Road fund management

Setting up and supporting road fund administrations and providing support to ministries of finance and transport in the developing world.

Investment in adequate and timely maintenance of road networks is often neglected due to insufficient funding. Budget allocations from general revenues in many countries often systematically fall short of what is needed, leading to deterioration and the need for major rehabilitation at several times the cost of periodic maintenance.

IMC Worldwide has been involved in setting up and supporting road fund administrations since the 1990s, and has provided support to ministries of finance and transport in a range of countries, particularly in sub-Saharan Africa, where funds have been widely adopted. Our long experience in fund management has given us a strong understanding of the constraints policymakers and stakeholders face at all institutional levels, as well as how many of them can be addressed.

Since the 1990s, partly prompted by the World Bank's Road Maintenance Initiative, many countries have set up autonomous road funds to address this funding shortfall. The aim of modern road funds is to put roads on a "fee for service" basis, by which users pay for the use they make of the road, while the earned revenue is then designated for road upkeep.

A road fund is a special account, dedicated to the management of a designated road network. The primary road user charges are levies on fuel and vehicle licence fees. Funds are managed by a Road Fund Administration, established for the purpose, which reports to an oversight board, representing road users.

Services

  • advising on principles and practicalities of road fund design
  • drafting legislation to establish road funds
  • advising on appropriate organisational structures for road fund secretariats
  • preparing job descriptions and assisting with recruitment and training of staff
  • developing systems and procedures for road fund operations
  • advising road fund oversight board members on their roles and responsibilities
  • establishing procedures for collection, allocation and disbursement of funds
  • liaising with ministries of finance in developing and setting appropriate road user charge tariffs
  • liaising with road authority staff; explaining new systems and procedures associated with the allocation and accounting of funds
  • liaising with bodies responsible for collection of road user charges to ensure procedures are implemented effectively

Recent projects

In the late 1990s, IMC provided advice on the setting up of road funds to the governments of Tanzania and Zimbabwe in projects funded by the European Commission and World Bank/Danida respectively.

Both assignments involved extensive consultation with public and private sector stakeholders from ministry to district level. Major contributions were made to preparing the legislation required to establish the new institutions implement the new arrangements.

In Bangladesh, in 1998, we facilitated a major multi-stakeholder workshop, to promote the concept of a road fund. We subsequently developed a detailed action plan and road map and were later commissioned by the ADB to undertake a Road User Charge study. In 2004-5 we were appointed by DFID to provide technical assistance to establish the Road Maintenance Fund and prepare guidelines and procedures manuals.

In 2004, IMC worked with the newly created National Road Administration and Road Fund organisations in Mozambique, established under wide-ranging road sector legislation, passed in 2003.

Major changes in administrative and management practices needed to be put in place. We helped clarify and strengthen board members' understanding of their new oversight roles; and introduced a more results- and performance-based approach within the newly formed management organisations, working with senior, middle and junior staff throughout this process.

In Sierra Leone, in 2010, we were commissioned by the World Bank to help prepare a road map and action plan for the establishment of the new Road Maintenance Fund (RMF). A Road Fund specialist assisted the Ministry of Finance to initiate the recruitment process for the CEO of the RMF, help design the organisational structure of the new institution; and start drafting guidelines, procedures and regulations.

Advice was given on managing the new institutional relationships between the RMF, its board and the roads authorities. IMC was commissioned again, in 2012, to review progress and advise the fund on operational matters.

Following the passing of legislation in 2009 to set up a Road Fund in Uganda, IMC was commissioned to prepare an action plan for the transition period. Working closely with the Ministry of Finance, we helped establish, and then provided advice to, the Road Fund Board, helping its Chairman and members understand their roles and responsibilities.

We subsequently helped set up the interim secretariat (helping recruit the CEO and senior staff) and developed systems and procedures for both the Road Fund Secretariat and oversight board.

Sierra Leone: Organisational and Technical Support to the Road Fund, World Bank, 2010 & 2012-2014

IMC was commissioned by the World Bank to provide technical support to the Project Road Maintenance Fund Administration of Sierra Leone as part of its Infrastructure Development finance programme.

In 2010 IMC worked to prepare a road map and action plan for the establishment of the new Road Maintenance Fund (RMF) in Sierra Leone. An IMC Road Fund specialist assisted the Ministry of Finance to initiate a recruitment process for the CEO of the RMF, help design the organisational structure of the new institution and start drafting guidelines, procedures and regulations. Advice was also given on managing the new institutional relationships between the RMF, its board and road authorities.

From 2012-2014 IMC was re-commissioned to review progress and advise the fund on operational matters. Support was directed to the Executive and Board by our institutional and financial management specialists, who reviewed the existing organisational structure of the Road Fund and made recommendations for its improvement, assisted with the preparation and revision of job descriptions, reviewed and enhanced operational procedures for the fund - including the management of financial information, accounting systems and administrative or operational procedures - as well as worked with Fund executive staff and Board Members to enhance efficiency and improve the Fund staff’s operational procedures and communication with counterpart organisations.  

Uganda: Technical Assistance to Road Fund, Danida, 2009-2011

The Uganda Road Fund was established by the Uganda Road Fund Act in 2008. Its main objective was to provide a sustainable source of finance that enabled the delivery of routine and periodic maintenance of public roads. Danida was supporting the provision of institutional strengthening and financial management assistance during the establishment of the Road Fund.

IMC was commissioned by the Ugandan Ministry of Finance, Planning & Economic Development to provide an Institutional and Financial Management specialist to work with the Road Fund Board and Interim Secretariat during the first months of the Fund’s establishment. IMC had also provided assistance under a previous EU-financed Technical Assistance project.

The primary purpose of the specialist was to:

  • advise on the preparation of a road map for the transitional arrangements and establishment of a Secretariat for the Road Fund.
  • assist the Board to prepare job descriptions and recruit an Executive Director and Secretariat staff, undertake an institutional appraisal and assessment of training needed for the Board and Secretariat staff in order that the Fund may manage its affairs in a transparent and cost effective manner.
    Assist the Secretariat to formulate a public relations/ communications strategy.
  • help put in place modern management practices and techniques to support the development of the core financial management systems needed by a Road Fund (covering systems for collection and disbursement of revenue; allocation of funds, budget preparation, financial reporting and accounting, internal and external audit).