Uganda Road Fund-Operational Issues

OVERVIEW

Updates

The Uganda Road Fund-OPERATIONAL ISSUES

By ensuring stable and regular financing, the Road Fund will contribute to increasing effectiveness and efficiency in the delivery of road improvement and road maintenance services. A well constituted road fund will support the ongoing commercialization of road management, increase resources available to road maintenance and increase overall efficiency of road sector resource allocation and use

The Fund shall manage its business according to commercial principles, to enable effective, efficient and stable road expenditures through the implementation of a system of road user charging. Read more on the benefits of the Road Fund for Uganda.

Organizational Aspects

In the interim, before the Law is enacted, the Road Fund shall be overseen by the Road Sector Development Programme (RSDP) Steering Committee, chaired by the Permanent Secretary and Secretary (PS/ST) to the Treasury, and co-chaired by the Permanent Secretary (PS), Ministry of Works and Transport.

Other members include a representative of the PS-Ministry of Public Service, Officials from the Ministry of Works and Transport, Ministry of Finance Planning and Economic Development, representatives of the African Development Bank (ADB), DANIDA, European Commission, JICA and The World Bank.

The Secretariat is the RSDP Coordination Unit in the Ministry of Finance, Planning and Economic Development.

The Finance Bill 2007

On Wednesday 11th July 2007, Cabinet approved the Finance Bill 2007. The object of this Bill is to provide for the alteration of the tax base for hides and skins; exemption of motor vehicles, trailers and engineering plants from road licences and fees, establishment of the Road Fund; the waiver of interest and penalties for voluntary disclosure of tax liability; amendment of the Finance Act, 2006 to change the fees relating to services and various documents under the Traffic and Road Safety Act, 1998, Cap.361 and to extend the scope of the environmental levy payment of bonuses to Uganda Revenue Authority in respect of meeting targets of collection of revenue and for related matters.

The Minister of Finance, Planning and Economic Development, Hon. Dr. Ezra Suruma signed the Finance Bill on 20th June 2007.

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Road Sector Reforms

In response to the need for reforms in the road sub - sector, the World Bank, Economic Commission for Africa and other development partners developed the Road Maintenance Initiative, which later became Road Management Initiative (RMI) for Sub-Sahara African and other developing countries. The objectives of RMI were to:

Sustain and deepen dialogue on the need for policy reform and on the available reform options;
Develop and disseminate knowledge on sustainable road management and financing practices;
Systematically assess results of the reform and disseminate lessons learnt and best practices; and
Build capacity to carry out policy analysis, strategy formulation, reform monitoring and post-evaluation.

The RMI philosophy was based on commercializing the management and financing of roads. This involved bringing roads into the market place, put them on a fee-for-service basis and manage them like a business.

Commercialization required complementary reforms in four areas or building blocks:

Ownership	To empower and encourage the public to play an active role in the management of roads and, in so doing, win their support for road funding.
Financing	To develop a financing mechanism for securing an adequate and stable flow of funds based on explicit and appropriate road user charges.
Responsibility	To clearly establish who is responsible for what in the road sector by assigning roles in a definitive manner with matching authority and performance targets.
Management	To ensure the adoption of sound business practices and managerial accountability through effective use of systems and procedures.

More on the sector reforms is presented here

Transport Sector Policy Issues

The transport sector policy aims at providing strategic support and linkage to the Government declared Poverty Eradication Action Plan (PEAP) under Pillar II that seeks to enhance production. To give transport modal linkage, the sub-sector has the following supplementary policies: -

Ensuring an optimum and sustainable road network and bridge stock that balances traffic needs against safety and environmental demands;
Promoting railway transport as a prime long distance carrier of heavy and bulk goods to and from sea ports;
Promoting safe, reliable, affordable and efficient water transport; and
Ensuring that the liberalized aviation industry is safe, secure, effective and efficient.

Among emerging issues is support to the local construction industry (LCI) to build capacity that can match the big road projects on the national and district roads. A policy framework to foster growth of the industry is presented in this document, as is the financial requirement to jump-start it.

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Funding of the Transport Sector

The main financial policy objective remains the achievement of strong, private sector-led growth which contributes to economic development and poverty reduction with the improvement in transport infrastructure considered as a critically important ingredient. The 2004 revised Poverty Eradication Action Plan underlines the need to improve transport infrastructure in order to boost production, incomes and competitiveness by linking producers to their markets and by facilitating market integration.

Accordingly, in the Road Sector Development Programme, Government in cooperation with the Development Partners have endeavored to provide a safe and efficient road network capable of meeting the present and future traffic demand. The following Issues Paper on Transport Sector Financing provides more detailed information.

RESOURCES

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Project Progress

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In the FY 2006/7, upgrading from gravel to bitumen of Karuma - Orwiyo - Packwach road (108km) and the rehabilitation of Kikorongo -Katunguru and Kikorongo -Mpondwe road, rehabilitation of Hima - Kasese - Kikorongo and Kasese - Kilembe roads (106km) were completed. In addition, 4No junctions (Clock Tower, Shoprite, Mengo/Katwe Hill, and Kampala Rd/Entebbe Rd) remodeled to improve traffic flow in Kampala city.

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Contact Us

Uganda Road Fund, C/O: Road Sector Development Programme (RSDP)

Ministry of Finance, Planning and Economic Development |Finance Building, Apollo Kaggwa Road

P. O. Box 8147 Kampala, Uganda | Tel. +256 414 577 495 | Fax: +256 414 255 038

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