi-funding agencyprogram. While good progress has been achieved in anumber of countries and in the region, further fundingagency support to complete the process and implementthe reform is required. However, Mr. Niemann notedthat to bring forward reforms for sustainable road main-tenance in Asia, a “success story within the region” wasurgently needed.

The main topics discussed during work session 2centered on the applicability of other countries’ experi-ences on road maintenance and funding, considering dif-ferences in policy environments, culture and institutionalcapabilities, among others. (Refer to Annex D, page 93for details.)

Day 2 of the workshop had the theme “The WayAhead” to tackle matters regarding the framework of road

maintenance funds, stakeholder participation, and self-reliance in the process of change.

Dr. K.E. Seetharam of ADB’s Operations EvaluationOffice provided a briefing on its findings and recom-mendations regarding problems associated with roadprojects and solutions to address these, specifically onmaintenance and safety. A total of $11.2 billion worth ofinvestments for 151 road projects were funded by ADB.Additionally, $5.16 million in technical assistance has beenextended for road safety measures. In year 2000 alone,the road sector accounted for 13% of the total loan port-folio.

The solutions to road maintenance and safety prob-lems, according to Dr. Seetharam, could be seen oncethese problems were viewed together from a higher level.Using the GOODS principle, new solutions to the prob-lems could be seen. The first is to Build GGGGGenerously. Les-sons from externally funded road projects show thatdesigns with high investment costs warrant lesser (rou-tine) maintenance. Second, Maintain and OOOOOperate withOOOOOwnership, which means that sustainability is directlyrelated to maintenance. And to achieve this, ownership isa prerequisite, including community-oriented initiatives,user fees as maintenance funds, no delays and no com-promises, and budget for routine maintenance. The lastsolution is to DDDDDeliver goods and people SSSSSafely. Safety is thebenefit that accrues to all road users.

In the design of road investment projects, reflectingwell on the following would help out in finding solutions:

(i) IRRs and least-cost analysis can be misleading.Road projects always achieve greater than 12%EIRRs but they can perform better; and

(ii) “Maintenance” is taken for granted at appraisalstage. Even in sensitivity analyses, maintenanceis not quantified.

Dr. Seetharam informed the group that ADB couldprovide grant assistance for capacity building; informa-tion, education, and communication campaigns; andcommunity initiatives to improve safety and maintenance,which in turn, contribute directly to poverty reduction.Providing grant funds also frees up scarce governmentresources for other poverty-related activities.

Four Asian countries, namely, Lao PDR, Nepal,Pakistan, and Philippines, gave an account of their expe-riences on setting up an RMF and the status of thesefunds. From Lao PDR, Mr. Sisomphanh Phinsipasom,Deputy Director of the Road Administration Division,Department of Roads, made the presentation. Heprovided the background of Lao PDR’s road transportsystem, its road strategy, maintenance performanceindicators, and road conditions. In early 1998, the


Government initiated a dialogue with funding agencieson setting up a road fund. Several activities followed in-cluding funding agency missions, study tours, policy work-shops, and intergovernmental meetings. On 12 October2000, the Prime Minister signed Decree No. 146/PMestablishing a Public Road Maintenance Fund, which waslater replaced with Decree No. 09/PM, signed on 15January 2001, setting up a “Road Maintenance Fund.”Another decree was signed on the same day for the estab-lishment of the Road Advisory Board. The main sourceof revenues will be a fuel levy and a heavy vehicle sur-charge. The revenues will then be deposited in anindependent account in the Bank of Lao PDR and sub-ject to annual audit. As of 16 March 2001, a consultantwas hired to assist the Ministry of Communications,Transport, Post and Construction to establish theoperation procedures for the road fund, draft operationalregulations, and assist the secretariat. It is expectedthat the fund will be operational within the current finan-cial year.

Director-General A.P. Khanal, of the Departmentof Roads, explained the Nepalese Government’s approachto the problem on funding road maintenance. Toll chargeshave been instituted in the country to be used to supportroutine, recurrent and emergency maintenance activitieson specific road sections. Based on the encouragingresults of having toll revenues, the Parliament approved adedicated road fund mechanism in December 1995 andit became a statute as an enabling Bill in February 1996.The Bill allows for the creation of an RMF to beadministered by a steering committee. Revenues fromtoll roads and other sources would accrue to the fund. InNovember 1997, a central toll road account was formallyestablished.

As a result of the Road Management and Financeworkshop in May 1998, a road management and financereform implementation committee was set up to preparea proposal for sustainable funding and improved man-agement of road maintenance, together with the neces-sary legal and regulatory framework. The committeedrafted the “Road Board Act,” which was modeled ac-cording to other countries’ experiences. Basically, thedraft Act proposes to create a road board and a secretariatto manage the RMF, which will be funded from road usercharges for routine, recurrent, emergency, and periodicmaintenance on all public roads. The draft Act was pre-sented to the Parliament on 24 January 2000 for approval.To date, the draft Act is still being discussed.

Mr. Syed Najmul Hasan of the National HighwayAuthority (NHA) shared Pakistan’s experience. Similarto other countries, Pakistan’s problems have resulted from

excessive loading of heavy vehicles and high traffic vol-umes. Road pavements do not have the carrying capacityto cope with present usage due to poor pavement struc-tures constructed in the 1970s. The pavements were de-signed to carry traffic volume between 2,000 and 4,000vehicles per day. Inadequate funding for maintenance fur-ther aggravates the situation; maintenance allocation givenis usually 25% of the total requirements.

In the April 1997 country-level workshop, the mainrecommendation was to create a Road Fund and Man-agement Board. Two years after, the Government ap-proved a policy on the establishment of a road fund. TheCabinet Committee decided in January 2000 for the“road fund (to) be constituted with details to be finalizedby the Ministries of Finance and Communications.” Draftlegislation on Road Fund Administration Ordinance 2000was prepared by the NHA and commented upon by theWorld Bank. By June 2000, the Ministry of Finance no-tified the interim Road Fund Management Board. How-ever, the modalities of the road fund have yet to befinalized. At this time, the decision on the RMF is stillunder consideration by the Ministry.

The Philippine presentation focused on the progressof implementation of the Motor Vehicles User ChargesAct (RA 8794), which serves as the legal basis forthe creation of the dedicated Road Fund and the RoadBoard.

Director Linda Templo enumerated the backgroundwork and studies undertaken by the Government leadingto the Act. The first transport strategy study was donefrom 1996 to 1997 and at this time one of the recommen-dations was for the establishment of an RMF. This initia-tive was then followed by a workshop in 1997; a “BetterRoads Philippines Study” funded by the World Bank in1998–1999, and a simultaneous study on rationalizingroad user charges. Further, in the Government’s Me-dium-Term Philippine Development Plan for 1999–2004, one of the policy thrusts and programs of the roadsector was the road fund.

The Motor Vehicles User Charges Act was signedinto law on 27 June 2000 and its Implementing Rulesand Regulations became effective on 5 September 2000.The Act provides for the (i) imposition of user chargeson owners of all motor vehicles, including governmentvehicles; (ii) setting up a dedicated RMF; (iii) continuingbudgetary appropriation to the Department of PublicWorks and Highways (DPWH) for maintenance ofnational roads; (iv) establishment of a road board andsecretariat; (v) establishment of a road program office;and (vi) establishment of a Vehicle Pollution Control FundCommittee.


In terms of allocation of road fund revenues, thesewill be dedicated for the (i) maintenance and drainageimprovements on national roads (80%); (ii) maintenanceof local roads (5%); (iii) installation of traffic lights androad safety devices (7.5%); and (iv) air pollution control(7.5%).

The Government/public sector has the majority ofthe membership in the Road Board with four seats andwith the DPWH Secretary as the ex-officio head. Otherpublic sector members are from the Department of Fi-nance, Budget and Management and the Department ofTransportation and Communications. The private sectorhas three seats as members and they are representativesfrom transport and motorist organizations. Private sec-tor representatives have been appointed. So far, the Boardhas had four regular meetings since November of lastyear and regular meetings are scheduled every first Fri-day of the month. The Road Program Office has alreadystarted work on the annual work plans and preparation ofcriteria for project selection and fund allocation, organi-zation and staffing requirements, among other things.

In conclusion, Director Templo cited that the initialactivities of the Board and the Road Program Office showDPWH’s commitment to road reform. Further, she em-phasized the DPWH’s willingness to engage in discus-sions with stakeholders regarding strategies to ensuresuccessful transition and implementation of these reforms.

Dr. Ronald Allan, a consultant engaged under RETA5871 Road Funds Strategy, presented a suggested frame-work for a road maintenance fund. Citing the lessons fromtoll roads being properly maintained, attracting users dueto savings and taking account of users cost, the messagewas to reform road administration. Road administrationshould try to imitate toll roads and view its custody ofroads as providing a service to users. To do this, the roadagency should have (i) the analytical ability to take ac-count of road users’ costs, (ii) harness user involvement,and (iii) charge road users for the service they receive.

One approach to reform is to set up an RMF basedon (i) a “road tariff ” (road user charges), (ii) an indepen-dent board, and (iii) a small secretariat to serve the board,while keeping the road agency intact. The Fund shouldmeet the funding requirements for routine and periodicmaintenance; rehabilitation;19 minor road improvementsto be implemented during rehabilitation work; and ad-ministration costs, planning and programming activities,training, and research and development.

Revenue sources of the RMF would be road tariffsdirectly levied on road users as fees for access (time-re-

lated fee) and fee for usage (fuel tax). Dr. Allan men-tioned that tariffs should be set to meet expenditure re-quirements and not the other way around. Further, tariffsshould mirror maintenance costs for deterioration due totime and weather and pavement wear. Specifically, theseearmarked charges/road tariffs paid directly by roadusers should include:

(i) Levies on consumables, mainly fuel,20

(ii) Annual vehicle license fees,(iii) Supplementary heavy vehicle fines,(iv) Fines for overloading, and(v) International transit fees.Dr. Allan emphasized that earmarking should not

affect the consolidated revenue fund and the budget allo-cation for health and education, among others. The con-solidated revenue account would lose revenues due toearmarking but these are transferred to the RMF. Essen-tially, in the consolidated revenue fund, re-labeling ofsome taxes (i.e., petrol levy, diesel levy, and license fees)would be done. These levies are transferred to the RMF,and also include new charges. Introduction of newcharges would be based on the premise that the moneygoes to road maintenance and, thus, the road users wouldbe willing to pay these new charges. Mechanisms mustbe put in place to accommodate diesel fuel not used byroad vehicles, rather on electricity, railways, industries,boats, farms, etc. Possible solutions may include color-ing diesel fuel that would exclude payment of charges,exemptions, refunds, and compensations.

In the creation of an RMF, it would be useful to havea mission statement that may read as follows:

“The mission of the RMF is to promote road net-work maintenance to a standard users want and are will-ing to pay for, by collecting a road tariff and by allocatingfunds to road agencies that comply with RMF standardsfor sound planning and execution of works.”

The mission statement formulated by Dr. Allan im-plies that:

(i) There is strong user involvement;(ii) There is an existing customer-supplier relation-

ship with road agencies which indicates:(a) the RMF sets the rules; and(b) the road agency role remains focused on

planning and programming, contract pro-curement and supervision, ‘force account’work (if RMF permits) and financial andtechnical audits.

(iii) The road agency is accountable to the RMF;and

19 Rehabilitation is defined as overlays to be done every 15 years to restore smoothnessand durability.

20 In Latin America, fuel levies of 7–9 US cents per liter would maintain the whole roadnetwork.


(iv) The RMF is accountable to road users andtherefore should be transparent by undertakinginformation dissemination activities.

With regard to the establishment of the RMF Board,the members must be able to pursue the interests of roadusers. Hence, the private sector must have majority mem-bership (with the chairman coming from this group)21

chosen for their expertise and contribution. The publicsector, who may be appointed ex-officio, would be in theminority, with representatives chosen from the ministriesof finance and transport and local municipal and rurallocal governments. Road agencies are not included asthey supply the services to the RMF. A nine-member-ship board with a staggered three-year term may be thestandard.

The RMF must have a secretariat headed by a chiefoperating officer (CEO) appointed by the Board. TheCEO then appoints professional staff with expertise onadministration, economics, accounting, planning andengineering. Outsourcing of functions on revenue col-lection, monitoring and special projects may be done.

Setting up the RMF with legislation would be thebest arrangement. The Board would be given full legalpowers to enter into legal agreements, collect road tariffand open bank accounts for the revenues. Moreover, theBoard must have fiduciary duty as trustees of the rev-enues to protect the revenues against “raids” and ensurethe revenues are spent in users’ interests.

With the RMF, (i) money would be spent effi-ciently—the RMF sets rules for identifying and priori-tizing work; (ii) money is spent effectively—the RMFsets rules for carrying out maintenance work; (iii) moneyis disbursed in timely way—the RMF gets, and disbursesa steady revenue stream; and (iv) enough money is allo-cated—as RMF revenues match maintenance needs.

In implementing the reform, Dr. Allan explained thatit should be the finance ministry that should sponsor thereform. It is the primary government agency that is con-cerned about getting value for money in terms of the eco-nomic allocation of resources, effective program/projectimplementation and fighting corruption. Sponsorshipby the road agency would present a conflict of interestbecause the agency is the supplier to the RMF and theFund its customer.

The points enumerated by Dr. Allan were consid-ered to be “best practice.” In actuality, lending agencies

working with the road agency are pushing reforms.Strengthening road agencies usually take the form of be-ing provided with a pavement management system(PMS). The road agency therefore becomes the sponsorof reform, calling for more funding. With lack of com-mitment, reforms often progress slowly, then stall; orimplementation becomes selective and the RMF defec-tive. Most often, the PMS is eventually abandoned.

Dr. Allan concluded by stating that there is a betterway to achieve the reforms. First, the country must re-cognize its problems and take the initiative to investigatesolutions. Second, funding agencies/lenders should sup-port the initiative by promoting intellectual independence,offering “on demand” technical support, “strengthening”activities using locally sustainable technology. And, lastly,local solutions should be developed to match localabsorptive capacity.

He ended the presentation by showing pictures takenin Papua New Guinea depicting community action forroad maintenance. The sign shows the toll collection offive kina ($2) to pay for “maintenance” evidenced by apothole filled with soil.

Following the presentation of the RETA 5871 draftworking paper, the groups were again convened for worksession 3 to consider the applicability and feasibility ofthe RMF in their specific countries. The workshop ques-tions were based on the framework provided by Dr. Allanon the composition of the Board, the role of the Ministryof Finance, and sources of revenue for the RMF, amongother things.

Given the importance of road stakeholders’ partici-pation in the process of improving road management andfunding, including setting priorities and monitoring theeffectiveness of expenditures, a case study of Pakistan waspresented by Mr. Stephen Vincent,22 Road ManagementSpecialist.

Mr. Vincent recounted the activities leading to thecreation of the Association of Road Users of Pakistan(ARUP) from the conception of the idea, to its establish-ment and updates on recent initiatives. The country-levelroad fund workshop in 1997 provided the opportunityfor the contractors’ association and truckers’ representa-tives to request a seminar to discuss road sector problemsand potential areas for improvements. The seminar, spon-sored by the contractors’ association, was convened inspring of 1998, in Islamabad. This was followed by theNational Road Users Workshop in October of the sameyear, attended by transport sector representatives, con-21 The private sector members may be chosen from among road user organizations

representing the chambers of commerce, industrial and mining associations, agricul-tural groups, tourism industry, motorists associations, truck operators associations, busoperators associations, taxi associations, NGOs with special interests (poverty, environ-ment, etc.), scientific and academic institutions, and professional associations (engi-neers, lawyers, etc.).

22 Mr. Vincent has had actual experience in Pakistan and is presently involved with theRoad Information and Management System (RIMS) Project of the PhilippineGovernment’s Department of Public Works and Highways.


tractors and consultants, government, NGOs, inter-national agencies and representatives from all provincesof Pakistan. In this workshop, the decision to forman organization was made, together with the creationof an ad-hoc committee representing all regions andgroups.

A series of provincial workshops was then convenedin Lahore, Peshawar and Karachi in 1999. By the year2000, ARUP had conducted a road safety seminar andproduced a road safety brochure. Each regional office inSindh, Punjab and Islamabad concentrated on differentinitiatives, from road safety, commercial driver training,accident reporting, environment and control of pollutionemissions. Although the World Bank had originally hopedthat ARUP would take the debate on Road Fund further,sponsorship and member interests moved to road safetyand environment. Experiments with the use of theInternet also started, such as the independent“RoadPeople.org” and the World Bank’s Transport Sec-tor Development Initiative, which provides internet sup-port for transport sector consultations.

With assistance from the World Bank, the ARUPconvened “Road Stakeholder Consultation Program”workshops in each of the four provinces of Pakistan fromAugust to September 2000 and the concluding sessionwas held in Islamabad on 18 January 2001. At the con-cluding session, the main recommendations, endorsedby the Federal Minister for Communications and Rail-ways were:

(i) To gradually move the National Highway Au-thority (NHA) from a highway department/road construction agency mindset towards anetwork operator/service provider role, withgreater customer focus;

(ii) To establish feedback mechanisms to enableregular interaction with road users, and mean-ingful civil society participation at all levels, inall aspects of NHA’s work; and,

(iii) To address issues on standardization for the con-struction industry, prioritization of maintenanceover construction, allocation and distributionof funds, etc.

After four years since the first initiative, the ARUPnow has nine offices throughout the country, with 800individual members, 30 life members, and 20 corporatemembers such as Volvo, Indus Motors, Caltex, and Paki-stan State Oil Company. The Pakistan experience pointsto 3 important observations:

(i) the Association was not part of any grand plan—it was formed because there was local demandfor it;

(ii) the ARUP has a very broad range of represen-tation and interests; and

(iii) the ARUP is self-funded through a combina-tion of membership fees, sponsorships, and pay-ments for projects.

Success of the ARUP was achieved because (i) itwas people-driven and led by several individuals whowanted to make it happen; (ii) there was only minimalfunding which required careful analysis of benefits of eachaction to be taken; (iii) there was a wide cross-section ofcontacts and support; and (iv) it was supported and en-couraged by the World Bank through payment of someexpenses and consultation contracts.

The Pakistan case study highlighted the importanceof the principle of self-reliance, which was consideredone of the main ingredients to a successful roadmaintenance fund. Self-reliance was defined as havingthe countries develop local self-sustaining capacity todrive the transformation process and identify appropri-ate and tailored solutions to address their maintenanceproblems.

Mr. Vincent explained that transformation would bepossible with changes in attitudes of external agenciesand consultants, government agencies, and stakeholders.A learning environment must be in place and learningopportunities could be created through media, meetingsand discussion groups, educational system, and theinternet. Transformation takes time; thus, it would bematerial to have a long-term perspective to anticipatechanges and their impacts. The internet would be a use-ful tool for information dissemination, coordination ofactivities across countries, discussion and feedbackmechanism, and forum for exchanges of experiences be-tween and among countries. And in the transformationprocess, the stakeholders have to see the “big picture”where funding is an integral part of road management,with customers wanting a complete service. In turn, thisrequires the integration of all plans from all agencies andinterested parties.

Suggestions on how to implement road sector trans-formation were given by Mr. Vincent. He mentioned 11components of a solution, namely:

(i) Finance Ministry as lead – The Finance Mi-nistry should drive the initiative to improve theeconomic performance of the road sector;

(ii) Self-reliance goal – The overall goal of the trans-formation of the road sector must be to achievenational self-reliance in all aspects of road man-agement and financing;

(iii) Road transformation board – A national “roadtransformation board” is needed from the start


as a local focus for all initiatives, to oversee thetransformation from start to finish;

(iv) National road transformation initiative –A single nationally-owned road sector transfor-mation initiative should form an umbrella forall relevant projects and activities;

(v) Transformation route – A “transformationroute” to achieving national self-reliance in theroad sector should be selected from the differentpossibilities by the Road TransformationBoard;

(vi) Intellectual independence – National “intel-lectual independence” should be developed inall aspects of road sector decision making. Thisshould include public and political awarenessof possibilities and consequences, as well astechnical skills;

(vii) Information infrastructure – A national infor-mation infrastructure should be developed tomake appropriate and accurate informationabout the road sector available to all who needit at a realistic and locally sustainable cost. Thisshould include current data about roads, deci-sion-making criteria, and current maintenanceand investment plans;

(viii) Progress measurement – Define a method ofand responsibilities for measuring against thetransformation route. This should include thepublication of performance measurements andresponsibilities for actions to overcome anyproblems identified;

(ix) Consultancy on demand – A mechanism isneeded for providing short-term technicalconsultancy inputs at short notice to addressrequirements identified by the TransformationBoard. This should be independent of normaltechnical assistance project procurement de-lays and cut-off dates;

(x) Exchange of Information – Assist the directexchange of international knowledge and ex-perience between and among all stakeholdergroups in countries considering changes andthose already involved in road sector transfor-mation; and

(xi) Removal of lending agency distortions – In thelong-term, acceptance by all funding agenciesof national decision-making methods and pri-orities, subject to independent audit, and theremoval of lending agency-specific distortionsof the road sector.

After the last two presentations, the last work sessionwas grouped according to the functions of all the partici-pants—Finance and Budget Ministry, road agencies, andthe donor agencies and consultants forming their owngroup. Session 4 dealt with the topic on “Self-Reliance inthe Process of Change: How can road sector transforma-tion be achieved? What needs to be done?” (Refer to AnnexD, page 97.)

This was followed by an integrating session on theresults of all the workshop reports and discussions. Thepoints on which consensus was reached are set out belowtogether with concluding paragraphs on “The WayAhead.”

The workshop ended with a closing address fromMr. Tadashi Kondo, Manager, Transportation andCommunications Division (West). Mr. Kondo summa-rized the key points in all the presentations and pro-ceedings during the last two days. He expressed ADB’scontinuing support for road development in its devel-oping member countries (DMCs) and confirmed thatroad maintenance funding will be an important elementin policy dialogues and partnerships with ADB’s mem-ber countries for sector developments. Further, Mr.Kondo also confirmed that ADB will make every effortto secure resources to move forward the work underRETA 5871, one option being to hold national levelworkshops. He suggested that donor consultations beundertaken to identify appropriate mechanisms to as-sist DMCs in conducting these workshops. For coun-try representatives, ADB would welcome feedback on(i) when the workshop should be held, (ii) who shouldparticipate, (iii) budget requirement, (iv) topics to beincluded in the workshop, and (v) specific advice neededfrom ADB.

In conclusion, Mr. Kondo congratulated all the par-ticipants for making the workshop a successful onethrough everybody’s keen interest and active participa-tion. He further added that the objective of sharing knowl-edge and practical experience of RMF has been achieved.He also expressed hope that each would be able to takeback to their countries and institutions some valuableinsights into the problem of “Sustainable Funding forSustainable Roads.”

b. Workshop Sessions and Results

The detailed tabulation of the results of the discus-sions and each work group’s comments and recommen-dations are shown in Annex D, pages 91-99. Summariesfor each of the work sessions are provided below.


Session 1 – Painting the RoadMaintenance Scene

The majority of the member country participantsagreed that not enough money is allocated to mainte-nance and of the money allocated to the road sector, notenough is spent on maintenance. Too much money isspent on improvements and construction of new roadsand bridges. Moreover, the money actually allocated formaintenance are not released for spending or releasedtoo late to be spent for the current year. These factors ledto the participants agreeing that maintenance work is notdone effectively and that maintenance money is notallocated to the right things. However, the majority dis-agreed with the statement that no more roads should bebuilt or improved, until existing roads are being properlymaintained.

The groups made several points on the road mainte-nance problem. They recognized that inefficiency, lackof (law) enforcement, and inadequate system of account-ability are contributing factors. Furthermore, new roadsare not of good quality, thus requiring higher mainte-nance costs. Quality of roads is critically dependent ongood governance/management. The problem is also ag-gravated by a tiered management/ government structurethat makes it difficult to balance the allocation of fundsbetween development and maintenance. On the privatesector side, there is lack of capacity/capability on the partof the construction industry to undertake road mainte-nance. Addressing this maintenance funding problem mayrequire that money be sourced from road user charges ora road fund.

Session 2 – Your Ideas on Solving RoadMaintenance Problems: What can you learnfrom others? What should be done?

Learning from the experiences of other countries wasconsidered to be beneficial by the participants. The ma-jority was of the opinion that government agencies/poli-ticians agree that an RMF is a good idea, and that technicalassistance projects aimed at improving road maintenancehave been a big help.

To solve the problems, most of the groups had simi-lar responses. First, a culture of maintenance is required,together with a good maintenance management systeminvolving institutional capacity, equipment and resources.Second, road users must recognize the link between fees

they pay and the conditions of the road. The third impor-tant factor is for government to have the (political) will/commitment through a legislation to create a road fund.Local consultants should also be made part of the coreteam to ensure ownership and sustainability. Fourth, whenthe funding for a road fund is from a fuel levy, this levyshould take into account axle load/damage to roads andshould be based on fuel consumption. Last, good gover-nance and transparency would be required in the use andallocation of the funds.

Session 3 – “Best Practice” – An Indepen-dent Road Maintenance Fund as a Path toProper Road Maintenance

Most of the participants disagreed with the state-ment that maintenance and new works must be placed inthe same pot and prioritizing them based on economicreturns. Their view was that social considerations mustalso be considered.

In terms of the RMF structure, the majority agreedthat an independent board must control the fund topromote proper road maintenance. The RMF boardmembers should be persons representing road user inte-rests. In terms of funding, a road tariff should fund theRMF and the Ministry of Finance should promote theestablishment of such a fund. However, most participantsdisagreed that the RMF Board chairman should be cho-sen from among the members representing road user in-terests.

While agreeing to the RMF, the groups emphasizedthat there must be a clear separation of responsibilitiesbetween the road board and the road agency. There shouldalso be a road authority which implements maintenanceworks as one of its functions. The fund should be createdwith assured revenues, empowered by law and with in-spection, supervision, and quality control systems. In theuse of funds, the RMF should cover main roads and lendsupport to secondary and minor roads subject to avail-ability of funds.

The need for donors/lending agencies’ support wasalso pointed out. Aside from technical assistance and loanfunding, donor should be flexible in order to contributeto the government priorities with minimal, affordableconditions. Other forms of funding agency support men-tioned were the provision of seed money for setting upthe RMF, until it becomes self-sustaining, and fundingof maintenance works for new road projects.


Session 4 – Self-Reliance in the Process ofChange: How can road sector transformationbe achieved? What else needs to be done?

The member countries were mostly in agreementwith the statement that the “Finance Ministry should drivethe initiative to improve the economic performance ofthe road sector.” The majority of the donor/lending agencyrepresentatives and consultants, however, disagreed withthis statement.

In the succeeding statements, both the DMCsand the funding agencies/consultants indicated the sameresponse/view. In particular, they all agree that:

(i) National self-reliance is essential for sus-tainability of improved economic performanceof the road sector;

(ii) A transformation board should be created fromthe start;

(iii) A national “intellectual independence” shouldbe developed in all aspects of road sector deci-sion-making;

(iv) It is essential to make road sector informationeasily available to all stakeholders;

(v) Arrangements are needed for “rapid response”consultancies;

(vi) Arrangements are needed to improve interna-tional exchange of knowledge;

(vii) Lending agency requirements/procedures ad-versely distort local decision-making process;and,

(viii) In the long term, lending agencies should trustlocal decision making processes that have beensubject to independent audit.

Given all these considerations, the groups empha-sized the importance of the following factors:

(i) Political will and joint initiative coming fromthe Ministry of Finance and concerned depart-ments;

(ii) Support of road users generated through par-ticipatory initiatives and consultative processesto drive the road sector reforms;

(iii) Legal coverage (legislation) for effective imple-mentation;

(iv) Institutional reforms in concerned agency.Donor/lending agencies should help to developlocal capacity to sustain these reforms; and

(v) Review and improvement of procurementguidelines and procedures needed from boththe funding agencies and recipients.

c. Conclusions: The Way Ahead

The issues raised and perspectives shared by the par-ticipants during the workshop sessions indicated approvalof the basic proposal to establish an independent roadmaintenance fund. However, the participants were not infull agreement that first priority should be accorded tomaintenance. Many of the participants also did not agreewith the test of economic return as a means of allocatingfunds. Economic plus social return was the acceptablemeans. In this regard, the message emphasized by themember countries was that road network developmentwas so important that maintenance may be sacrificed infavor of development.

There was recognition of the benefits providedthrough technical support from international agencies.Further and continued support from these agencies wasmentioned. The uniqueness of each country was madeclear, as well as the value of learning from the experiencesof other countries. Exchange of ideas was one of the ap-proaches identified.

The 20 member countries acknowledged that initia-tives, even in collaboration with funding agencies, toimprove the road sector have often stalled or improve-ments have been slow because of inadequacies relating to(i) governance, (ii) “ownership,” and (iii) self-reliance.In this regard, they strongly supported (i) self-reliance asa goal, (ii) the proposition that they should determinetheir own future, and (iii) continued funding support.

There was strong agreement with self-reliance as anational goal. Pursuing reforms in the sector would haveto be initiated by the DMCs through a “transformationprocess” that is “owned” by the countries themselves. Theywould have to discover for themselves what needs to bechanged in the road sector to remedy deficiencies, one ofwhich is poor maintenance. A road maintenance fundmay, or may not, be one of the changes they would iden-tify as a need.

In all the processes that each DMC would gothrough, ADB will make every effort to assist their initia-tives through on-going policy dialogues and donor con-sultations.


Day 1 – Understanding the PDay 1 – Understanding the PDay 1 – Understanding the PDay 1 – Understanding the PDay 1 – Understanding the Prrrrroblemoblemoblemoblemoblem6 March 20016 March 20016 March 20016 March 20016 March 2001ChairpersonChairpersonChairpersonChairpersonChairperson: Mr: Mr: Mr: Mr: Mr. P. P. P. P. Prrrrreben Nielseneben Nielseneben Nielseneben Nielseneben NielsenDeputy DirDeputy DirDeputy DirDeputy DirDeputy Directorectorectorectorector, Infrastructur, Infrastructur, Infrastructur, Infrastructur, Infrastructure,e,e,e,e,EnerEnerEnerEnerEnergygygygygy, and F, and F, and F, and F, and Financial Sectorsinancial Sectorsinancial Sectorsinancial Sectorsinancial SectorsDepartment (West), ADBDepartment (West), ADBDepartment (West), ADBDepartment (West), ADBDepartment (West), ADB

08.30 – 09.0009.00 – 09.15 Welcome Address: Myoung-Ho Shin,

Vice-President (Region West), ADB09.15 – 10.00 Painting the (Maintenance) Scene

Marcelo Minc, Country Portfolio Man-ager, Philippines Country Office, ADB

10.15 – 10.30 Introduction of Questions and Instruc-tions for Work Session 1

10.30 – 12.00 Work Session 1

“You should first preserve what youhave.” Is this ever wrong?Does your country have a problem of in-adequate maintenance?Prioritize and comment on the prob-lems…

Money not spent efficientlyMoney not spent effectivelyMoney allocated but not spentMoney not allocated

12.00 – 12.30 Plenary Session: Reporting and Discus-sion

13.45 – 15.30 Learning from Others African RoadsWilliam Paterson, World BankLatinAmerican Roads

Gerhard Metschies, GTZ Asian andPacific Road Fund Initiatives

Dieter Niemann, UNESCAP

Appendix 4. Annex A:Workshop Program

15.45 – 16.00 Introduction of Questions and Instruc-tions for Work Session 2

16.00 – 17.00 Work Session 2

How can the experience of others helpyou (in road maintenance)CommercializationStakeholder involvement/controlApplicability in your country

17.00 – 17.30 Plenary Session: Reporting andDiscussion

Day 2 – The Way AheadDay 2 – The Way AheadDay 2 – The Way AheadDay 2 – The Way AheadDay 2 – The Way Ahead7 March 20017 March 20017 March 20017 March 20017 March 2001ChairpersonChairpersonChairpersonChairpersonChairperson: Mr: Mr: Mr: Mr: Mr. Khaja Moinuddin. Khaja Moinuddin. Khaja Moinuddin. Khaja Moinuddin. Khaja MoinuddinDeputy DirDeputy DirDeputy DirDeputy DirDeputy Directorectorectorectorector,,,,,InfrastructurInfrastructurInfrastructurInfrastructurInfrastructure, Enere, Enere, Enere, Enere, Energy and Fgy and Fgy and Fgy and Fgy and FinancialinancialinancialinancialinancialSectors Department (East), ADBSectors Department (East), ADBSectors Department (East), ADBSectors Department (East), ADBSectors Department (East), ADB

08.30 – 09.15 Roads for Leading the Way to Develop-ment: Build Nicely, Maintain

Properly, and Drive SafelyK.E. Seetharam, OperationsEvaluation Office, ADB

09.15 – 10.30 Road Fund Experience in SelectedAsian Countries (Country Presenta-tions and Discussions)• Lao People’s Democratic Republic:

Veingsavath Siphandone, ActingDirector-General, Department ofRoads, Ministry of Communication,Transport, Post and Construction

• Nepal: A.P. Khanal, Director-General, Department of Roads ·Pakistan: Syed Najmul Hasan,


Member, Operations Unit, Natio-nal Highway Authority·Philippines: Linda Templo,Director, Planning Services,Department of Public Works andHighways

10.45 – 11.15 Suggested Framework for a Road Main-tenance FundRon Allan, TA 5871 Road Funds Strat-egy Consultant

11.15 – 12.15 Work Session 3

Will a road maintenance fund work?Is there a better way?

What do you need to make the roadmaintenance fund work?Who shouldbe involved?

How can donors assist?

13.15 – 13.45 Plenary Session: Reporting and Discus-sion

13.45 – 14.15 Stakeholder Participation: Case Study,Pakistan

Stephen Vincent, Road Manage-ment Specialist

14.15 –15.00 Self-Reliance in the Process of ChangeStephen Vincent and Ron Allan

15.15 – 16.15 Work Session 4

Group Discussions according to func-tions: (1) Finance and Budget Ministryand (2) Road Agencies Agreementson the Way Ahead

16.15 – 17.00 Plenary Session: Reporting andDiscussion

17.00 – 17.45 The Way AheadWhat is the Consensus?Timetable for the Next Steps

17.45 – 18.00 Closing RemarksTadashi Kondo, Manager, Transport andCommunications Division (West), ADB

Appendix 4: Annex B. List of Participants 77

Appendix 4. Annex B:List of Participants

1. Developing Member Countries

CountryCountryCountryCountryCountry Name/PositionName/PositionName/PositionName/PositionName/Position OrganizationOrganizationOrganizationOrganizationOrganization AddressAddressAddressAddressAddress

Bangladesh Md. AfsaruddinDeputy Secretary

A.M. Gias ChowdhuryAdditional Chief EngineerNetwork Management & BOT

S. Abdul MalekJoint Chief

Syed Golam KibriaJointSecretary

Ministry of Communications

Road and Highways Dept.

Physical Infrastructure Div.Planning Commission

FinanceDivisionMinistry of Finance

! : Bangladesh Secretariat,Dhaka#:! : Sarak Bhaban, Ramma,Dhaka 1000# : (+880-2) 9661186 (Fax)$ : [email protected]! : Block 4, Rm 17, Sher-e-BanglaNagar, Dhaka# : (+880-2) 8114707, 9115011! : Bangladesh Secretariat,Dhaka 1000# : (+880-2) 8614484; 8620519;F-8615581

Bhutan Lam DorjiDirector of Budget

Tshering Wangdi ‘B’Superintendent Engineer

Ministry of Finance

Road MaintenanceDepartment of Roads

! : P.O. Box 1032, Thimpu,# : (+97-52) 326775-80; 324121;325748; F-325748$ : [email protected]! : Thimpu, Bhutan# : (+97-52) 325913; F-323177$ : [email protected]

Cambodia Thirong PenDeputy Director Department of Investment andCooperationMinistry of Economyand Finance

! : Street 92, Sangkat WattPhnom, Khan Daun Pen, PhnomPenh# : (+855-23) 430774; F-430137$ : [email protected] and

p_thirong@hotmai l .comChina,People’sRepublic of

Dongxiang LiDeputy Director

Wen ZhangDeputy Division Chief

IFI Division III, InternationalDepartmentMinistry of Finance

Foreign Capital UtilizationOffice, Planning Dept.,Ministry of Communications

! : San Li He, West City District,Beij ing 100820# : (+86-10) 68551170;68551120; F-8551119$ : [email protected]! : 11 Jianguomennei Avenue,Beij ing 100736# : (+86-10) 65293101;65293103; 65292345; 65293163;F-65292101$ : [email protected]


CountryCountryCountryCountryCountry Name/PName/PName/PName/PName/Positionositionositionositionosition OrganizationOrganizationOrganizationOrganizationOrganization AddressAddressAddressAddressAddress

Fiji Islands David KolitaganeEconomic Planning Officer

Cama TuilomaActing Deputy Secretary

Budget DivisionMinistry of Finance

Planning and DesignPublic Works DepartmentMinistry of Works and Energy

! : Ro Lalabalavu House, Victoria Parade,Suva, Fiji Islands, or P.O. Box 2212,Government Buildings, Suva#: (+67-9) 962284; 395595;F-315728; 308096$ : [email protected]! : Nasilivata House, Kings Road,Samabula#: (+67-9) 384111; F-383198$ : [email protected]

India Deepak Dasgupta ChairmanNational Highways Authorityof India

! : 1, Eastern Avenue, Maharani Bagh,New Delhi 110 065#: (+91-11) 6923901; F-6924383: :[email protected]

Indonesia Imron BulkinBureau Chief

Hendrianto NotosoegondoDirector General of RegionalInfrastructure

Transportation, Post,TelecommunicationsNational DevelopmentPlanning Agency

Ministry of Settlements and RegionalInfrastructure

! : Jalan Taman Suropati 2,Jakarta 10310#: (+62-21) 3148550; 3905650;F-3148550$ : [email protected]! : Jalan Patimura No. 20, JakartaSelatan#: (+62-21) 7221039; F-7201760$ : [email protected]

Kazakhstan Djalmukhanov ErjanLeading Economist/Specialist

Chingiz SadvakassovLeading Economist/Specialist

Department of External StateBorrowingMinistry of Finace

Department of External StateBorrowingMinsitry of Finance

! : 52 Abai Avenue, Astana473000#: (+731-72) 117704; F-321058$ : [email protected]! : 52 Abai Avenue,Astana 473000#: (+731-71) 117704; F-117762$ : [email protected]

Kyrgyz Republic Ahmatbek K. KeldibekovDeputy Minister

Kubanychbek A. MamaevFirst Deputy Minister

Ministry of Finance

Ministry of Transportation andCommunications

! : 58 Erkindik Avenue, Bishkek 720874#: (+996-213) 610073 (c/o KRM)$ : [email protected] (c/o Aziz Aaliev)! :42 N. Isanov St., Bishkek 720017#: (+996-312) 262672; 662148:F-610810; 621710; 662148$ : [email protected] (c/o KRM)

Lao People’sDemocraticRepublic

Sayphet AphayvanhDeputy Director and DeputyChairman of the RoadMaintenance Fund Board

Sisomphanh PhinsipasomDeputy Director

Sivixay SayanavongphetDeputy Director General

Viengsavath SiphandoneActing Director-General

External Relations Dept.Ministry of Finance

Road Administration DivisionDepartment of Roads,MCTPC

Office of InternationalCooperation, CIC

Department of Roads,MCTPC

! : Thatluang Road, Vientiane#: (+856-21) 412847; 414358;F-414358$ : [email protected] (c/o Mr. RichardTomkins)! : Lanexang Avenue, P.O. Box 4467,Vientiane#: (+856-21) 415378; 451541;F-414553$ : [email protected]! : Luangprabang Road, Vientiane#: (+856-21) 216654; 417073;F- 222213$ : [email protected]! : Lanexang Avenue, P.O. Box 4467,Vientiane# : (+856-21) 412741; 512678;F-414132$ : [email protected]



Mongolia Gombo LkhamjavHead of Division and ProjectManager

Tungalag TserennadmidDesk Officer for ADB, USA andCanada

Planning and Research DivisionDepartment of Roads

Department of EconomicCooperation and CoordinationMinistry of Finance and Economy

! : Government Bldg. 2,Ulaanbaatar 210646#: F-(+976-11) 310612$ : [email protected] ;[email protected]! : Negdsen Ubdestnii gudamj-5/1,Ulaanbaatar 210646#: (+976-11) 329044; 321806;F-320247; 329044$ : [email protected]

Nepal Mahesh B. KarkiUndersecretary

A.P. KhanalDirector General

Ministry of Finance

Department of Roads

! : Bagdurbar, Kathmandu#: (+977-1) 259779; 490753;F-259779; 227529$ : [email protected]! : Babarmahal, Kathmandu#: (+977-1) 262675; 417743;F-626993$ : [email protected]

Pakistan Syed Najmul HasanMember, Operations

Mohammad SarwarDeputy Secretary

Nazar Mohammad ShaikSecretary

National Highway Authority

Ministry of FinanceCommunications Division

Ministry of Communicationsand Railways

! : 27 Mauve Area G-9/1,Islamabad#: (+92-51) 9260407; 2252006;F-9261139$ : [email protected]! : Room 326, Pak Secretariat, Block Q,Islamabad#: F-(+92-51) 9211316$ :! : D Block, Pak Secretariat,Islamabad#: (+92-51) 9201252; 9208694;F-9221300$ : [email protected]

Papua NewGuinea

Isaac LupariSecretaryAlphonse NigginsSecretaryKain WosaeSenior Economic PolicyExpert

Department of Transport andCivil Aviation

Department of Works andImplementation

Department of Treasury

! : P.O. Box 1489. Port Moresby, NCD(: F-(+67-5)3236186$ :! : P.O. Box 1108, Boroko, NCD#: (+67-5) 3241401; F-3241277$ :! : Vulupindi Haus, P.O. Box 710, Waigani,NCD#: (+67-5) 3288141; 3288441;3288472; F-3288425$ : [email protected]

Philippines Cynthia G. CastelUndersecretary for Policy andManagement

Jocelyn M. IsidroAssistant Director

Ruben S. Reinoso, Jr.Director

Linda TemploDirector

Department of Budget and Manage-ment

Foreign-assisted Projects Bureau, BM-E

Department of Budget and Manage-mentInfrastructure StaffNational Economic andDevelopmentAuthority Planning ServicesDepartment of Public Works andHighways

! : Malacañang, Manila#: (+63-2) 7351981; 7351650;F-7354845$ : [email protected]! : Malacañang, Manila#: (+63-2) 7351789; F-7351742$ : [email protected]! : Amber Avenue, Pasig City#: (+63-2) 631-0957 to 64;F-6312188$ : [email protected]! : Bonifacio Drive, Port Area, Manila#: (+63-2) 3-43267; F-3043033



Sri Lanka K.N.J. CoorayDeputy Director

S.L. SeneviratneSecretary

National Budget DepartmentMinistry of Finance and Planning

Ministry of Highways

! : Gall Face Secretariat, Colombo 01#: (+94-1) 32870; F-433674; 324784$ : [email protected]! : 9th Floor, “Sethsiripaya,” Battaramula#: (+94-1) 862746; 862712;F-862705

Tajikistan Pulat K. IshmatovChief

Rano ZabirovaDeputy Chief

Construction DepartmentMinistry of Transport

State Budget DepartmentMinistry of Finance

! : Dushanbe 734042, 14, Aini St.#: (+737-73) 211713; F-212003;(+992-91) 9015051 (c/o ADB TajikistanLiaison Office)$ : [email protected]! : Room 23, 3 Academician, Rajabov’sAvenue 734025, Dushanbe#: (+992-372) 213905; 350832;F-216796$ : [email protected]

Thailand Sirasa KanpittayaSenior Economist

Khun Likhit KhaodhiarDirector General

Government Loan Project SectionPublic Debt Management Office,Ministry of Finance

Department of HighwaysMinistry of Transport

! : Rama VI Road, Bangkok 10400#: (+66-2) 2739020 ext 3417;2519078; F-2739058$ : [email protected]! : Sri Ayuthaya Road, Bangkok 10400#: (+66-2) 2455501

Uzbekistan Mahmudjon S.AbdurahmanovDeputy Minister

Abdusalom M. AlimovManager

Ministry of Finance

Project Implementation UnitUzavtoyul

! : 5 Mustakillik Square, 700008Tashkent#: (+998-71) 1394949;F-1394539;1391033$ : c/o [email protected]! : 68-A Pushkin St., Tashkent 700000#: (+998-71) 1372628; F-682711;1362276$ : [email protected]

Viet Nam Nguyen Thanh PhuongDeputy Head

Financing and Accounting DivisionViet NamViet Nam RoadAdministration, Ministry of Transport

! : 106 Thai Thinh St., Dong Da District,Hanoi#: (+84-4) 8571449; F-8571440$ : c/o [email protected]


2. Resource Speakers

Name/PName/PName/PName/PName/Positionositionositionositionosition OrganizationOrganizationOrganizationOrganizationOrganization AddressAddressAddressAddressAddress

William PatersonTask Manager

East Asia Transport UnitWorld Bank ! : 1818 H NW St., Washington D.C., USA#:$ : [email protected]

Gerhard MetschiesSenior Transport Engineer

German Agency forTechnical Cooperation(GTZ-Deutsche Gesellschaft fürZusammenarbeit GmbH)

! : Dag-Hammarskjöld-Weg 1-5,Postfach 51 80, 65726 Eschborn, Switzerland# : (+41-6196) 791354; F-797194$ : [email protected]

Dieter NiemannHighway TransportEngineering Expert

Transport, Communicationsand Tourism DivisionUnited Nations Economicand Social Commission forAsia and the Pacific(UNESCAP)

! : UN Building, Rajademnern Nok Avenue,Bangkok, Thailand 10200# : (+66-2) 2881568; F-2806042$ : [email protected]

Stephen VincentRoad Management Specialist

Scott Wilson ! : Scott House, Basing View, Basingstroke,Hampshire RG21 4JG, England# : (+44-0) 1256461161;F- 1256 460582$ : [email protected]

Marcelo J. MincCountry Portfolio Manager

Philippine Country OfficeAsian Development Bank

! : #6 ADB Avenue, Mandaluyong City,Philippines# : (+63-2) 6324444 ext. 1021$ : [email protected]

K. Seetharam Operations and EvaluationOfficeAsian Development Bank

! : #6 ADB Avenue, Mandaluyong City,Philippines# : (+63-2) 6324444$ : [email protected]

3. Funding Agencies


Werner P. MeyerSenior Technical AdviserRural Development Program

German Agency forTechnical Cooperation (GTZ)

! : GPO Box 1457, Kathmandu, Nepal# : (+977-1) 526454; 530299;F-535896$ : [email protected]

Japan Rose AngelesProject Officer

Mr. Takao ShimokawaRepresentative

Japan Bank for InternationalCooperation– Manila Representative OfficeJapan Bank for InternationalCooperation– Hanoi Representative Office

! : 31st Floor, Citibank Tower, Valero cor.Villar St., Makati City, Philippines# : (+63-2) 8481828; F-8481833$ : [email protected]! : 4th Floor, 63 Ly Thai To St., Hanoi,Viet NamViet Nam#: (+84-4) 8248934; F-8248937$ : [email protected]

Sweden Nils BruzelliusConsultant

Swedish International DevelopmentCooperation (SIDA)

! : Mataregranden 6, S-226 47 Lund,Sweden# : (+46-46) 151354; 151351;F-(+46-708) 151356$ : [email protected]

Germany



Sweden Klas RasmussonFirst Secretary

Embassy of Sweden ! : P.O. Box 800, Vientiane, Lao PDR# : (+856-21) 315017/8;F-315001$ : [email protected]

United Kingdom Colin BenhamSector Manager

Peter RobertsDeputy Chief EngineeringAdviser

Department for InternationalDevelopment (DFID) –BangladeshOffice

Department for InternationalDevelopment (DFID)

! : British High Commission, DutabreshRoad, Bardhara, Dhaka 1212, Bangladesh#: (+880-2) 8822589; F-8823181$ : [email protected]! : (: (+020) 79170542;F-79170864$ : [email protected]

Geoff A. Edmonds Programme CoordinatorASIST-Asia PacificInternational Labor Office (ILO)

! : United Nations Building, RajdamnernNok Avenue, P.O. Box 2-349, Bangkok10200, Thailand# : (+66-2) 2882302; F-2808030$ : [email protected]

4. Consultants


Steve FurstSenior AssociateInstitutional Capability Strengthening ofthe Viet Nam Road Administration–Ministry of Transport, Viet Nam

Booz, Allen and Hamilton ! :8283 Greensboro Drive, McLean, Virginia22102-3838, USA#: (+84-4) 5370987 (Hanoi);F- 5370899$ : [email protected]

David Lupton ! : P.O. Box 875, Wellington, New Zealand# : (+64-21) 421848$ : [email protected]

Derek ShermanDirector

The Louis Berger Group, Inc. ! : 10th Flr. Q House Convent, Suite 10 B, 38Convent Road. Silom, Bangkok 10600,Thailand# : (+66-2) 2353551; F-236-1353$ : [email protected]

Don SmithTechnicalDirector

WSP International ! : First Point, Buckingham Gate, GatwickAirport, West Sussex RH 60NT, United Kingdom#: (+44) 1293 602600; F-1293 602699$ : [email protected]

Richard TomkinsProject Team LeaderADB Management Information SystemsProject – MCTPCLao PDR

Hyder Freeman, Fox ! : Room 28, MCTPC, Lane Xang Avenue, P.O.Box 6958 Vientiane, Lao PDR# : (+856-21) 413362$ : [email protected]


5. ADB Officials

DivisionDivisionDivisionDivisionDivision NameNameNameNameName PPPPPositionositionositionositionosition E-mailE-mailE-mailE-mailE-mail

IWTC Hans Carlsson Senior Project Specialist :: [email protected]

AWAR Michael Dembinski :: [email protected]

IWTC Tyrell Duncan Transport Economist :: [email protected]

PhCo Günther Hecker Chief :: [email protected]

IWTC Yoichi Ishikawa Transport Specialist :: [email protected]

OPO Sirpa Jarvenpaa :: [email protected]

IWTC Thomas F. Jones III Senior Project Economist :: [email protected]

IWTC Tadashi Kondo Manager :: [email protected]

IETC Jin Koo Lee Manager :: [email protected]

IEOD Charles Melhuish Senior Transport Specialist :: [email protected]

IWTC Makoto Mizutani Transport Specialist :: [email protected]

IEOD Khaja Moinuddin Deputy Director :: [email protected]

IWOD Preben Nielsen Deputy Director :: [email protected]

ITEC Makoto Ojiro Senior Project Economist :: [email protected]

EDEV Nigel Rayner Asst. Chief Economist :: [email protected]

Myoung-Ho Shin Vice-President, West Region :: [email protected]

IETC Sangpa Tamang Senior Project Analyst :: [email protected]

IWTC Shunso Tsukada Senior Project Specialist :: [email protected]

IWTC Paul Vallely Transport Specialist :: [email protected]

IWTC Sri Widowati Project Engineer/Environment Specialist :: [email protected]

IWTC Teresa Mella Assistant Project Analyst :: [email protected]

6. TA 5871: Road Funds Strategy Consultants


Australia Ronald R. AllanRoad Funds Consultant

! : 10 Rustic St., P.O. Box 1168, Kenmore,Brisbane, Australia# : (+61-7) 38784645; F-38784943$ : [email protected]

Philippines Ma. Norma Olga R. CadayEconomics ResearchConsultant

! : Unit 302, Aurora Bldg., 3540 Gen. LucbanSt., Bangkal, Makati City# : (+63-917) 537-6043 (mobile)$ : [email protected]


Appendix 4.Annex C: Groupings for theWorkshop Sessions

1. Working Sessions 1, 2, and 3

GROUP AGROUP AGROUP AGROUP AGROUP A

CountryCountryCountryCountryCountry PPPPParticipantarticipantarticipantarticipantarticipant

Bhutan Tshering Wangdi ‘B’Superintendent Engineer for Road Maintenance, Department of Roads

Fiji Islands David KolitaganeEconomic Planning Officer (Infrastructure), Department of Treasury

Indonesia Imron BulkinBureau Chief for Transportation, Post and Telecommunications, National DevelopmentPlanning Agency

Kazakhstan Chingiz SadvakassovLeading Economist/Specialist, Dept. of External State Borrowing, Ministry of Finance

Kyrgyz Republic Ahmatbek KeldibekovDeputy Minister, Ministry of Finance

Philippines Cynthia CastelUndersecretary, Department of Budget and Management

Tajikistan Pulat K. IshmatovChief, Construction Department, Ministry of Transport

Uzbekistan Abdusalom M. Alimov Manager, Project Implementation Unit, Uzavtoyul

GROUP BGROUP BGROUP BGROUP BGROUP B


Bangladesh A. M. Gias ChowdhuryAssistant Chief Engineer, Roads and Highways Department

Kazakhstan Djalmukhanov ErjanLeading Economist/Specialist, Dept. of External State Borrowing, Ministry of Finance

Kyrgyz Republic Kubanychbek A. MamaevFirst Deputy Minister, Ministry of Transportation and Communications

Lao PDR Viengsavath SiphandoneActing Director-General, Department of Roads, MCTPC

Pakistan Syed Najmul HasanMember, Operations Unit, National Highways Authority

Philippines Ruben S. Reinoso, Jr.Director, Infrastructure Staff, National Economic and Development Authority

Tajikistan Rano ZabirovaDeputy Chief, State Budget Department, Ministry of Finance

Uzbekistan Mahmudjon S. AbdurahmanovDeputy Minister, Ministry of Finance


GROUP DGROUP DGROUP DGROUP DGROUP D


Bangladesh Abdul MalekJoint Secretary, Planning Commission

Indonesia Hendrianto NotosoegondoDirector General of Regional Infrastructure, Ministry of Settlements and Regional Infrastructure

Lao People’s Sivixay SayanavongphetDemocratic Republic Deputy Director-General, Office of International Cooperation, CIC

Papua New Guinea Kain WosaeSenior Economic Policy Expert, Department of Treasury

Sri Lanka S.L. SeneviratneSecretary, Ministry of Highways

Thailand Sirasa KanpittayaSenior Economist, Ministry of Finance

Viet Nam Nguyen Thanh PhuongDeputy Head of Financing and Accounting Division, Viet Nam Viet Nam RoadAdministration, Ministry of Transport

GROUP CGROUP CGROUP CGROUP CGROUP C


Bangladesh Syed Golam KibriaJoint Secretary, Finance Division, Ministry of Finance

Cambodia Thirong PenDeputy Director, Dept. of Investment and Cooperation, Ministry of Economy and Finance

People’s Republic Wen ZhangDeputy Division Chief, Foreign Capital Utilization Office, Planning Dept., Ministry of Communications

Fiji Islands Cama TuilomaActing Deputy Secretary, Planning and Design, Public Works Department, Ministry of Works and Energy

India Deepak DasguptaChairman, National Highways Authority of India

Lao PDR Sayphet AphayvanhDeputy Director of External Relations Dept., Ministry of Finance, & Deputy Chairman of RMF Board

Philippines Jocelyn M. IsidroAssistant Director, Foreign-Assisted Projects Bureau, Department of Budget and Management

of China

Appendix 4: Annex C. Groupings for the Workshop Sessions 87

GROUP EGROUP EGROUP EGROUP EGROUP E


Bhutan Lam DorjiDirector of Budget, Ministry of Finance

Lao PDR Sisomphanh PhinsipasomDeputy Director, Road Administration Division, Department of Roads, MCTPC

Mongolia Gombo LkhamjavHead of Division and Project Manager, Planning and Research Division, Department of Roads

Mongolia Tserennadmid TungalagDesk Officer, Dept. of Economic Cooperation, Mngt. & Coordination, Ministry of Finance & Economy

Nepal Mahesh B. KarkiUndersecretary, Ministry of Finance

Papua New Guinea Isaac LupariSecretary, Department of Transport and Civil Aviation

Philippines Linda Templo Director, Planning Services, Department of Public Works and Highways

GROUP FGROUP FGROUP FGROUP FGROUP F


Bangladesh Md. AfsaruddinDeputy Secretary, Ministry of Communications

People’s Dongxiang LiRepublic of China Deputy Director, IFI Division III, International Department, Ministry of Finance

Nepal A.P. KhanalDirector-General, Department of Roads

Pakistan Nazar Mohammad ShaikSecretary, Department of Communications and Highways

Papua New Guinea Alphonse NigginsSecretary, Department of Works and Implementation

Sri Lanka K.N.J. CoorayDeputy Director, National Budget Department, Ministry of Finance and Planning

Thailand Khun Likhit KhaodhiarDirector-General, Department of Highways, Ministry of Transportation


GROUP AGROUP AGROUP AGROUP AGROUP A


Bangladesh A. M. Gias ChowdhuryAssistant Chief Engineer, Roads and Highways Department

Bhutan Tshering Wangdi ‘B’Superintendent Engineer for Road Maintenance, Deparment of Roads

Indonesia Imron BulkinBureau Chief for Transportation, Post and Telecommunications, National Development Planning Agency

Kyrgyz Republic Kubanychbek A. MamaevFirst Deputy Minister, Ministry of Transportation and Communications

Lao PDR Viengsavath SiphandoneActing Director-General, Department of Roads, MCTPC

Pakistan Syed Najmul HasanMember, Operations Unit, National Highways Authority

Tajikistan Pulat K. IshmatovChief, Construction Department, Ministry of Transport

Uzbekistan Abdusalom M. AlimovManager, Project Implementation Unit, Uzavtoyul

GROUP BGROUP BGROUP BGROUP BGROUP B


Bangladesh Abdul MalekJoint Secretary, Planning Commission

Fiji Islands David KolitaganeEconomic Planning Officer (Infrastructure), Department of Treasury

Kazakhstan Djalmukhanov ErjanLeading Economist/Specialist, Dept. of External State Borrowing, Ministry of Finance

Kyrgyz Republic Ahmatbek KeldibekovDeputy Minister, Ministry of Finance

Philippines Cynthia CastelUndersecretary, Department of Budget and Management

Tajikistan Rano ZabirovaDeputy Chief, State Budget Department, Ministry of Finance

Uzbekistan Mahmudjon S. AbdurahmanovDeputy Minister, Ministry of Finance

2. Working Session 4

Appendix 4: Annex C. Groupings for the Workshop Sessions 89

GROUP CGROUP CGROUP CGROUP CGROUP C


Bangladesh Md. AfsaruddinDeputy Secretary, Ministry of Communications

People’s Wen ZhangRepublic of China Deputy Division Chief, Foreign Capital Utilization Office, Planning Dept., Ministry of Communications

India Deepak DasguptaChairman, National Highways Authority of India

Indonesia Hendrianto NotosoegondoDirector General of Regional Infrastructure, Ministry of Settlements and Regional Infrastructure

Papua New Guinea Isaac LupariSecretary, Department of Transport and Civil Aviation

Philippines Linda TemploDirector, Planning Services, Department of Public Works and Highways

Sri Lanka S.L. SeneviratneSecretary, Ministry of Highways

Viet NamViet Nam Nguyen Thanh PhuongDeputy Head of Financing and Accounting Division, Viet NamViet Nam Road Administration, Ministry of

Transport

GROUP DGROUP DGROUP DGROUP DGROUP D


Bangladesh Syed Golam KibriaJoint Secretary, Finance Division, Ministry of Finance

Cambodia Thirong PenDeputy Director, Dept. of Investment and Cooperation, Ministry of Economy and Finance

Lao People’s Sivixay SayanavongphetDemocratic Republic Deputy Director-General, Office of International Cooperation, CIC

Mongolia Tserennadmid TungalagDesk Officer, Dept. of Economic Cooperation, Mngt. & Coordination, Ministry of Finance & Economy

Nepal Mahesh B. KarkiUndersecretary, Ministry of Finance

Papua New Guinea Kain WosaeSenior Economic Policy Expert, Department of Treasury

Philippines Jocelyn M. IsidroAssistant Director, Foreign-Assisted Projects Bureau, Department of Budget and Management

Thailand Sirasa KanpittayaSenior Economist, Ministry of Finance


GROUP EGROUP EGROUP EGROUP EGROUP E


Fiji Islands Cama TuilomaActing Deputy Secretary, Planning and Design, Public Works Dept., Ministry of Works and Energy

Lao People’s Sisomphanh PhinsipasomDemocatic Republic Deputy Director, Road Administration Division, Department of Roads, MCTPC

Mongolia Gombo LkhamjavHead of Division and Project Manager, Planning and Research Division, Department of Roads

Nepal A.P. KhanalDirector-General, Department of Roads

Pakistan Nazar Mohammad ShaikSecretary, Department of Communications and Highways

Papua New Guinea Alphonse NigginsSecretary, Department of Works and Implementation

Thailand Khun Likhit KhaodhiarDirector-General, Department of Highways, Ministry of Transportation

GROUP FGROUP FGROUP FGROUP FGROUP F


Bhutan Lam DorjiDirector of Budget, Ministry of Finance

People’s Dongxiang LiRepublic of China Deputy Director, IFI Division III, International Department, Ministry of Finance

Kazakhstan Chingiz SadvakassovLeading Economist/Specialist, Dept. of External State Borrowing, Ministry of Finance

Lao PDR Sayphet AphayvanhDeputy Director of External Relations Dept., Ministry of Finance, & Deputy Chairman of RMF Board

Sri Lanka K.N.J. CoorayDeputy Director, National Budget Department, Ministry of Finance and Planning


Appendix 4, Annex D:Workshop Sessions, Results,and Recommendations

1. Workshop Session 1: “First Preserve What You Have”: Is this everwrong? Does your country have a problem of inadequate maintenance?

DISAGREE AGREE

Workshop Session Questions Work Group Strongly Disagree Neutral Agree Strongly TOTALDisagree Agree

Session 1

1. Not enough money is allocated . A - 1 - 5 2 8to maintenance B - 2 - 4 2 8

C - 2 - 1 4 7D - - - 5 2 7E - - - 5 2 7F - 2 1 4 - 7

Total 0 7 1 2 4 1 2 4 4

2 . Of the money allocated to roads, A 5 2 1 8not enough is spent on maintenance. B 1 4 1 8Too much is spent on improvements C 2 4 - 7and new roads and bridges. D - 4 3 7

E - 7 - 7F - 1 2 7

Total 8 2 2 7 4 43 . Not all the money that is allocated A - 3 1 4 - 8

is actually released for spending. B - 5 - 3 - 8Or it is released too late to be C - 2 1 4 - 7spent that year. D - - - 5 2 7

E - 3 1 2 1 7F - 3 - 4 - 7

Total 0 1 6 3 2 2 3 4 44. Maintenance work is not done A 2 - 3 2 1 8

effectively (costs too much, B - 1 2 5 - 8poor quality). C - - 1 4 2 7

D - - 1 5 1 7E - 2 - 4 1 7F - 3 - 4 - 7

Total 2 6 7 2 4 5 4 4



5. Maintenance money is not A 1 2 1 4 - 8allocated to the right things. B - 3 1 4 - 8

C - 1 1 5 - 7D - - 7 - - 7E - - 2 5 - 7F - 3 - 5 - 8

Total 1 9 1 2 2 3 0 4 5

6. No more roads should be built or A - 4 1 2 1 8improved until the existing roads B - 1 3 4 - 8are being properly maintained C 2 5 - - - 7(first priority is to preserve what D - 7 - - - 7you have). E 2 3 1 1 - 7

F 1 7 - - - 8Total 5 2 7 5 7 1 4 5

Points Made:Group A1. It is more important to spend money on 1 3 3 2

Road maintenance than for other sectors.2. Money for road maintenance should 2 6

be derived only from user charges.3. Road funds should be totally separate 1 2 3 2

And distinct from the national and localBudget.

4. Road maintenance should be performed 2 1 4 1Only by the government.

5. User fees should cover maintenance only 3 3 2 1And not improvement or newconstruction.

Group B1. Ministry of Finance and Executing Agency 8

should be accountable.2. Allocation of funds should be balanced or 8

Split between development andMaintenance based on actual condition ofRoad network.

Group C1. Roads should be maintained by road 7

funds.2. ADB should assist in developing road 1 5 1

Maintenance systems through innovativeMechanisms.

Group D1. Lack of planning. 2 52. Seasonal (wet season). 73. Inefficiency. 74. Law enforcement. 75. Inadequate system of accountability. 76. Conditions on procurement rules imposed 1 4 2

by funding agencies.7. Political influences. 2 5

Appendix 4: Annex D. Workshop Sessions, Results, and Recommendations 93

2. Workshop Session 2: Problems: What can you learn from others?What should be done?

DISAGREE AGREE


1. My country is different. We cannot A 5 3 - - - 8learn much from the experience of B - 7 - - - 7other countries. C 1 5 - 1 - 7

D - 5 1 1 - 7E - 4 2 1 - 7F 6 - - - - 6

TOTAL 1 2 2 4 3 3 0 4 22. In my country, the government A - - 2 5 1 8

agencies/ministries/politicians agree B - 1 3 3 - 7that a road maintenance fund is C - 2 - 4 1 7a good idea. D - - 3 4 - 7

E - 1 3 2 1 7F - - 1 5 - 6

TOTAL 0 4 1 2 2 3 3 4 23. In my country, technical assistance A - - 3 4 1 8

(TA) projects aimed at improving B - - 3 4 - 7road maintenance have been C - - 3 4 - 7a big help. D - 1 - 6 - 7

E - - 1 5 1 7F - - - 6 - 6

TOTAL 0 1 1 0 2 9 2 4 2


Group E

1. New roads are not good enough quality and 7

This leads to higher maintenance costs.2. A tiered management/government 7

structure makes it difficult to allocate moneyto maintenance appropriately.

3. One of the constraints is the 1 6capacity/capability of the constructionindustry to undertake road maintenance.

4. The road administrators do not have the 1 1 5capacity to plan and design maintenancework in time for the budget process.

5. Connectivity should have higher priority 1 1 5Than maintenance.

6. We should be looking at alternative 1 4 2sources of revenue for road maintenance.

Group F1. Construction of roads should be focused 8

on efficient use of funds.2. Quality of roads is critically dependent on 8

good governance/management.



Points Made:Group A1. A culture of maintenance is required. 82. A good maintenance management 8

system is required: institutional capacity,equipment, human resources.

3. Road users recognize link between fees 1 7they pay and the condition of the roads.

4. National roads should be owned and 3 4 1managed by national government,local roads by local government.

5. Local contracting industry should have 8better access to TA for road maintenance,construction, etc.

6. Maintenance contracting terms under 8funding agencies should be supportive of thelocal contracting industries.

Group B1. External support to road maintenance in 2 5

general (TA/project) has been beneficial.2. Local consultants should be part of core

Team to ensure ownership, sustainability. 7Group C1. In order to secure political commitment, 1 6

there should be legislation.2. Road funds should be marketed to the 2 5

people.3. Road fund board should (i) be transparent, 3 4

(ii) involve private/public/road users, and (iii) beheld accountable for fund use and roadquality.

4. Road fund should be applied to higher classes of 2 5roads.

5. Levy should take into account axle load/ 1 6damage to roads.

6. Levy should be based on fuel consumption. 1 67. Levy on type/luxury (vehicle), engine size, 1 6

registration, road/bridge tolls.8. Government support to make up shortfall 3 1 3

in funding will be reduced as fund matures.9. Private sector- – private ownership transfer/ 3 4

concession toll on road usersGroup D1. Political will/commitment from government2. Information and participation3. Good governance/transparency



Group E1. In the experience of Sub-Saharan Africa, there 7

were a number of changes – the most importantwas the extra money.

2. Funding agencies do not like trust funds. 5 23. Funds must be transparent. 74. Some countries are not ready economically for 7

a road fund—direct funding from governmentis still required.

5. Cost sharing and coordination with local 1 4 2government is required.

6. An independent board is the important factor. 2 4 17. The road fund board should consider all road 2 3 1 1

expenditure, not just maintenance.Group F1. Provision of adequate allocations2. Sound inspections/quality controls and

supervision systems3. Axle load control4. Political will5. Planned maintenance6. Appropriate training of technical personnel7. Involvement of road users in monitoring

of maintenance funds8. Building of private sector capability9. Better coordination with relevant agencies

3. Workshop Session 3: “Best Practice”–An Independent Road Mainte-nance Fund as a Path to Proper Road Maintenance

DISAGREE AGREE


Session 31. In principle, would you agree A - 2 - 5 - 7

to putting maintenance and B - 2 - 4 - 6new works in the same “pot” C 4 3 - - - 7and prioritizing on the basis of D - 7 - - - 7economic return? E - 1 - 6 - 7

F - 5 1 1 - 7Total 4 2 0 1 1 6 0 4 1

2. An RMF controlled by an A - - - 6 1 7independent board is one of B - 1 - 5 - 6the best ways of promoting C - - 3 4 - 7proper road maintenance. D - 4 2 1 - 7

E - - 1 3 3 7F - 3 - 4 - 7

Total 0 8 6 2 3 4 4 1



3. It should be the finance ministry A - 1 - 6 - 7that promotes the RMF. B - 1 - 4 1 6

C - - 2 5 - 7D - 5 - 2 - 7E 1 2 - 3 1 7F - 1 - 6 - 7

Total 1 1 0 2 2 6 2 4 14. The majority of RMF board members A - 4 1 2 - 7

should be persons representing B - 3 - 3 - 6road user interests. C - - 3 4 - 7

D - - - 7 - 7E - - 2 3 2 7F - 5 - 2 - 7

Total 0 1 2 6 2 1 2 4 15. The RMF chairman should be chosen A 2 4 - 1 - 7

from the members representing B - 4 - 2 - 6road user interests. C - 2 1 4 - 7

D - 1 4 2 - 7E - 2 - 5 - 7F - 5 - 2 - 7

Total 2 1 8 5 1 6 0 4 16. The road tariff should fully fund the A - 3 - 3 1 7

RMF (in order to protect the RMF’s B - 1 - 5 - 6independence). C - 2 1 4 - 7

D - 5 - 2 - 7E - - - 3 4 7F - - - 7 - 7

Total 0 1 1 1 2 4 5 4 1Points Made:Group D1. To establish road fund, cooperation of

government agencies required.2. Educate people and public.3. Build up capacity.4. More TA and assistance by aid providers.5. Priority : (i) main roads, (ii) secondary

roads, (iii) minor roads.Group E1. Decisions on an RMF must be made in 1 3 2

the context of the entire road sector (includingroads maintained by local authorities).

2. Political will is essential—the idea has to 4 2be sold to stakeholders.

3. There must be clear separation between 5 1the fund board and the road agency.

4. There should be a road authority with 6implementing maintenance as one of itsfunctions.

5. Support from funding agencies is required 3 3for a balanced program for both maintenanceand construction on local priorities andsocial and economic return.



6. Funding agencies should be 2 4flexible in order to contribute to thegovernment priorities with minimal,affordable conditions.

Group F1. RMF should work provided the following

comforts are provided:(i) Assured revenues—free from any raids

or economy cuts;(ii) Vested by law with sufficient autonomy

for ensuring effective maintenance;(iii) Government and users are

adequately represented; and(iv) Inspection, supervision, and

quality control systems.2. RMF should principally cover main roads

and lend support to secondary and minorroads depending on availability of funds.

3. International agencies can assist roadmaintenance by(i) Providing seed money for setting up RMF

until it becomes self-sustaining; and(ii) Provide for maintenance alongside

assistance for new road projects

4. Workshop Session 4: Self-Reliance in the Process of Change: Howcan road sector transformation be achieved? What else needs to bedone?

DISAGREE AGREE


1. Finance Ministry should drive the A - 6 - 1 - 7initiative to improve the economic B - 1 1 5 - 7performance of the road sector. C - 4 1 3 - 8

D - 2 - 5 - 7E - 1 - 4 - 5F - - 1 3 - 4

Total 0 1 4 3 2 1 0 3 8Donors & - 9 4 4 - 1 7

Consultants2. National self-reliance is essential A - - - 6 1 7

for sustainability of improved B - - - 7 - 7economic performance of C - - 1 7 - 8the road sector. D - - - 4 3 7

E - - - 6 - 6F - - - 4 - 4

Total 0 0 1 3 4 4 3 9Donors & - - - 1 3 4 1 7

Consultants



3. A transformation board should be A - 3 1 3 - 7created at the start to oversee the B - - - 7 - 7process of transformation. C 2 4 2 - - 8

D - 4 1 2 - 7E 1 2 - 3 - 6F - 2 1 1 - 4

Total 3 1 5 5 1 6 0 3 9Donors & - - - 1 1 4 1 5

Consultants4. National “intellectual independence” A - - - 7 - 7

should be developed in all aspects B - 1 - 6 - 7of road sector decision making. C - - 8 - - 8

D - - - 5 2 7E - - - 6 - 6

F - - 4 - - 4Total 0 1 1 2 2 4 2 3 9

Donors & - 1 1 1 1 2 1 5Consultants

5. It is essential to make road sector A - - - 7 - 7information easily available to B - - - 7 - 7all stakeholders. C - - 1 7 - 8

D - - - 4 3 7E - - - 1 5 6F - - - 3 1 4

Total 0 0 1 2 9 9 3 9Donors & - - - 2 1 3 1 5

Consultants6. Arrangements are needed for A - - - 7 - 7

“rapid response” consultancies B - - - 7 - 7making short-term inputs “on C - - 8 - - 8demand.” D - - - 7 - 7

E 1 - - 5 - 6F - - - 4 - 4

Total 1 0 8 3 0 0 3 9Donors & - - 3 9 3 1 5

Consultants7. Arrangements are needed to improve A - - - 7 - 7

international exchange of knowledge B - - - 6 1 7between road stakeholders C - - - 8 - 8(road users, government, others). D - - - 6 1 7

E - - - 5 1 6F - - - 4 - 4

Total 0 0 0 3 6 3 3 9Donors & - - - 1 1 5 1 6

Consultants8. Lending agency requirements A - - - 7 - 7

(e.g., special administrative B - - 5 2 - 7procedures) adversely distort C - 2 6 - - 8local decision-making processes. D - - 2 5 - 7

E - - - 6 - 6F - 1 2 1 - 4

Total 0 3 1 5 2 1 0 3 9Donors & - 4 3 7 2 1 6

Consultants



9. In the long term, lending agencies A - - - 7 - 7should trust local decision-making B - - - 7 - 7processes (that have been subject C 2 - - 1 5 8to independent audit). D - - - 7 - 7

E - - 1 5 - 6F - - - 4 - 4

TOTAL 2 0 1 3 1 5 3 9Donors & - 1 1 1 0 4 1 6

ConsultantsPoints Made:Group A1. Political will.2. Support of road users in general through

participatory initiatives.3. Legal coverage for effective

implementation.4. Institutional reforms in concerned agency.Group C1. Arrangements should be made to consult 8

all stakeholders in driving the reform in theroad sector.

2. In an effort to undertake reform in the 8road sector, lending agencies should help todevelop local capacity to sustain the reform.

Group D1. Review and improvement of procurement 7

guidelines and procedures is needed (fundingagencies and recipients).

2. Joint initiative should come from ministry offinance and concerned departments. 7


1. References Grouped byGeographic Area or Country

a. Selected ADB DevelopingMember Countries: Asia andthe Pacific

i. Bangladesh

Government of the People’s Republic of Bangladesh, Minis-try of Communications, Roads and Railways Division.2000. A New Approach to Road Maintenance by the Roadsand Highways Department. Dhaka.

Asian Development Bank (ADB). 1996. Third Road Improve-ment. Manila.

ii. Cambodia

ADB. 1996. Technical Assistance for Transport NetworkImprovement. Manila.

———. 1999. Strengthening Maintenance Planning and Man-agement Capabilities of Ministry of Public Works and Trans-port. Manila.

iii. People’s Republic of China

ADB. 1994. Heilongjiang and Yunnan Expressway Project.Manila.

———. 1996. Chongqing Expressway Project. Manila.———. 2000. TA 3086-People’s Republic of China:

Regional Road Sector Study: Impact of Fuel Tax on ProvincialRoad Sector Finance. Draft Final Report, Prepared bySymonds Group Ltd., School of Oriental and AfricanStudies, and Chelbi Engineering Consultants, Inc.Manila.

iv. Fiji Islands

ADB. 1995. Technical Assistance to Fiji for Transport Sector Insti-tutional Strengthening. Manila.

———. 1995. Third Road Upgrading. Manila.———. 1997. Road Sector Reform and Safety Improvement.

Manila.Government of Fiji Islands. Ministry of Finance. 1997.

Funding Better Road Maintenance. Final Report, Preparedunder TA 2746-FIJ: Road Sector Cost Recovery Im-provement. Fiji Islands.

v. India

ADB. 1993. Road Safety. Manila.Government of India. Ministry of Surface Transport. 1999.

Available: http://www.nhai.org/newsPrime Minister’s Task Force on Infrastructure. 1999. Report

to the Task Force on Infrastructure by the Working Group onthe Use of Dedicated Cess Revenue for NHDP. New Delhi.

World Bank. 1999a. Dedicated Road Fund Boards in India.Reference: APMI/AM94/5.10. Available:[email protected]

———. 1999b. Highlights of Discussion of the Video Conferenceon Road Funds and Tolls, with participation of offices fromWashington, New Delhi, Islamabad, Kathmandu. NewDelhi.

vi. Kazakhstan

ADB. 1995. Technical Assistance to Kazakhstan for the Prepara-tion of Road Rehabilitation Program. Manila.

———. 1996. Rural Rehabilitation Project. Manila.

vii. Kyrgyz Republic

ADB. 1996. Road Rehabilitation Project. Manila.———. 1997. IETC Manager-Letter to PARECO on TA

3065-Kyrgyz Policy Support in the Transport Sector.Comments on draft final report from the ExecutingAgency (MOTC) and ADB. Manila.

Appendix 5. Bibliography


———. 1997. TA 2587-KGZ: Institutional Strengthening ofthe Road Sector. Project Final Report, Prepared byFINNRA. Manila.

———. 1998. Policy Support in the Transport Sector. Manila.———. 1998. Second Road Rehabilitation Project. Manila.———. 1999. TA 3065-KGZ: Policy Support in the Transport

Sector. Interim Report No. 2, Prepared by PADECOCo., Ltd. Manila.

Fichtner. No date. Second Road Rehabilitation Project. Bishkek-Osh Road Contract 1. Road Characteristics (Length,Height, Difference, Slope, Costs and Cost/km).

Government of the Kyrgyz Republic. 1997. Draft Decree onAmendments to the Decree of the Government of theKyrgyz Republic of 14 October 1997–588. On Measuresfor Implementation of the Law of the Kyrgyz Republic onAutomobile Roads.

———. 1998. The Road Fund Act. Kyrgyz Republic.World Bank. 2000. Project Appraisal Document on a Proposed

Credit in the amount of $22.0 million for Krygyz UrbanTransport Project. Report No. 20456-KG, InfrastructureSector Unit. Country Unit for Kyrgyz, ReferenceEurope and Central Asia Regional Office.

viii. Lao People’s Democratic Republic

ADB. 2000. Final Memorandum of Understanding of thePre-appraisal Mission for Rural Access Roads Project.Manila.

Government of Lao PDR. 1998. (Unsigned) Memo fromMinister of MCTPC to Cabinet of Lao PDR.

———. 2000. Macroeconomic Policy and Reform Framework.Discussion Paper prepared for the Policy DialogueMeeting in the context of the Roundtable Process 2000–2002. 31 August.

———. 2000. Strategic Directions for the Development of theRoad Sector. Paper for the Preparatory Roundtable Meet-ing.

Gwilliam, K. M. 1998a. A World Bank View on Road Funds inLaos. Washington, D.C. World Bank.

———. 1998b. Comments on the Proposal to Establish a RoadFund in Lao PDR. Washington, D.C.: World Bank.

Ministry of Communications, Transport, Post and Construc-tion, Department of Roads. 2000. Ten-Year PeriodicMaintenance Program. Vientiane.

Robinson, Richard. 1999. Establishment of a Road MaintenanceFund. Final Report (Issue 3) submitted to Lao PDRMinistry of Communication, Transport, Post and Con-struction. United Kingdom.

———. 1999. Policy Workshop on the Establishment of a RoadMaintenance Fund in Lao PDR. Lao PDR, 23–24 June.

———. 2000. Road Maintenance Fund Operational ProceduresDraft Report. Vientiane.

World Bank. 2000. Proposed Road Maintenance ProgramAide-Memoire of the Pre-Appraisal Mission FinalVersion 14 April. Vientiane.

———. 1997. Lao PDR Public Expenditure Review: ImprovingEfficiency and Equity in Spending Priorities. Report No.16094-LA, Country Operations Division, CountryDepartment 1. East Asia and Pacific Regional Office.

ix. Marshall Islands

ADB. 1998. TA 2756-RMI: Institutional Strengthening of theTransport Sector. Volume 4: Roads Trust Fund, Funding BetterRoad Maintenance. ADB Final Report prepared by W. D.Scott International Development Consultants Pty Lim-ited. Manila.

x. Mongolia

ADB. 1995. Loan 26070- MON: Road Development Pro-gram. Manila.

———. 1999. Loan MON 29566-MON: Second RoadsDevelopment Project. Manila.

———. 2000. TA 3268-MON: Policy Support in the RoadSector Project. Inception Report prepared by SheladiaAssociates, Inc. and Transportation and EconomicResearch Associates, Inc. Manila.

xi. Nepal

Government of Nepal. 1996. Road Costs in Nepal Master Planfor the Strategic Road Network and Rural Transport. DraftFinal Report Volume 3. Prepared by Wilbur SmithAssociates and SMEC. Kathmandu.

———. 1999. A Bill to Make Provision for Establishmentand Operation of Road Board. Presented by Cabinet tothe Parliament on 24 January 2000. Kathmandu.

Chalise, N.P. 1999. The Introduction of a Road Fund in Nepal.Paper presented to the Country Workshop on RoadFinancing and Management, 18–19 June. Colombo, SriLanka.

Highway Management Information System Newsletter Nos. 11,12 and, 14. Available: http://www.dorhmis.gov.np

Khanal, Ananda Prasad. 1999. Report of Seminar on SeniorRoad Executives Program on Road Fund Management andFinancing. University of Birmingham, United Kingdom.

xii. Pakistan

ADB. 1994. Management Orientation Maintenance ManagementSystem. Volumes 1–3 prepared by FINNRA, Finland inassociation with Progressive Consultants (Pvt) Ltd.Islamabad, Pakistan.

———. 1994. Sukkur Bridge Project. Manila.———. 2000. Loan 185-PAK(SF): Road Management

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Imdad, Naghma. 1998. Final Report on the National RoadUsers Workshop. Islamabad.

National Highway Authority. 1997. Final Recommendations onthe Proposal to Improve Road Maintenance Management andFinancing Country Workshop on Dedicated Highway Main-tenance Fund. Islamabad.

———. 1997. Proceedings of the Country Workshop on DedicatedHighway Maintenance Fund. Islamabad, Pakistan, 28–30April.

———. 1998. Pakistan Road Fund Study. Final Report pre-pared by Wilbur Smith Associates in association withRepublic Engineering Corp. Islamabad.

———. 1998. Road User Charges Study. Final Report pre-pared by Wilbur Smith Associates in association withRepublic Engineering Corp. Islamabad.

———. 2000. National Highway Improvement Program.Power point presentation. Islamabad.

———. 2000. Road Asset Management Directorate. Presenta-tion materials. Islamabad.

———. 2000. Road Asset Management System Flow of Activi-ties. Islamabad.

National Transport Research Center. 2000. The NationalTransport Research Center Bulletin. Islamabad.

Punjab Communications and Works Department. 2000.Comparative Statement of yardstick for the maintenanceof roads 1999-2000 (per km. of 10’ width). Karachi.

———. 2000. Treatment Rules—The Appropriate Actions andLimits on the Work Items According to Justified InvestmentCategory. Karachi.

———. 2000. Treatment Rules—Levels of Routine/ReactiveMaintenance Intervention that is Justified According to Peri-odic Maintenance Anticipated, Works and Timing; Type ofHDM/MMS Intervention and Treatment. Karachi.

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xiii. Papua New Guinea

ADB. 1998. Road Asset Management System. Manila.———. 1999. Road Sector Cost Recovery Improvement.

Manila.———. 1999. TA 3191-PNG: Road Sector Cost Recovery

Improvement. Inception Report and Workshop BriefingPaper. Prepared by W. D. Scott International Develop-ment Consultants. Manila.

———. 2000. TA 3191-PNG: Road Sector Cost RecoveryImprovement. Draft Final Report prepared by W. D.Scott International Development Consultants. Manila.

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———. 2000. Summary Workshop Proceedings on RoadManagement and Finance. 28-29 February. PortMoresby.

Jhala, Raymond (Chairman, National Roads Board of Zam-bia). 2000. Involvement of Road Users in the Managementof Roads. Paper presented during the Papua New GuineaRoad Management and Finance Workshop. February.

Kerali, Henry (University of Birmingham, U.K.). 2000.International Experience with Road Funds. Paper presentedduring the Papua New Guinea Road Management andFinance Workshop. February.

Lupari, Isaac (Acting Secretary Department of Works andImplementation, Papua New Guinea). 2000. Problemsand Issues related to Road Management and Finance inPNG. Paper presented during the Papua New GuineaRoad Management and Finance Workshop. February.

Odams, Robin (Regional State Highway Manager, TransitNew Zealand). 2000. Commercializing Management ofRoads in New Zealand. New Zealand. Paper presentedduring the Papua New Guinea Road Management andFinance Workshop. February.

———. 2000. Management of the National Roads Fund in NewZealand. Paper presented during the Papua New GuineaRoad Management and Finance Workshop. February.

———. 2000. Performance Specified Maintenance Contracts.New Zealand. Paper presented during the Papua NewGuinea Road Management and Finance Workshop.February.

Pinard, M. (Former Director of Roads, Botswana). Restruc-turing Road Management and Finance in Southern Africa.Paper presented during the Papua New Guinea RoadManagement and Finance Workshop. February.

Rahmatullah, Dr., and Dieter Niemann. 2000. Setting upCommercially Managed Road Funds in Asia. Paper pre-sented during the Papua New Guinea Road Manage-ment and Finance Workshop. February.

Tauvasa, Joe. 2000. Reformation of Maintenance and Funding ofPNG Roads—A View from the Private Sector. Paper pre-sented during the Papua New Guinea Road Manage-ment and Finance Workshop. February.

University of Birmingham. 2000. International Trends inRestructuring Road Management. Paper presented duringthe Papua New Guinea Road Management and FinanceWorkshop. February.

xiv. Philippines

ADB. 1995. An Overview of Institutional Issues and Recommen-dations for the Future Development of Planning and Mainte-nance Procedures within the Department of Public Works andHighways. Prepared by the Highway Planning andMaintenance Specialist under assignment to the TA


2314-PHI: Sixth Roads. Manila.———. 1996. Sixth Roads. Manila.———. 1995. TA to the Philippines for Preparation of a

National Transport Strategy. Manila.Allport, Roger, Geoff Key, and Charles Melhuish. 1998. A

New Approach to Setting the Future Transport Agenda. ADBOccasional Paper No. 16. Manila: Asian DevelopmentBank.

Department of Public Works and Highways. 1997, 1998.Comparison of Pavement Ratio for 1997 and 1998. Manila.

———. 1999. Existing National Roads and Bridges, as ofDecember 1999. Manila.

———. 1999. Existing Local Roads by Province, as of Decem-ber 1999. Manila.

———. 2000. Memorandum for the President on Road User’sCharge. Manila. 23 June.

———. 2000. Republic Act No. 8794. 2000. Motor VehiclesUser’s Charge on Owners of all types of Motor Vehicles andfor Other Purposes. Manila.

———. Undated. Description of Basic Maintenance and Main-tenance and Management of National Highways. Manila.

———. Undated. Percent of Overloading Vehicles. Manila.———. Undated. Draft Act Imposing a Motor Vehicle

User’s Charge on Owners of all types of Motor Vehiclesand for Other Purposes. Manila.

National Economic and Development Authority. 1999.Medium-Term Philippine Development Plan 1999-2004.Chapter 5: Infrastructure Development. Manila.

———. 2000. Legislative and Executive DevelopmentAdvisory Council. Press Release of Rep. Joey Salceda onthe Non-Passage of the Road Users’ Tax. Manila.

World Bank. 1999. Better Roads Philippines. Draft FinalReport prepared by Scott Wilson Kirkpatrick and Co.Ltd in association with Cesar Virata & Associates, Inc.Washington, D.C.

———. 2000. Local Road Study: Final Report. Prepared byDessau Soprin International Inc. Manila.

———. 2000. Project Appraisal Document on a ProposedLoan US$150 Million: First National Roads Improve-ment/Management Project, Phase I of the NationalRoads Improvement and Management Program. ReportNo. 19754-PHI. Transport Sector Unit—East Asia andPacific Region. Washington, D.C.

———. 2000. The Republic of the Philippines TransportSector Update: Updating the Transport Sector Assis-tance Strategy Note of 30 June 1998. Transport SectorUnit-East Asia and Pacific Region. Washington, D.C.

———. 2000. The World Bank Assistance Program in thePhilippines: Fighting Poverty for Lasting Results; Projects inProgress; Projects in the Pipeline as of 31 July 2000.Manila.

xv. Sri Lanka

ADB. 1995. Technical Assistance to Sri Lanka for SouthernProvincial Road Improvement Project. Manila.

———. 1997. Second Provincial Roads Improvement. Manila.Government of Sri Lanka. 1999. Draft National Highways

Act. Sri Lanka.———. 1999. Documents/Papers Presented during the

Workshop on Public/Private Partnership in Road Man-agement and its Financing, 18–19 June. Colombo.:Abeywickrema, R. (Former Chairman, Charterred Insti-

tute of Transport, Sri Lanka). User Views on RoadManagement and its Financing. Chartered Institute ofTransport.

Amoah, Kingsford (Director, Ghana Road Fund). 1999.Restructuring the Ghana Fund into a CommerciallyManaged Road Fund Administration.

Bates, David (Assistant Regional Manager, Transit NewZealand). 1999. Commercialization of Road SectorManagement in New Zealand.

Chalise, Niranjan Prasad (Director General, Ministry ofWorks and Transport, His Majesty’s Governmentof Nepal). 1999. The Introduction of a Road Fund inNepal and Efforts to Improve the Road Safety Situationin Nepal.

Fernando, Kingsley (Sri Lanka Road DevelopmentAuthority). 1999. Issues of Road Management and itsFinancing for the National Highway Network. RoadDevelopment Authority.

Gananadha, N. (Executive Secretary, National RoadBoard, Zambia). 1999. Designing a Road Fund thatWorks: the Zambian Experience.

Gaviria, Guillermo (Former Executive Director,INVIAS, Colombia). 1999. Road MaintenanceConcessions in Colombia.

Heggie, Ian (World Bank Roads Adviser). 1999. Nodate. Brief Introduction to Road Maintenance Conces-sions.

———. 1999. Brief Overview on International Trends inRoad Sector Restructuring. World Bank Roads Advisor.Washington D.C.: World Bank.

———. 1999. Road Sector Financing: World Wide Experi-ence. Washington D.C.: World Bank.

Tomlie, Neil (Regional Manager, National Roads Au-thority, South Africa). 1999. Toll Roads and Conces-sions in South Africa.

Wijentunga, A. (Senior Assistant Secretary, Ministry ofProvincial Councils, Sri Lanka). 1999. Issues of RoadManagement and its Financing for Provincial and LocalRoads.

xvi. Uzbekistan

ADB. 1996. Road Rehabilitation. Manila.———. 1998. Institutional Strengthening and Policy Support to

the Road Sector. Manila.———. 1999. TA 3118-UZB: Uzbekistan Road Sector Insti-

tutional Strengthening and Policy Support Project. InterimReport I, Volume 1, Chapters 1-3. Prepared byPADECO Co. Ltd. Manila.

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xvii.Viet Nam

ADB. 1996. Third Road Improvement Project. Manila.———. 1999. Country Economic Report. Manila.Bau, Nguyen Quang (Director, Transport Development and

Strategy Institute, Ministry of Transport, Viet Nam).2000. Proposed Project on Establishment of the Viet NamRoad Maintenance and Development Fund. Documentpresented at the International Workshop on Road Man-agement and the Establishment of a Maintenance andDevelopment Fund. 4–5 May. Hanoi.

Booz-Allen and Hamilton, Inc. 2000. Report Appendix: DraftMatrix for Review of Ministry of Transport Road FundProposal based on Comparison with Global Experience.Hanoi. Flow Charts:Applied Research Project Process Flow Diagram.

Hanoi.Financial Management, Investment Execution and

Periodic C-Level Construction Flow Diagram;Financial Management Administration and BudgetExecution Flow Diagram. Hanoi.

Periodic Maintenance and C-Level Construction Plan-ning Process Flow Diagram. Hanoi.

Periodic Maintenance and C-Level Construction ProjectManagement Flow Diagram. Hanoi.

Right-of-Way Inspection and Management ProcessFlow Diagram; Transport Statistics Flow Diagram;Driver’s License Management Process FlowDiagram; Road/Ferry Toll Collection ManagementProcess Flow; Human Resources System FlowDiagram. Hanoi.

Road and Bridge Inspection Management Process FlowDiagram. Hanoi.

Routine Maintenance Planning Process Flow Diagram.Hanoi.

Traffic Counting Management Process Flow Diagram;Rehabilitation and New Construction FlowDiagram Process. Hanoi.

Transport Vehicle Weight Management Flow Diagram.Flow chart. Hanoi.

Department for International Development. 1998a. Viet NamCountry Strategy Paper. London.

———. 1998. Technical Assistance to the Ministry of Transportfor Rural Transport II Project. Hanoi.

———, and Ministry of Transport, Socialist Republic ofViet Nam. 2000. Rural Transport Strategy Study: DraftSynthesis of Strategy Study Findings. I.T. Transport Ltd. inassociation with Transport Development and StrategyInstitute, Hanoi Water Resources University. Hanoi.

Duan, Dinh Cong (Director, Nam Dinh Provincial TransportDepartment, Viet Nam). 2000. Management andEstablishment of its Provincial Road Maintenance and RoadDevelopment Fund. Document presented at the Interna-tional Workshop on Road Management and the Estab-lishment of a Maintenance and Development Fund. 4–5

May. Hanoi.Dung, Vu Anh (Vice Director General, Training and Mem-

bership Department viet Nam Chamber of Commerceand Industry). 2000. Does the Current Condition of theRoad Network Impede Business in Viet Nam? Documentpresented at the International Workshop on Road Man-agement and the Establishment of a Maintenance andDevelopment Fund. 4–5 May. Hanoi.

Frost, Malcolm (Former Director of Road Transport Author-ity, New South Wales, Australia). 2000. Long-Term, Area-Wide, Performance-based Maintenance Contracts in Australia.NSW, Australia: Road Transport Authority. Documentpresented at the International Workshop on Road Man-agement and the Establishment of a Maintenance andDevelopment Fund. 4–5 May. Hanoi.

Heggie, Ian (World Bank Roads Advisder). 2000a. BriefOverview of International Trends in Management of RoadMaintenance. Document presented at the InternationalWorkshop on Road Management and the Establishmentof a Maintenance and Development Fund. 4–5 May.Hanoi.

———. 2000b. Road Sector Financing: World Wide Experience.Washington DC: World Bank.

Hirai, Setsuo (Ministry of Construction, Japan). 2000. Man-agement of the Japan Road Improvement Special Account.Document presented at the International Workshop onRoad Management and the Establishment of a Mainte-nance and Development Fund. 4–5 May. Hanoi.

Huu Tho, Nguyen (Viet Nam Road Transport Association).2000. Impact of Road Conditions on the Road TransportIndustry. Viet Nam: Road Transport Association. Documentpresented at the International Workshop on Road Man-agement and the Establishment of a Maintenance andDevelopment Fund. 4–5 May. Hanoi.

Japan Bank for International Cooperation. 2000. JBIC Over-seas Development Assistance Projects in Viet Nam. Hanoi.

Japan International Cooperation Agency. 1999. JICA in VietNam. Hanoi.

———, and Ministry of Transport, Socialist Republic ofViet Nam. 1999. The Study on the National TransportDevelopment Strategy in the Socialist Republic of Viet Nam.Interim Report Summary prepared by Almec Corp.andPacific Consultants International. Hanoi.

Jhala, Raymond (Chairman, Zambia National Roads Board).2000. Involving Road Users in Management and Financingof Roads. Document presented at the International Work-shop on Road Management and the Establishment of aMaintenance and Development Fund. 4–5 May. Hanoi.

Khoa, Thieu Dang (Vice Chairman, Viet Nam Road Admin-istration). 2000. Problems and Issues Relating to Manage-ment and Financing of Road Maintenance in VietNam.Vietnam: Road Administration. Document presentedat the International Workshop on Road Managementand the Establishment of a Maintenance and Develop-ment Fund. 4–5 May. Hanoi.


Millers, Vilnus (Head, Latvian State Road Fund). 2000.Management of the Latvian State Road Fund. Documentpresented at the International Workshop on Road Man-agement and the Establishment of a Maintenance andDevelopment Fund. 4–5 May. Hanoi.

Niemann, Dieter (Senior Transport Special, UNESCAP).2000. Review of Initiatives in Asia to Improve Financing ofRoad Maintenance. Document presented at the Interna-tional Workshop on Road Management and the Estab-lishment of a Maintenance and Development Fund. 4–5May. Hanoi.

Pholsena, Sommad (Director General of Roads Department,Ministry of Communications, Transport, Post and Con-struction). 2000. Establishing a Commercially ManagedRoad Fund in Lao PDR. Document presented at theInternational Workshop on Road Management and theEstablishment of a Maintenance and DevelopmentFund. 4–5 May. Hanoi.

Pinard, Michael (Former Director of Roads, Botswana).2000. Appropriate Maintenance Management Systems.Document presented at the International Workshop onRoad Management and the Establishment of a Mainte-nance and Development Fund. 4–5 May. Hanoi.

Rendell, David (Regional Manager, Transit New Zealand).2000. Contracting Out Maintenance in New Zealand: Why,How and with What Effect. Document presented at theInternational Workshop on Road Management and theEstablishment of a Maintenance and DevelopmentFund. 4–5 May. Hanoi.

Viet Nam Road Administration. 2000. The Maintenance FundOrganization Flowchart and the Road Management Organi-zational Chart. Hanoi.

World Bank. 1999a. Viet Nam Moving Forward: Achievementsand Challenges in the Transport Sector. East Asia andPacific Regional Office. Washington, D.C.

———. WB1999b. Viet Nam Preparing for Take Off? HowViet Nam can Participate Fully in the East Asian Recovery—An Informal Economic Report of the World Bank Consulta-tive Group Meeting for Viet Nam. Hanoi.

———. WB2000. World Bank in Viet Nam: A Progress Reporton the Country Assistance Strategy of the World Bank Group1999-2002. World Bank Country Management Unit,East Asia and the Pacific Region. Hanoi.

b. Other Countries of Asia andthe Pacific

i. Australia

Frost, Malcolm and Christine Lithgow. 1996. ImprovingQuality and Cutting Costs Through Performance Contracts:Australian Experience. Paper presented at the RoadManagement Training seminar, Washington, D.C.,17–18 December. Available: http://www.rta.nsw.gov.au/frost.htm (Accessed 17 May 2000).

Luk, James, and Edward Chung. 1997. Public Acceptance andTechnologies for Road Pricing. Research Report ARR 307,ARRB Transport Research Ltd. Canberra.

Harvey, Mark. 1999. Road Pricing and Cost Recovery: AnEconomic Viewpoint. Paper presented (and power pointpresentation) at the Road Funding, Pricing and TaxationSeminar. Adelaide. September 1998. Bureau of Trans-port Economics. Canberra.

ii. Japan

Ministry of Communications. Undated. Financing RoadImprovement and the Toll Road System. Available: http://www.moc.go.jp/road/road-e/index_e_html.

———. Undated. General Description of Road Administration.Available: http://www.moc.go.jp/road/road-e/index_e_html.

———. Undated. Organization of the Road Bureau. Available:http://www.moc.go.jp/road/road-e/index_e_html.

———. Undated. Road Environment. Available: http://www.moc.go.jp/road/roade/index_e_html.

———. Standard of Road Improvement. Available: http://www.moc.go.jp/road/road-e/index_e_html

World Bank and Japan Ministry of Construction. 1999.Review of Recent Toll Road Experience in Selected Countries.Report prepared for the seminar on Asian Toll RoadDevelopment in an Era of Financial Crisis. Tokyo Inter-national Forum. Tokyo, Japan, 9–11 March. Preparedby PADECO Co., Ltd., with Highway Planning, Inc.,and Value Management Institute, Inc.Case Studies:Argentina: Toll Concessions for Maintenance, Rehabilitation

and ConstructionBrazil: Infrastructure Priorities Uncertain in Wake of Eco-

nomic CrisisChile: Mobilization of the Private Sector for Modernization

of the Road SectorChina: Emergence of a New Policy Framework with Support

from the World BankColombia: The World Bank-assisted Toll Road Concession

ProjectFrance: A Process of Trial and ErrorHong Kong SAR: An Ideal Toll Adjustment Mechanism At

Last?Hungary: Toward Public-Private Partnerships?Indonesia: Coping with Political and Financial CrisesItaly: Toll Motorway Development Through Semi-Public

ConcessionairesJapan: Expressway Network Development through Public

CorporationsMalaysia: Public-Private Partnerships in an “Asian Way”Mexico: The Rapid Rise (and Fall) of Private Toll Road

DevelopmentPhilippines: Model Legislation with Mixed ImplementationSpain: A Revival of Toll Road Concessions

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Thailand: Weak Inter-agency Coordination and DelayedImplementation

United Kingdom: Structured Experiments in Public-PrivatePartnerships

United States: Reluctance to Toll in the Land of the Free(Ride)

iii. New Zealand

Dunlop, Robin J. 1998. Road Agency Management. Wellington,New Zealand.

———. 1999. Roading Agency of the Future. Wellington, NewZealand.

Fletcher, M. F., and D. R. Rendall. 1997. Management of NewZealand’s National Road Fund. Paper presented duringthe Philippines Country-Level Workshop on Institu-tional Development for the Maintenance of NationalRoad Networks, Tagaytay, Philippines, 30 May.

Rendall, D. R., and M. F. Fletcher. 1997. Management of NewZealand’s National Road Funds. Paper Presented duringthe Philippines Country-level Workshop on InstitutionalDevelopment for the Maintenance of National RoadNetworks. Wellington: Transit New Zealand.

Roading Advisory Group. 1997. Road Reform: The Way For-ward. Final report submitted to the New Zealand Gov-ernment. Wellington.

———. 1998. New Zealand Road Funder – Provider Split andRestructuring Proposals. Presented to the World Bank byTransfund. Wellington.

c. Africa

i. General

Coetzee, Sandra J. H. 1999. SAD Model Legislative Provisionson Road Network Management and Financing. AfricaTransport Technical Note No. 23, SSATP. Washington,D.C.: World Bank.

———. 1999. SADC Road Sector: A Holistic Approach toPolicy and Legal Reform. Africa Transport Technical NoteNo. 24, SSATP. Washington, D.C.: World Bank.

De Richecour, Anne B., and Ian G. Heggie. 1995. AfricanRoad Funds: What Works and Why? Working Paper 14,SSATP, Africa Technical Department. Washington,D.C.: World Bank.

Geraldes. Pedro. 1996. Road Sector Reform. Best Practice inAfrica. Powerpoint presentation. Washington, D.C.:World Bank.

———. 1997. Establishing and Adequate and Stable Flow ofFunds: African Best Practice. Power point presentation.Washington, D.C.: World Bank.

Heggie, Ian G. 1994. Commercializing Africa’s Roads: Trans-forming the Role of the Public Sector. Working Paper 10,SSATP, Africa Technical Department. Washington,D.C.: World Bank.

Jhala, Raymond. 1998. Involvement of Road Users in the Man-agement of Roads: PPP: The Zambian Roads Board Experi-ence. Paper presented at the Workshop on RoadManagement and Finance. Kingston, Jamaica, 3–4 June.

Metschies, Gerhard, and E. Rausch. 2000. Financing RoadMaintenance in West Africa. Eschborn, Germany: GTZ.

Ojala, Lauri, and Esko Sirvio. 1998. Restructuring HighwayAgencies. The FinnRA Case: Options for Africa? AfricaTransport Technical Note No. 15, SSATP. Washington,D.C.: World Bank.

Rausch, Eugene. 1994. Road Contractor Promotion andEmployment Generation in Africa. Eschborn, Germany:GTZ.

Sylte, Ole Kr., et al. 1999. Commercialization of Road Manage-ment in Sub-Saharan African Countries. Appraisal of theRMI Concepts Implementation. Africa Transport Tech-nical Note No. 25, SSATP. Washington, D.C.: WorldBank.

———. 1999. Improving Management and Financing of Roadsin Central African States. Review of the Road Sector inMember Countries of the Customs and EconomicUnion of Central African States. Africa Transport Tech-nical Note No. 22, SSATP. Washington, D.C.: WorldBank.

———. 1999. Improving Management and Financing of Roadsin Sub-Saharan Africa Summary Review for 47 SSACountries. Africa Transport Technical Note No. 26,SSATP. Washington, D.C.: World Bank.

Talvitie, Antti. 1999. Road Sector Performance Indicators forAfrican Countries. Africa Transport Technical Note No.17, SSATP. Washington, D.C.: World Bank.

Triche, Thelma. 1996. Road Policy Reform in Sub-SaharanAfrica 1991–1995. SSATP Working Paper No. 25. Sub-Saharan Africa Transport Policy Program, World Bankand Economic Commission for Africa. WashingtonD.C.: World Bank.

Wetteland, Thor E. 1999. An Overview of the RMI Agenda forReform and Current Status of Implementation. Paper pre-sented at the National Roads Board Workshop on theRole and Operations of Road Boards. Lusaka, Zambia,28–30 April.

World Bank and Economic Commission for Africa. Road Mainte-nance Commercialization. The Strategic Game . SSTAPWorking Paper No. 20. Available: http://www.worldbank.org/afr/ssatp

World Bank. 1998. Findings: Road Sector Reform in BurkinaFaso and Ghana: Impact and Lessons. Africa Region. No.104. Available: http://www.worldbank.org/afr/findings/english/find104.htm.

———. Progress Report for the year 1998. SSTAP WorkingPaper No. 44. Available: http://www.worldbank.org/afr/ssatp.

Zietlow, Gunter. 1998. Cutting Cost and Improving Qualitythrough Performance Specified Road Maintenance Contracts:Latin American Experience and its Relevance for Africa.


Technical Note No. 14, SSATP, Africa TechnicalDepartment, World Bank and Economic Commissionfor Africa. Washington D.C.: World Bank.

ii. Malawi

Government of Malawi. 1997. Malawi Roads Authority Actof 1997. Blantyre.

iii. South Africa

Government of South Africa. 1988. South African RoadsBoard Act No. 74. As amended by National RoadsGeneral Amendment Act, No. 27 of 1994; and NationalRoads Amendment Act, No. 15 of 1996. Pretoria.

———. 1995. South African Road Board Amendment ActNo. 15 of 1995. Pretoria.

iv. Zambia

Gananadha, N. 1997. The National Road Board Case Study.Prepared for the International Workshop on RuralInfrastructure, Washington, D.C., 19-23 May. Washing-ton, D.C.: World Bank.

Jhala, Raymond. 1998. Involvement of Road Users in the Man-agement of Roads Public-Private Partnership: The ZambiaRoads Board Experience. Paper presented during theWorkshop on Road Management and Finance,Kingston, Jamaica, 3–4 June.

National Road Board. 1999. National Program of RoadMaintenance. Available: http://www.nrb.org.zm/NPRM_99.html

———. 2000a. Impact of ROADSIP. Available: http://www.nrb.org.zm

———. 2000b. Payment Process. Available: http://www.nrb.org.zm/payment_process.html

———. 2000c. Plan Implementation Process. Available: http://www.nrb.org.zm/PIP.html

———. 2000d. Planning Process. Available: http://www.nrb.org.zm/planning.html

———. 2000e. Policy Guidelines on Road Fund. Available:http://www.nrb.org.zm/budget.html

———. 2000f. Profile of NRB. Available: http://www.nrb.org.zm/profile.html

———. 2000g. Road Sector Investment Program (ROADSIP).Available: http://www.nrb.org.zm

———. 2000h. Sustainable Road Maintenance in Zambia.Available: http://www.nrb.org.zm

d. Europe and Middle East

Isotalo, Jukka. 1995. Development of Good Governance in theRoad Sector in Finland. Working Paper 21, SSATP, Africa

Technical Department. Washington, D.C.: World Bank.Hashemite Kingdom of Jordan. Draft National Road Main-

tenance Fund Administration Bill. Amman.

e. Latin America

Zietlow, Gunter. 1998. Cutting Cost and Improving Qualitythrough Performance Specified Road Maintenance Contracts:Latin American Experience and its Relevance for Africa.Technical Note No. 14, SSATP, Africa TechnicalDepartment, World Bank and Economic Commissionfor Africa. Washington D.C.: World Bank.

———. 1999. Reform of Financing and Management of RoadMaintenance: A New Generation of Road Funds in LatinAmerica. Paper presented to the XXIst World RoadCongress, Kuala Lumpur, Malaysia, 3–9 October.

———, and Alberto Bull. 1999. Performance-specified RoadMaintenance Contracts—The Road to the Future: The LatinAmerican Perspective. Paper presented to the XXIstWorld Road Congress, Kuala Lumpur, Malaysia, 3–9October.

f. United States

The Highway Trust Fund. 1999. Primer on the Highway TrustFund. Federal Highway Administration Office of PolicyDevelopment. Available: http://fhinter.fhwa.dot.gov/pubstats.html

2. References Grouped byOrganization

a. Asian Development Bank

ADB. 1980. Technical Assistance for a Regional Seminar on RoadMaintenance. Manila.

———. 1998. SST: REG 98014: Special Evaluation Studyon the Operation and Maintenance of Road Facilitiesand their Impact on Project Sustainability (China, Fiji,Lao PDR, Nepal and Thailand). Manila.

b. Deutsche Gesellschaft fürTechnische Zusammenarbeit(German Agency for Technical Co-operation, GTZ)

Metschies, Gerhard. 1999. Fuel Prices and Taxation, withcomparative tables for 160 countries, Pricing Policies forDiesel Fuel and Gasoline in Developing Countries and GlobalMotorization Data. Eschborn, Germany: GTZ.

———. 1999. Rural Roads—A Market Approach with

Bibliography 109

Concepts for Finance and Organization. Eschborn, Germany:GTZ. Available: http://www.gtz.de.

Schiessler, Andreas, and Alberto Bull. 1994. Roads: A NewApproach for Road Network Management and Conservation.Santiago de Chile: GTZ and United Nations-EconomicCommission for Latin American and the Caribbean(UN-ELAC).

UN-ELAC, and GTZ. 2000. Technical Assistance Program ofthe Federal Republic of Germany for Latin American andCaribbean Countries in Road Conservation. InternationalRoad Federation. Available: http://www.zietlow.com.

Zietlow, Gunter J. 1997. Reform of Financing and Managementof Road Maintenance. Washington D.C.: GTZ

———. 1999. Innovative Financing of Road Maintenance.Powerpoint presentation made to ADB during the Semi-nar on Innovative Financing of Transport Projects,Manila, Philippines, 29 September–1 October.

c. International Monetary Fund

Potter, Barry. 1997. Dedicated Road Funds: A Preliminary Viewon a World Bank Initiative. IMF Paper on Policy Analysisand Assessment. Washington, D.C.: International Mon-etary Fund.

d. Permanent International Associationof Road Congresses (PIARC)

Permanent International Association of Road Congresses.2000. Appropriate Levels of Road Development. Preparedfor the XX1st World Road Congress. Kuala Lumpur,Malaysia, 3–9 October. Available: http://www.piarc.org/kl/xxi-min-e-htm.

———. 2000. Detailed Conclusions: Financing and EconomicEvaluation Innovations in Road Financing: Towards a RealPublic-Private Partnership. Prepared for the XX1stWorld Road Congress, Kuala Lumpur, Malaysia, 3–9October. Available: http://www.piarc.org/kl/xxi-c9-e-htm.

———. 2000. Detailed Conclusions of the Main Session onEffective Performance of the Road System. Prepared for theXX1st World Road Congress, Kuala Lumpur, Malaysia,3–9 October. Available: http://www.piarc.org/kl/xxii-kl5-e-htm.

———. 2000. Infrastructure and Transport in the XXIst Cen-tury. Ten essays from professionals selected for the 21st CenturyMinisters’ Session. Prepared for the XX1st World RoadCongress. Kuala Lumpur, Malaysia, 3-9 October.Available: http://www.piarch.org/pub/21-48-e.htm.

———. 2000. Performance of Road Administrators. Preparedfor the XX1st World Road Congress, Kuala Lumpur,Malaysia, 3–9 October. Available: http://www.piarc.org/kl/xxi-c15-e-htm.

———. 2000. Privatization of Infrastructure. Is Privatization ofRoad Infrastructure the Answer for Accelerated Road Develop-ment in the 21st Century? Prepared for the Ministers’Session. XX1st World Road Congress, Kuala Lumpur,Malaysia, 3–9 October. Available: http://www.piarch.org/kl/xxi-min-e-htm.

e. Road People Organization

Caraballo, Joaquin. 2000. Highway Maintenance Financing—A New Approach. Available: http://www.roadpeople.org.

———. 2000, 6 June. How to get the most out of internationalloans and local funds. Available: http://www.roadpeople.org.

———. 2000, 6 June. Who really cares about timely mainte-nance? Available: http://www.roadpeople.org.

f. Transport Research Laboratory(TRL) and Department forInternational Development(DFID, United Kingdom)

Department for International Development. 1999. FundingIssues for Low Volume Roads; Maintaining Low CostRural Roads Effectively; Getting to the Root of theProblem. Transport Issue No. 9. London. Available:http://www.trl.co.uk; http://www.dfid.gov.uk.

———. 1997. Community Participation in Road Maintenance:Why Are Some Community Road Maintenance SchemesEffective? TRL Newsletter No. 5. London. Available:http://www.trl.co.uk; http://www.dfid.gov.uk.

Morosiuk, G., A. Sterling, and S. Mahmud. 1999. RoughnessProgressions and Appropriate Maintenance Strategies forInter-Urban Roads in Indonesia. Paper presented at theXXIst Congress, PIARC, Kuala Lumpur, Malaysia,3–9 October. Available: http://www.trl.co.uk; http://www.dfid.gov.uk.

Parkman, Chris and Keith Madelin. 1999. A Review ofContract Maintenance for Roads. Paper presented dur-ing the XXIst Congress, Permanent International Asso-ciation of Road Congresses, Kuala Lumpur, Malaysia,3–9 October. Available: http://www.trl.co.uk; http://www.dfid.gov.uk.

PIARC/DFID. 1999. Save your Country’s Roads: How Main-tenance Gets Transport Moving. Available: http://www.trl.co.uk; http://www.dfid.gov.uk.

Robinson, Richard. 1987. A View of Road Maintenance Eco-nomics and Policy in the Third World. Paper presentedduring the IRF Executive Conference on the Manage-ment of Road Maintenance. Arizona, 11–27 February.Available: http://www.trl.co.uk; http://www.dfid.gov.uk.


———. 1988. A View of Road Maintenance Economics, Policy andManagement in Developing Countries. TRL Research Re-port 145. Crowthorne, United Kingdom. Available: http://www.trl.co.uk; http://www.dfid.gov.uk.

TRL Overseas Center and Overseas Development Adminis-tration. 1995. Costing Road Accidents in Developing Coun-tries. Overseas Road Note 10. Berkshire, London,United Kingdom. Available: http://www.trl.co.uk; http://www.dfid.gov.uk.

g. United Nations Economic and SocialCommission for Asia and the Pacific(UNESCAP)

United Nations Economic and Social Commission for Asiaand the Pacific. 1996. Management and Financing of RoadMaintenance. Report of the ESCAP/World Bank Semi-nar. New York: United Nations.

———. 1999. The Road Maintenance Initiative in Asia. Vol-ume 1—An Introduction and Background, Volume 2—An Approach and Strategies. Bangkok, Thailand.

ESCAP. 1996. Management and Financing of Road Mainte-nance. Report of ESCAP/World Bank Seminar,Bangkok, 17–20 September.

———. No date. Resolution 48/11 on Road and Rail Trans-port Modes in Relation to Facilitation Measures, Trans-port, Communications, Tourism and InfrastructureDevelopment. Land Transport Section. Available:www.unescap.org/tctd/reso4811

———. No date. Road Maintenance Initiative in Asia(Draft Reports in Two Volumes: An Introduction andBackground; An Approach and Strategies).

h. World Bank

i. Developing a Road Financing Plan

Bahl, Roy. 1992. Strengthening Administration of Road UserCharges in Developing Countries. Working Paper Series986. Washington D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

ii. Putting Roads on a Fee-for ServiceBasis

Heggie, Ian. 1998. Extracts from Audit Reports Carried Out onConventional Road Funds. Washington D.C.: World Bank.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———, Shunsuke Otsuka, Setsuo Hirai, Martin Fletcher,and Nancy Bennett. Review of Selected Road Funds.

Washington D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

iii. Planning a Seminar on RoadFinancing

World Bank and International Monetary Fund Documentson Commercially Managed Road Funds. Assembled byIan G. Heggie, February 1998. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Letter from World Bank Roads Adviser to Senior ManagingDirector, IMF. 1996. Collaboration with IMF inEfforts to Commercialize Roads. December.

Minutes of meeting between World Bank Roads Adviser andFiscal Affairs Division, International Monetary Fund.Meeting on Road Funds. January

Memo from E. V. K. Jaycox, World Bank Vice President,Africa Region, to Country Directors. 1995. Road Main-tenance Initiative. October.

Barry Potter. 1997. Dedicated Road Funds: A Preliminary Viewon a World Bank Initiative. Washington, D.C.: Interna-tional Monetary Fund.

iv. Setting up a Commercially ManagedRoad Fund

Bentchikou, Jaffar. 1999. Road Fund Features. WashingtonD.C.: World Bank.

Summaries of Operating Modalities of Existing and Proposed RoadFunds (Ghana, Zambia, Yemen, Lesotho, MozambiqueExperiences). Washington D.C.: World Bank. Available:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Sylte, Ole, A. S. Gicon, and Piers Vickers. 1997. OperatingModalities for the Proposed Road Fund in the HashemiteKingdom of Jordan. Washington D.C.: World Bank.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

v. Managing the Road Fund

Setting up an Oversight Board (Examples of Oversight Boardsin Latvia, Malawi, New Zealand, South Africa).Washington D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Collecting the Road Tariff under Contract (New Zealand, Yemen,Mozambique, Zambia). Washington D.C.: World Bank.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Exempting Non-Road Users from Paying the Diesel Levy. Wash-ington D.C.: World Bank.

Procedures for Dividing Road Funds between Different Road

Bibliography 111

Agencies. Washington D.C.: World Bank. Available:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Cost-sharing Arrangements used by Selected Local GovernmentRoad Agencies (Canada, Finland, Jordan, Japan, NewZealand, Peru). Washington D.C.: World Bank. Avail-able:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Examples of an Audit Report (Zambia National Roads Board,Sierra Leone Roads Authority). Washington D.C.:World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

vi. Terms of Reference for Setting up aRoad Fund

Setting up a New Road Fund (Jordan, Ethiopia, Zambia).Washington D.C.: World Bank.

Restructuring an Existing Road Fund (Guinea-Bissau).Washington D.C.: World Bank. Available:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Audit of an Existing Road Fund (Lesotho, Mozambique,Tanzania, Madagascar, Lebanon, Yemen). WashingtonD.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Dividing Funds between Different Road Authorities and/or Classesof Road (Mozambique, Tanzania). Washington D.C.:World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Improving Administration of the Road Tariff to Increase RevenueCollections (Tanzania). Washington D.C.: World Bank.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Studies of Road User Charges. Washington D.C.: World Bank.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

vii. Other References

Bennathan, Ezra. Economics for Toll Roads. In Earmarking,Road Funds and Toll Roads. A World Bank SymposiumDiscussion Paper. World Bank Development Depart-ment Report INU 45. Washington, D.C. Available:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Cellier, Jacques. 1992. Decentralizing Road Administration.Infrastructure Notes-Transport, Water and UrbanDevelopment Department, Transport RD-11. Washing-ton D.C.: World Bank. Available: http://www.worldbank.org/html/fpd/transport/publicat/td-rd11.htm.

DeLozier, Edward. 1989. The Dulles Toll Road: Conception,Operations, and the Future. In Earmarking, Road Funds

and Toll Roads. A World Bank Symposium DiscussionPaper. World Bank Development Department ReportINU 45. Washington, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Dick, Malise. 1989. Earmarking of Transport Funds inColombia. In Earmarking, Road Funds and Toll Roads. AWorld Bank Symposium Discussion Paper. World BankDevelopment Department Report INU 45. Washing-ton, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Faiz, Asif. 1991. Budgeting for Road Maintenance. Infrastruc-ture Notes-Transport, Water and Urban DevelopmentDepartment, Transport RD-4. Washington D.C.: WorldBank. Available: http://www.worldbank.org/html/fpd/transport/publicat/td-rd4.htm.

Gallardo, Gabrial Castaneda. 1989. Financing, Constructionand Operation of Highways through ConcessionaryArrangements in Mexico. In Earmarking, Road Fundsand Toll Roads. A World Bank Symposium DiscussionPaper. World Bank Development Department ReportINU 45. Washington, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Geraldes, Pedro. 1996. Road Sector Reform: The Four BuildingBlocks. Powerpoint presentation. RMI Unit. Washing-ton, D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———. 1997. The State in a Changing World: Lessons for theRoad Sector. Powerpoint presentation. AFTT1. Washing-ton, D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———. 1998. Dedicated Road Financing: Lessons and Chal-lenges. Powerpoint presentation. AFTT1. Washington,D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Gwilliam, Ken, and Zmarak Shalizi. 1999. Road Funds, UserCharges and Taxes. The World Bank Research Observer 14(2, August): 159–85. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Gyamfi, Peter, and Guillermo Ruan. 1991. Routine RoadMaintenance by Contract in Latin America and the Carib-bean. Infrastructure Notes—Transport, Water andUrban Development Department, Transport RD-8.Washington, D.C.: World Bank. Available: http://www.worldbank.org/html/fpd/transport/publicat/td-rd8.htm

Harral, C., and A. Faiz. 1988. Road Deterioration in Develop-ing Countries. Washington D.C.: World Bank. Available:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Heggie, Ian G. 1995. Management and Financing of Roads:


An Agenda for Reform. Technical Paper 275. Washington,D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———. 1999. Current Road Sector Innovations. Roads andHighways. Topic Note RH-1. Washington, D.C.: WorldBank. Available: http://www.worldbank.org/html/fpd/transport/topnotes/rh-1.htm

———. 2000a. First Generation Funds: What Went Wrong?Kent, United Kingdom: World Highways. Available:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———. 2000b. Second Generation Road Fund: Emerging ‘GoodPractice’. Kent, United Kingdom: World Highways.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———. 2000c. Second Generation Road Funds: The Way Ahead.Kent, United Kingdom: World Highways. Available:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———, and Piers Vickers. 1998. Commercial Managementand Financing of Roads. Technical Paper No. 409. Wash-ington, D.C.: World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

———, and Rodrigo Archondo-Callao. 1997. Road UserCharges Model. World Bank Paper. Washington, D.C.:World Bank. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Heller, Peter. 1989. An IMF Perspective on Earmarking. InEarmarking, Road Funds and Toll Roads. A World BankSymposium Discussion Paper. World Bank Develop-ment Department Report INU 45. Washington, D.C.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

LeBlanc, Maurice. 1989. Toll Road Experience in Malaysia.In Earmarking, Road Funds and Toll Roads. A World BankSymposium Discussion Paper. World Bank Develop-ment Department Report INU 45. Washington, D.C.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

McCleary, William A. 1989. Notes on the Principles andPractice of Earmarking. In Earmarking, Road Funds and TollRoads. A World Bank Symposium Discussion Paper.World Bank Development Department Report INU 45.Washington, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Oakland, William 1989. Principles of Earmarking. In Ear-marking, Road Funds and Toll Roads. A World Bank Sym-posium Discussion Paper. World Bank DevelopmentDepartment Report INU 45. Washington, D.C. Avail-able:http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

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Report INU 45. Washington, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Pankaj, Thampil. 1989. Road Fund Experience in Ghana. InEarmarking, Road Funds and Toll Roads. A World BankSymposium Discussion Paper. World Bank Develop-ment Department Report INU 45. Washington, D.C.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Raoul, Jean-Jacques. The Road Fund in Zaire. In Earmark-ing, Road Funds and Toll Roads. A World Bank Sympo-sium Discussion Paper. World Bank DevelopmentDepartment Report INU 45. Washington, D.C. Avail-able: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Revis, Joseph. 1989. Toll Road Pricing, Financing, Invest-ment and Design Criteria for Developing Countries. InEarmarking, Road Funds and Toll Roads. A World BankSymposium Discussion Paper. World Bank Develop-ment Department Report INU 45. Washington, D.C.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Seth, Subhash, and Stein Lundebye. 1996. Objectively Verifi-able Indicators of Institutional Development: A Case Study ofRoad Organization in Bangladesh. Infrastructure Notes-Transport, Water and Urban Development Department,Transport RD-22. Washington, D.C.: World Bank.Available: http://www.worldbank.org/html/fpd/transport/publicat/td-rd22.htm

———. 1989. Earmarking, Road Funds and Toll Roads. AWorld Bank Symposium Discussion Paper. World BankDevelopment Department Report INU 45. Washing-ton, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Wishart, Jennifer. 1989. Earmarking for Transportation: AView of the US Experience. In Earmarking, Road Fundsand Toll Roads. A World Bank Symposium DiscussionPaper. World Bank Development Department ReportINU 45. Washington, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Wuesterfeld, Norman. 1989. Toll Roads in the United States:Rate Setting and Levels and Financing Methods. InEarmarking, Road Funds and Toll Roads. A World BankSymposium Discussion Paper. World Bank Develop-ment Department Report INU 45. Washington, D.C.Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

Yucel, N. Cengiz. 1989. Toll Roads and Financing of RoadExpenditures in Yugoslavia. In Earmarking, Road Fundsand Toll Roads. A World Bank Symposium DiscussionPaper. World Bank Development Department ReportINU 45. Washington, D.C. Available: http://www.worldbank.org/html/fdp/transport/roads/rd_fnds.htm.

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