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Annual Report 2008

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Annual Report 2008 ROAD MANAGEMENT INITIATIVE NATIONAL ROAD FUND AGENCY ANNUAL REPORT 2008 PDF Creator - PDF4Free v3.0 http://www.pdf4free.com CONTENTS ROAD MANAGEMENT INITIATIVE 2 VISION, MISSION, GOAL AND VALUES 2 3 CHAIRMAN’S FOREWORD 3 4 DIRECTOR’S REPORT 6 5 ADMINISTRATION 12 6 INTERNAL AUDIT 15 7 CORPORATE GOVERNANCE 16 8 RMI COMMITTEE OF MINISTERS 17 9 RMI COMMITTEE OF PERMANENT SECRETARIES 17 10 BOARD OF DIRECTORS 18 11 FINANCIAL HIGHLIGHTS 19 12 MONITORING AND EVALUATION 25 13 PROCUREMENT 32 14 ANNEX 1: TRENDS IN FUEL WHOLESALE PRICING IN 2008 33 15 ANNEX 2: ROAD FUND LOCAL RESOURCES CONTRACTS INITIATED IN 2008 34 16 ANNEX 3: ONGOINGROAD FUND CONTRACTS CARRIED OVER FROM 2007 TO2008 47 17 ANNEX 4: PROJECTS INITIATED IN 2008 54 18 ANNEXE 5: FINANCIAL STATEMENTS 57 PDF Creator - PDF4Free v3.0 http://www.pdf4free.com VISION, MISSION, GOALS, and VALUES ROAD MANAGEMENT INITIATIVE VISION To be a world model in the mobilisation and management of road sector finances. MISSION Will mobilise and ensure adequate, sustainable and efficient allocation of financial resources in the road infrastructure and road transport services in Zambia. GOAL The NRFA will ensure timely provision of adequate financing resources for developing and maintaining quality road infrastructure and road transport services in Zambia. VALUES · Transparency · Accountability · Impartiality · Integrity · Professionalism · Service ethics/customer satisfaction · Zero tolerance to corruption PDF Creator - PDF4Free v3.0 http://www.pdf4free.com CHAIRMAN’S FOREWARD ROAD MANAGEMENT INITIATIVE the National Road Fund Act No.13 of 2002. 2. ACHIEVEMENTS The following critical activities were achieved during the period under review but the list is not exhausted: a) Annual work plan 2008 at a cost of ZK1.2 trillion was disbursed as per plan and funds were released on time b) Various options for broadening the Road Fund were indentified and will be implemented in 2009 c) Road User Charges were channeled to the Road Fund d) A Statutory Instrument to increase road taxes under the Road Transport and Safety Agency (RTSA)was signed CHAIRMAN’S FOREWORD e) A Statutory Instrument to channel road taxes directly to the Road Fund was signed 1. INTRODUCTION f) Committees of the Board were reviewed together with their Terms of Reference Firstly, I would like to thank the Committee of Ministers g) Team work amongst key players and on the Road Maintenance Initiative (RMI), Ministry of stakeholders was enhanced Finance and National Planning, my fellow Board members, h) Training and Loan policies were approved by management and staff for the cooperation that was the Board accorded to me during the year under review. I was i) Arrears to contractors and consultants were appointed Chairman of the National Road Fund Agency dismantled on 16th July 2008 and I found it to be a challenge after j) Various visitors from other countries visited being a Vice Chairman in the previous Board. the Agency to learn how the Road Fund is administered and managed Upon taking up the appointment, I ensured that the Board k) Information on the activities of the Agency were adequately disseminated to road users PDFhad Creatorto review - PDF4Freethe set up a nv3.0d w o r k i n g e n v i r o n m e n t o f http://www.pdf4free.com the Agency. Consequently, we had to put measures in place to boost morale of staff and energize motivation which 3. FUNDING TO THE ROAD SECTOR CHAIRMAN’S FOREWARD ROAD MANAGEMENT INITIATIVE to heavy rains. road users and the private sector in planning and implementation of these various initiatives. This natural phenomenon is beyond us and is difficult to plan for it. Therefore, we shall work closely with the We appeal to Cooperating Partners to continue helping Disaster Management and Mitigation Unit (DMMU) in the us beyond 2013 because of the backlog of maintenance Vice President’s office to address such type of capacity constraints, and the financial gap in the tribulations. programme. Local Authorities and other stakeholders in the road 4. SUSTAINABILITY sector should get involved in the financing of the roads. Projects that have been commissioned are on long term Activities like cleaning of drains, sweeping of roads, sustainable maintenance. Experience has shown that street lights and traffic lights maintenance are functions poor road maintenance raises the long-term cost of of local authorities as per the Local Government Act. maintaining the road network. Maintaining a paved road for 15 years costs about US$60,000 per Km. If the road Therefore, part of revenue from station fees, parking is allowed to deteriorate over 15-year period, it will cost fees and rates could be channeled to these activities. about $200,000 per Km to rehabilitate it. The fuel levy is tied to the oil global prices and as such it has become unpredictable, especially in this era of the This shows that rehabilitating paved roads every 10-20 credit crunch. years is 3 times as expensive, in cash terms, as maintaining them on a regular basis, and 35% more There is need to engage in partnership with all expensive in terms of net present value discounted at stakeholders and to look at other sources of revenue. 12% per year. Government has led the way by buying equipment for The same pattern holds for gravel roads. Maintaining a road maintenance in rural areas. The private sector’s gravel road for 10 years costs between $10,000 - $20,000 input is also required. per km, depending on climate and traffic volume. If no maintenance is done for 10 years, it will cost about A consultant has been engaged to review ROADSIP II and $40,000 per km for needed rehabilitation. come up with appropriate financial strategies. The study is expected to be completed in January 2009. The Mid Rehabilitating gravel roads every 10 years is thus twice Term Review will also reveal whether ROADSIP II is on as expensive, in terms of cash, as regular routine and course or not. We should be addressing the backlog of periodic maintenance, and between 14% and 128% more PDFma iCreatorntenance - aPDF4Freend future p v3.0rojec t s w h i c h w i l l h a v e a n http://www.pdf4free.com expensive in terms of net present value discounted at immediate impact on communities and economy. These 12% per year (World Bank). CHAIRMAN’S FOREWARD ROAD MANAGEMENT INITIATIVE A good road network is a catalyst for economic development Challenges in the Road sector are similar to those that investments income, broaden the Road User Charges, we had last year. For instancem, long tendering capital market, etc. processes, limited budget, deplorable township and rural We also look forward to quality road works, prudent use roads, lack of appropriate road interventions as asphalt of scarce resources, more involvement of beneficiaries is not sustainable. Furthermore, there is a need for in planning and management of roads, value for money innovations in the use of marginal materials like Otta and motivated staff. seal and low volume sealed roads, which are cost effective and environmentally friendly in the long run. 7. CONCLUSION PDFThe rCreatore is also - tPDF4Freeoo much d ev3.0pend e n c e o n C o o p e r a t i n g T h e B o a r dhttp://www.pdf4free.comworked very hard through its various Partners and consultants even for small works which could specialized committees in formulating policies and DIRECTOR’S REPORT ROAD MANAGEMENT INITIATIVE new roads; and g) Undertake such other activities as are conducive or incidental to its functions under this Act. This report concentrates on operations of various projects under the ROADSIP II, which has been running from 2004-2013 at an estimated cost of US$1.6 billion. A lot of issues were achieved in 2008 and notable ones were implementation of project objectives, strategic and business plans, Risk management and strategic approaches to broaden the revenue base by using instruments under the Public Private Partnership policy document. Study tours were undertaken to go and learn how other countries are implementing toll gates. Countries visited were Mozambique, South Africa and 8. INTRODUCTION Lesotho. It was found that they were charging toll fees in addition to the fuel levy which is inadequate for I would like to thank the Board, management and staff the large size of their network. A feasibility study to for their invaluable support during the period under establish the viability of toll gates in Zambia will be review. The teamwork that was demonstrated led to Road completed in 2009. Investment Programme, phase II (ROADSIP II) objectives and mandate being met. Compliments were received There is also a need to review Other Road User Charges for our uncompromised transparency and accountability and bring them in line with international practice. in the. Mandate of the Agency as per the National Road Zambia is charging 8cents per litre of diesel but the Fund Act No.13 of 2002, clause 4 (1) are as follows: average charge in 29 African countries is 10cents per litre, with Tanzania charging 14 cents per litre. Hard a) Administer and manage the Road Fund. decisions should be made if they are for the good of b) Prepare and publish audited annual accounts of the road users as they will accelerate economic the Road Fund. development by promoting smooth movement of goods PDFc) CreatorReco -m PDF4Freemend to the v3.0Minis t e r f u e l l e v y a n d o t h e r a n d s e r v ihttp://www.pdf4free.comces thereby invariably empowering local road user charges and tariffs as required.
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