Road infrastructure finance: User must pay

Phinias Tafa Infrastructure Report
The average age of major roads in Zimbabwe is 50 years and they have lasted without major repairs or new road networks being created to develop a sustainable road network system. Thus, understanding the country’s road network system is the foundation for building consensus on the appropriate

response to Zimbabwe’s road infrastructure problems.

These problems can be summed up thus, poor road conditions whose maintenance and rehabilitation is constrained by insufficient funding and institutional inefficiency. Based on the challenges which the Zimbabwean economy is facing and how heavily reliant it is on functional road infrastructure, it is important to consider developing up to standard road infrastructure so as to increase safety and reduce congestion and transport related costs.

Such an improvement should ultimately see the sustenance of Zimbabwean communities, growth of our struggling economy and improvement of Zimbabwe’s regional competitiveness.

The need to understand our road systems has been made all the more important in recent times by the intended scaling-up of infrastructure development, as highlighted by the operational national economic blueprint, Zim-Asset.

The public’s general understanding of the meaning of the word road is fundamentally different to the legal definition used to enforce traffic laws and to undertake relevant infrastructure development. The former is the traditional view and the later the statutory view.

Section 2 of the Road Act, Chapter 13:18 provides that“road” means any road which is ¾

(a) a regional, primary, secondary, tertiary or urban road;

The importance of this definition lies in arranging the country’s roads in a hierarchical manner, which in itself is the basis of our road infrastructure development and management policies.

In non-legal terms regional roads link the country to its neighbours, in the process aiding the movement of goods and people in and out of the country. The Plumtree-Mutare and Beitbridge-Chirundu roads are Pan African Roads.

Being a landlocked country or centrally placed between a numbers of countries, it is critical for Zimbabwe to have a network of well-maintained and competitive international routes. With the country’s rail transport currently incapacitated, road has becoming the dominant mode of transport in terms of both freight and passengers.

Having an efficient regional route network has a positive effect on transport costs, which makes the country’s import and export bills fairly competitive. This has a knock-on effect on national economic development. Zimbabwe is strategically positioned and linked to countries which are not landlocked such as South Africa and Mozambique. Such a position is in itself crucial for fuelling economic growth from servicing other countries.

Primary and secondary roads serve the country’s economic hubs by supporting internal movement of people and goods to make the socio-economic sectors of the economy function well. Such economic hubs include ‘’commercial, industrial and mining centres and tourist attractions’’

A tertiary road is identified by the Act as “road which provides access to schools, health centres, dip tanks and other service facilities within a rural district council area or connects and provides access to secondary, primary and regional roads within and outside a rural district council area’’.

Regional, primary and secondary network form the trunk road system. According to Section 2 of the Road Act, trunk roads fall under the authority of the Department of Roads (DoR)in the Ministry of Transport and Infrastructure Development. This has a strong implication on development and maintenance of the road.

The period 2000-2001 is very significant in the development of roads in Zimbabwe as the sector went through important institutional reforms. Prior to 2000, development of roads was largely financed by government from national budget appropriations. As the public finances were getting smaller and smaller, this approach was becoming less and less sustainable due to increasing fiscal stress.

In response, authorities introduced road-user charges starting in the early 2000s. These user charges, identified by the Act as toll fees, fuel levies, axle overload and abnormal loads fees, heavy vehicle surcharges, vehicle registration and licensing fees and international transit fees were assigned to the Road Fund. In other countries it is called the consolidated fund. The motivation behind this is that road users must pay for the costs of road provision.

It must be emphasised that the bulk of these user charges are based on amount of use, or what is known as road pricing. Besides registration and licensing fees, other charges are on a “the more you use, the more you pay basis”. Registration and licensing fees are based on revenue decoupling, defined as user charges not linked to consumption.

The bottom line however, is that these pricing and cost recovery policies will improve efficiency of managing our road infrastructure development through improved sector economic viability and financial viability.

Administration and management of the Fund was vested in Zimbabwe National Road Administration (ZINARA). The Fund is disbursed by ZINARA to various road authorities including DoR in the Ministry of Transport and Infrastructure Development, Urban Councils, who are responsible for urban roads and Rural District Councils and District Development Fund, responsible for rural roads. So contrary to what a number of people think, ZINARA’s mandate is not to maintain any road, but to manage financial resources required by those tasked to develop and maintain roads, technically known as road authorities.

The institutional reforms of the 2000s which saw the introduction of the Fund in 2002 ushered in the fee-for-service concept. Others call it off-budget road financing. The basis of this concept lies in the cost-recovery principle and the benefit principle. Ultimately, user charges affect the user’s behaviour and signal infrastructure investment. The concept must be balanced with social justice.

The fee-for-service approach changed the government’s role from being a direct financier of road infrastructure to being an enabler of efficiency and adequacy in the transport sector. This includes setting of elaborate transport sector goals, objectives and strategies.

Perhaps another way to look at the effect of the institutional reforms was the unbundling of government’s previous tasks of policy and regulation, programming and financing, and execution of works. The reforms meant policy and regulation remained with government, programming and financing went to ZINARA with execution of works going to road authorities, specified as DoR, UCs, RDCs and DDF.

The success of this approach can be assessed on the basis of the World Bank and IMF’s guidelines. The two institutions concur that there are two main issues that determine the success of the fee-for-service concept. These are minimising the adverse impacts on the budget and strengthening the financial discipline to ensure better value for money.

Next week we analyse the success recorded by the Road Fund or ZINARA in aiding road infrastructure development. We will also look at the challenges faced and possible recommendations.

Nonetheless, we certainly need to applaud the impressive amount of commitment from ZINARA in executing its statutory mandate of aiding the delivery of a world class road network, through managing the Road Fund. If the recently completed Plumtree–Mutare InfraLink road project is the standard to expect, then surely we are on a roll. This just proves that ZINARA is a bedrock for ensuring that the country has a road infrastructure that meets international standards.

I have been receiving many questions like why our roads are black, is the use of public transport in comparison to private transport good for the maintenance of our roads and what the total value of our roads is. I am currently compiling answers to these frequently asked questions and findings will be for public information.

  • Phinias Tafa is an infrastructure development consultant, and his focus lies more in public infrastructure. He is the Head Consultant of the African Centre For Real Estate and Land Economics (ACRELE). [email protected] or skype phin.tafa


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