Phinias Tafa Infrastructure Report
As a carry-on from last week’s article, this week we look at how Zinara, as the custodian of the Road Fund (Fund), has performed.
Remember the Fund is mostly funded from toll fees, fuel levies, axle overload and abnormal load fees, heavy vehicle surcharges, vehicle registration and licensing fees and international transit fees.
There are the three main purposes of the Fund and these are grants to road authorities for road maintenance and emergency works, then road safety activities and Zinara’s salaries and administration costs.
The third use must not exceed 2,5 percent of the Fund’s revenue.
According to the Act, each road authority submits a yearly road work programme and required budget.
The various localised programmes and budgets are in turn reviewed and consolidated by Zinara into a single national road work programme and disbursement budget.
Fund disbursements are done by percentage splitting of total funds available between roads of different classes.
The Zinara board prescribes a formula that takes into account the class of the road, its length, width, surface type, and traffic level, and by identifying needs based on the condition of the network.
The formula is to a large extent motivated by equitability between the various road authorities and Government’s priorities.
The actual allocation is done on the balance of the road authorities’ programmes, their performance in the use of past allocations and national priorities.
Disbursements for approved road programmes are made in advance on a quarterly basis.
Funds for other works are disbursed on the basis of completed works certified by Zinara.
The board also reserves a substantial amount for emergency works that may arise in the course of the budget year.
Past revenues have been allocated to road authorities in approximately the following proportions: 40 percent to Department of Roads (DoRs), 35 percent to rural roads and 20 percent to urban roads (World Bank 2014).
Five percent was used for Zinara administration and Vehicle Inspection Department (VID). However, following a red flag raised by the Auditor General in 2014, Zinara has stopped allocating any funds to VID as from February 2015.
Traffic Safety Council (TSC) also used to get an allocation from the Fund.
Besides this role, ZINARA is empowered to assist road authorities in planning, implementation and supervision of works it funds.
It is further empowered to do technical, environmental or financial audits to ensure proper use of disbursements.
The way Zinara disburses funds has raised issues with the AG, who noted that Zinara disburses funds without regard to predetermined or budgeted allocations.
As a result, some road authorities have in the past received figures 1503 percent over their allocations while others received nothing (Auditor General, 2014).
The following two cases explain this situation. In 2012 the DoRs was allocated $3,3m but instead received $14,3m. Again in 2013 DoRs got 1503 percent more than its $1m allocation. In contrast, Kariba Urban Council did not get anything in 2012 and 2013 despite having been allocated $150 000 and $100 000 respectively.
Since the predetermined allocations are based on the condition of existing road networks in a particular area, among other considerations, this means the condition of Kariba’s roads has become worse with no fiscal support. Zinara argues that non-disbursements are a stick for poor use of previous disbursements.
The writer’s argument is that this stick does not hit the intended target, who in this case is Kariba council management, but the innocent and unfortunate road user.
Zinara must remember that despite the road users’ road authority failing to get a disbursement for whatever reason, they will keep making their statutory payments in their various forms to the Road Fund.
They cannot stop paying because previous disbursements were not used properly.
People who pay towards the Fund should also not be made to think that their payments are being used to develop other areas whilst theirs remain neglected. Certainly Zinara would not want issues of unfairness raised against the Road Fund.
In fact, Zinara has a duty to show the public visible evidence that their payments to the Road Fund are being put to good use.
It is always desirable to win as much support as possible from all road users.
To that end, withdrawing disbursements is not the visible evidence being talked about here.
They should revise the methodology of penalising errant road authorities.
Rather than withholding allocations, perhaps they can introduce direct supervision and have a hands-on approach on such authorities. After all the Act empowers them to be involved in planning, implementation and supervision of road works they fund.
Kariba is one of our flagship resort areas and just imagine the effect of its poor road network on the visiting tourist.
This is happening at a time Hon Mzembi and Mr Kaseke are losing sleep about how they can increase the country’s tourist arrivals, both domestic and international.
This shows that more should be done to integrate Zinara’s operations with those of other Government departments.
Nonetheless, Zinara should be applauded for putting in place a system of quarterly disbursements.
This avoids a situation where they will have large cash balances in their accounts when other government departments are in serious short of fiscal resources.
Evidence from other road funds has shown that unspent large cash balances usually lead to “raids” on the road fund.
The current liquidity challenges obtaining in our Government increase the likelihood of such raids.
Large Fund balances also attract other unauthorised withdrawals on the fund from within.
In conclusion, it must be noted that what Zinara is doing is critical for scaling up private sector participation in the development of our road network. The visible high level of professionalism in road revenue collection and administration has the effect of increasing the Fund’s creditworthy, which in itself is a framework under which the private sector can release long term financial resources.
Next week we look at the country’s indigenisation and empowerment framework with reference to the infrastructure sector.
Did you know that the oldest Road Fund in the world is in South Africa? It was established in 1935.
Phinias Tafa is the chief executive officer of Africa Centre for Real Estate and Land Economics (ACRELE). Feedback: [email protected] Phone: 0772 265 072 or 0733 422 377