47431 TRANSPORT NOTES THE WORLD BANK, WASHINGTON, DC ROADS AND RURAL TRANSPORT THEMATIC GROUPAugust Transport Note No. TN-Draft 2008 THE WORLD BANK, WASHINGTON, DC Transport Note No. TRN-37 December 2008 Assessment of Road Funds in South Asia Region Jean-Noel Guillossou and Natalya Stankevich The findings, interpretations, and conclusions expressed here are those of the author and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. SUMMARY Sustaining an adequate level of resources for road The study suggests the following recommendations: maintenance has been a continuous issue worldwide, including in South Asia. Since the late 1990s South Asia · The establishment of a RF is an appropriate answer has developed different models of Road Funds (RFs) ­ at to financing of road maintenance when there is a the national level, or in the case of India at the state and budget system failure; local level ­ to improve sources of financing for road · Assessment of governance should be conducted at maintenance and development. the country level before promoting the establishment of a RF; The World Bank South Asia Transport team has carried · Priority should be given to achieving good out a review of RFs in the region to draw lessons learned governance of the RF and its Board; from the past experience. The review provides the · Where the road agency has good capacity for road analytical underpinning for advising governments on how management, the RF can concentrate on to improve the performance of existing RFs or how to management of resources and focus more on its role establish new RFs for road maintenance, and for of financial institution; providing guidance to the World Bank for revising its · The creation of a RF should be considered in parallel transport sector strategy in relation to road policy with development or strengthening of the road reforms in the South Asia region. management capacity of an executing road agency; · An accountability mechanism should be developed to The review concluded that only two out of nine RFs ensure that all revenues collected from fuel charges studied give priority to maintenance, while the rest and designated as RF resources in accordance with finance development of roads. These are, Roads Board the relevant legal framework are transferred in full (RBN) in Nepal and Road Maintenance Account (RMA) in from the central treasury to the RF account; Pakistan. · Monitoring road maintenance programs and use of resources needs to improve and the designation of The main lessons learned include: the road institution in charge of monitoring the quality of the road network needs to be clarified; · Improved governance at the country (or state) level · Governments should continue providing budgetary is one of the key success factors for effective support to road maintenance; performance of a RF; · User fees should not be used as revenues of a · Fuel levies are never deposited directly to the RF development RF; account; · Allocation rules by type of road/network should be · RFs cannot be the only institutions held accountable defined in the Legal Act creating the RF; for the management of roads. · Decisions on the allocation of resources by type of work for local road networks should be decentralized and not made by the RF. Page 2 Transport Note No. 37 December 2008 BACKGROUND AND OBJECTIVE OF THE There are indications that countries in the South Asia STUDY region are still seeking to improve sources of financing for road maintenance and development in an Sustaining an adequate level of resources for road environment where financing requirements for roads are maintenance has been a continuous issue worldwide, increasing rapidly to sustain fast economic growth. including in South Asia. In the 1990s most countries, especially developing countries, accumulated a In its current Eleventh Five-Year Plan (2007-2012) maintenance backlog caused by insufficient resources Government of India underscores the importance of allocated to maintenance. A study on road deterioration "generation of additional resources through modern in developing countries (Harral and Faiz, 1988) found road fund at state level" since budgetary resources that South Asia had the largest backlog of maintenance to cover maintenance and upgrading of state roads is work among all world regions which was estimated at substantially limited. However, it stresses the need 3.5% of GNP.1 This has resulted in the loss of road assets to analyze the effectiveness of the existing RFs in and the need for costly rehabilitation in an environment Indian states, in particular whether they provide where resources are constrained and where maintenance additional resources to the normal budgetary and rehabilitation have to compete with development of allocations. the road network in response to economic growth and poverty reduction imperatives. Roads Board Nepal (RBN) was under detailed assessment three years after its establishment and To address this issue, several countries have established an amendment to the RBN Legal Act to improve Road Funds (RFs) with two objectives; creating additional RBN's performance is currently under consideration resources, and securing resources for road maintenance. by the central government. The Bank has encouraged the establishment of second generation RFs (2G RF) as a possible solution to secure Government of Pakistan which created a Road stable and adequate flows of funds independent of the Maintenance Account (RMA) not long ago has government budgets. recently started considering establishing a Federal Road Fund to increase the level of financing of maintenance of national highways. The objective of a 2G RF is to improve governance and efficiency in the provision and use of road maintenance Governments of Bangladesh, Bhutan and Sri Lanka, resources. This is to be achieved through the following and Governments of several Indian States want to three principles: learn lessons from their neighbors. · Securing adequate and sustainable maintenance The time is thus right to undertake a review of RFs in the funding by increasing the share in the maintenance region and draw the lessons learned from the past budget of revenues collected from road users experience. The present review provides the analytical through road user charges by applying the fee-for- underpinning for advising governments on how to service principle; improve the performance of existing RFs or how to establish new RFs for road maintenance, and for · Empowering road users in decision-making regarding providing guidance to the World Bank for revising its the priorities of funding due to their vested interest transport sector strategy in relation to road policy in good condition of roads; reforms in the South Asia region. · Setting up commercialized type management of RF. The initial objective of this study was to assess the effectiveness and impact of the RFs in SAR (i) on the When established in the late 90s,2 the principles of 2GRF level of funding for maintenance and (ii) condition of road were biased by the situation in Africa where the road networks which are maintained with RF resources. management capacity was weak. For that reason, it was However, in the course of research and data analysis, the proposed at that time to also assign a role in road review revealed that only two ­ RBN and Pakistan RMA - management to the RF in addition to securing out of 9 RFs studied give priority to maintenance, while maintenance funding. the rest finance development of roads, making it difficult to conclude on the level of funding for maintenance. Also, Since the late 1990s South Asia has developed different though the data on allocations and actual expenditures models of RFs: at the national level, or in the case of on road maintenance was available for India's Ministry of India at the state and local level. Unlike in African Roads, Transport and Shipping, and States' Public Works countries, RFs in South Asia were not given a role in road Departments they had no relevance to the performance management because of a stronger capacity of Public of India RFs, which in reality support essentially Works Departments/Departments of Roads in the region. development and major improvements of roads. With respect to the condition of road networks, even those two RFs dedicated to maintenance do not collect data which would be appropriate to determine the impact they make 1Eastern and Southern Africa's backlog of maintenance work was on the condition of roads maintained or developed with estimated at 3.3% of GNP, Western Africa's at 3.2%, Europe, the their resources. These findings completely changed the Middle East and North Africa at 2.6%, Latin America and the course of the study and shifted its focus towards the Caribbean at 2%, and East Asia and the Pacific at 1.6% (Harral assessment of the institutional and funding arrangements and Faiz, 1988). of the existing RFs in the region. 2Heggie and Vickers. World Bank. 1998 Page 3 Transport Note No. 37 December 2008 The assessment is based on the key characteristics of 2G operational procedures. These three RFs were not RFs which are described in the World Bank (Heggie and included in the study because Mizoram and Bangladesh Vickers, 1998) and IMF (Potter, 1997) papers. The RF were not in operation yet and SL RMTF did not have a chapters of the note are structured around these lot of experience and lessons to share in 2007 when the characteristics: study was launched. · Mission and reason of creation of RFs, The term RF is used as a generic term in the study · Sound legal basis, despite the fact that it does not comply with the general · Purchaser and provider split, definition of a Second Generation (2G) RF in some cases. · Good governance, · Measurable outputs and performance indicators, Mission and reasons for creation of a RF · Fund flow mechanism outside the government's budgetary framework, and To ensure adequate and stable sources of maintenance · Funding allocation rules. funding was the main reason for establishing a RF in Nepal, Pakistan, Assam, Karnataka, and UP, which is The last chapters of the report focus on lessons learned consistent with the concept of a 2G RF. In reality, from this assessment and elements for consideration and however, out of these five RFs, only two, in Nepal and discussion during the formulation of new transport Pakistan, are dedicated to financing maintenance and policies in the region. The recommendations provided give priority to routine maintenance. The three others have been developed to improve performance of existing finance either development of roads or major RFs financing maintenance and help establish new Road improvement works or consultancies, not routine Maintenance Funds when such policy decision is found maintenance.5 The four remaining RFs (all in India) were appropriate. Some recommendations can also apply to established to fund development of roads. RFs financing development and rehabilitation of roads. However, the paper is not aimed at developing While good reasons can explain why RFs in India either recommendations on restructuring RFs financing give priority to development or to major rehabilitation development and rehabilitation of roads. works or were specifically created to fund development of roads, the risk is lack of sustainability due to lack of ASSESSMENT OF ROAD FUNDS IN SOUTH maintenance of assets invested and ultimately loss of ASIA these assets. This was the lesson learned from the Road Deterioration in Developing Countries Study carried out Road Funds covered by the study by the World Bank in 1988. India had until recently a road network in poor condition with limited capacity The study covers nine Road Funds created since 1990: which was becoming a bottleneck to sustained high economic growth. The Government decided to increase (i) three RFs at the national level: resources to development of the road network to · India Central Road Fund (CRF) established in 2000, eliminate this bottleneck. While this strategic decision has · Roads Board Nepal (RBN) in 2002, shown positive results in the short term, the RFs as used · Pakistan Road Maintenance Account (RMA) in 2003, presently do not provide a long-term answer to and sustainability of the road network. (ii) six RFs at the state level in India: Sound legal basis6 · Uttar Pradesh (UP) State Road Fund3 in 1998, · Madhya Pradesh (MP) Farmer's Road Fund4 in 2000, Theoretically, a sound legal basis can make a RF more · Kerala State Road Fund in 2002, sustainable if it is established through a Law or Act rather · Assam State Road Fund in 2003, than through a Decree or Rules and Regulations, as the · Karnataka Chief Minister's Rural Road Development latter may be easily amended or cancelled with the arrival Fund in 2004, and of a new government. Only four out of 9 RFs studied were · Rajasthan State Road Development Fund in 2004. established through a Legal Act: RB Nepal, India CRF, Kerala SRF and Rajasthan SRF. The other five RFs have The World Bank was involved in supporting to some more fragile legal status as they were created through extent the establishment of three RFs: Assam State RF, secondary-level legislation: government order (Karnataka RBN and Pakistan RMA. RF), notifications (Pakistan RMA, MP RF and UP RF), and decision taken by the State Cabinet (Assam RF). The World Bank also provided assistance and advice during the preparation of establishment of Mizoram RF. The RF Bill has recently been approved by the State 5 Assam SRF, which was originally created to support routine Assembly and is to be submitted for consideration by the maintenance of rural roads, finances major maintenance works State Cabinet before being officially enacted. The (rehabilitation and upgrading). Karnataka Chief Minister's Rural legislation for Bangladesh RF has been drafted and is Road Development Fund, which was created to support about to go for consideration by the Cabinet. Sri Lanka "maintenance and upkeep of rural roads", allocates 70% of its Road Maintenance Trust Fund (RMTF) was legally revenues to major maintenance and upgrading of Major and operationalized in 2006 and has not completely adopted Other District Roads and 30% for rural roads. UP RF also gives a priority in financing of periodic renewal works, and road widening and strengthening. 3The original name is Uttar Pradesh Rajya Sarak Nidhi. 6 UP RF is not included in this analysis due to incomplete 4The original name is Madhya Pradesh Kishan Sarak Nidhi. information on its legal framework. Page 4 Transport Note No. 37 December 2008 Weak legal basis is aggravated by unclear or lack of management of RF resources and they are not engaged implementing regulations. Only the Legal Act establishing in planning and management of road works which rest RB Nepal and India CRF, and Notification establishing with DOR/PWD. Pakistan RMA are supplemented by additional Rules to clarify administrative mechanisms. Additional rules and While this is also the case for Nepal, RBN has, in regulations cover aspects for which more flexibility is addition, a special responsibility which is normally needed to allow their revision without requiring new assigned to a government organization at the national legislation. The other RFs do not really have clear and level. According to its legal framework, RBN is in charge sound legal frameworks as no additional Rules were of integrating annual road maintenance programs developed and enacted. This is also the case for Kerala submitted by road agencies such as Department of and Rajasthan RFs, which though created through Legal Roads, District Development Committees and Acts, do not have supplemental legislation and thus have Municipalities. That essentially means that RBN has to several important aspects (e.g., allocation rules) that determine the priorities for the integrated annual remain to be regulated. It is understandable to some maintenance program, a responsibility which should be extent why Assam SRF which is mainly a repository of vested to a road agency or Ministry that would cover both several schemes (e.g., PMGSY) does not need national and local road networks and would have the supplemental rules, as regulations of these schemes are technical capacity to prepare a strategic plan. already defined in their respective legal frameworks. However, the regulation for one of its revenue sources - There is no single agency or Ministry with this kind of role fuel levy ­ is not stipulated in any legislative document in Nepal because the strategic (national and feeder related to the RF. roads) and the local (rural and farmer roads) road networks lie within the jurisdiction of different road Beyond the soundness of the legal framework, however, it agencies reporting to different Ministries. As a result, the needs to be further assessed if the respective legislations function of formulating an integrated annual maintenance are being properly implemented. While this is discussed in program at the national level has been given to RBN detail in the next sections, it is worth noting here that the probably because of its strategic planning capacity and Roads Board Nepal Act and Rules are not fully since its Board includes stakeholders representatives of implemented demonstrating that a sound legal basis is not the various road networks maintained with resources enough to make a RF successful. The review also found from RBN (i.e. Ministry of Public Works, which is together that a RF can be successful without the expected level of with DOR responsible for the strategic road network and soundness of its legal basis (e.g., Pakistan RMA). However, Ministry of Local Development,8 Federation of Village this may be a short-term success and the risk of failure in Development Committees and Association of the long term is more important than when the legal Municipalities, which all three are together responsible for framework is sound. the local road network). Purchaser and provider split Pakistan is the only case where there is no clear separation of the purchaser and provider functions. Funds The separation between the purchaser (which is defined as for road maintenance are deposited in the Road a "financier") and the service provider (defined as a Maintenance Account managed by NHA, the National "provider of road maintenance services") is aimed at Highway Agency. Having both responsibilities for financial preventing a conflict of interests that may weaken financial management of road maintenance resources and discipline and compromise efforts to control costs and management of road maintenance programs, NHA is both maintain quality. This is a key principle of a 2G RF. purchaser and provider of road maintenance services. Essentially, RF Board and Department of Roads While procedures are being put in place in NHA to (DOR)/Public Works Department (PWD) should have a increase transparency in the planning system by setting clear delineation of responsibilities which should not up a road asset management system (RAMS) and overlap. A RF should not accumulate conflicting financial management is improved with the carrying out responsibilities, including funding, planning, procuring and of financial audits, this framework does not have the managing road works. In summary, a 2G RF Board should strength that would be offered by separating the be responsible for managing resources and financing purchaser and provider functions. maintenance programs and DOR/PWD for planning, procuring and managing road maintenance works. Measurable outputs and performance indicators The analysis of the available legal documents for RFs in RFs, like any funding institution, are expected to have a South Asia reveals that there is a clear separation results framework to monitor and evaluate the funded between the two institutions in most of the cases, except road programs. While there is general agreement that Pakistan. RFs purchase road maintenance/development the objective of 2G RFs is to ensure stable and adequate services and DOR/PWDs provide these services. The funding of road maintenance, the choice of the right responsibilities of RFs do not overlap with those of the performance (outcome-oriented) indicators to measure road agencies. The power of the RF Boards7 is limited to the achievement of this objective remains open to debate. Traditionally, the recommended performance 7 Three RFs do not have management boards at all: India CRF, indicator has been the share of the road network in good, Karnataka RF and MP RF. Management of RF resources is entrusted with India's Ministry of Finance and State Departments of Finance, respectively, who transfer the resources from the 8 The Ministry of Local Development consists of one department, Consolidated Funds to the ministries (in case of India CRF) and i.e. Department of Local Infrastructure Development and agencies responsible for executing road programs. Agriculture Road (DOLIDAR). Page 5 Transport Note No. 37 December 2008 fair and poor condition.9 The adequacy of the indicator is Governance and Accountability discussed later in the report. This section focuses on the existence, quality and reliability of performance indicators One key underpinning of the concept of a 2G RF is good in the RFs in the South Asia region. governance. Governance is enhanced through such aspects as autonomy and accountability of the Board, The research conducted for this study found that none of consumer/road user participation, transparency of the RFs, except RBN, has a results framework in place decision-making process and disclosure of relevant with relevant key performance indicators for monitoring information. and evaluation (M&E) purpose. No RF compares the program actually executed to the program planned for India CRF, Karnataka Rural Development Fund and MP RF execution. Comparison is limited to disbursements versus turn out to be financing instruments without any specific funds allocated. There may be several reasons for this: governance mechanisms built in the legal framework (i) the legislation gives limited power to RFs and the M&E other than the usual procedures for managing function is not stipulated, (ii) the RF does not have the Government resources: they have no management authority to request the institution in charge of managing board, no involvement of road users, no transparency in and executing road maintenance programs to provide decision making and no disclosure of information (very data on road network condition; (iii) if the RF has this limited disclosure of information only in the case of India authority, data may not be collected by the institution in CRF). The remaining six RFs have limited additional charge of road maintenance; and (iv) the RF does not governance mechanisms beyond those typically used in have the capacity to collect data to measure government institutions. performance. Board autonomy: Boards of South Asia RFs are not While the annual reports of RBN state that monitoring autonomous from their governments, which increases the and evaluation was conducted in relation to the two road risk of being affected by political interference. They are agencies funded by RBN, it is not clear what indicators (i) dominated by public sector representatives (all Board are used. RBN seems to limit M&E to the use of financial members are from the public sector in the Pakistan data as monitoring indicators because the annual reports case10) and (ii) chaired by top level public officials: either and website provide only information on allocations and the Chief Minister of the State (e.g., Assam and Kerala), actual disbursements by RBN by network, by executing the Minister or Secretary of the Ministry in charge of agency and by districts for routine maintenance and roads (e.g., Nepal, Rajasthan and UP) or the Chairman of recurrent maintenance. In addition, while the scope of a road agency/department (e.g., Pakistan). Since monitoring is limited, evaluation is weak. The collected Chairmen are top level public officials they are first data are not analyzed to explain discrepancies between accountable to their governments and second to the RF actual and targeted indicators, for example in the case of Boards. As a result, there is a risk that decisions taken by low disbursements. Boards have political influence and reflect the interests of the high ranking politicians or line ministries. In the current context of South Asia, indicators are usually collected by the DORs or road agencies but RFs Although RBN has more features of 2G RF than the other do not use the data. While the purpose of this study is RFs, it lacks autonomy and independence from political not to review the performance of DORs or road agencies, interference. Some of the key powers given to the a brief assessment is that not all countries or Executive Committee of RBN by the Legal Act are states/provinces have Road Asset Management Systems overridden by the government rules which regulate (RAMS) to store and maintain the data on condition of business procedures of government organizations. roads. However, they recognize that RAMS are a key tool Despite the Act providing RBN authority to allocate RF for road management and RAMS are being developed in resources, RBN has to receive authorization from Ministry several countries and should become operational soon. of Planning and Public Works (MPPW) before allocating resources to road agencies. According to the government A brief review of indicators used by DORs and road rules,11 only a sector ministry (MPPW in this case) has agencies found that often proxies are used for M&E the authority to spend what is specified in Government of purpose, e.g. (a) the percentage of funding allocated to Nepal's (GON) Budget Book. Decisions of the Executive the road sector compared to the needs or (b) lengths of Committee are also affected by the views of the political roads to receive different types of maintenance. This is representatives at the Board who are in a majority. The symptomatic of the way performance of road institutions local government representatives who dominate in the is measured: by outputs rather than outcomes. Board have managed to influence the Board decisions Outcomes are often considered as a by-product of a road maintenance program rather than a key strategic 10 NHA has two decision-making bodies: (i) National Highway element to define road maintenance programs. The Council whose basic function is to lay down national policies and review did not find an example of a country with a long guidelines to be followed by NHA in the performance of its term vision of where they would like the road network to functions and who has the power to direct and regulate the affairs be measured by an outcome indicator. of NHA, and (ii) NHA Executive Board who is vested with the general direction and administration of NHA and its affairs to exercise all powers, perform all functions and do all acts and things which may be exercised, performed or done by the Authority. This study covers the Executive Board only because it 9 The indicator applied to measure impact of funds allocated to is responsible for approval of RMA budget and maintenance road maintenance should exclude roads that received major program. treatments such rehabilitation, upgrading, and roads that were 11Management of public expenditure is regulated by the Financial newly constructed. Administration Rule. Page 6 Transport Note No. 37 December 2008 and allocate more RBN resources for upgrading and Boards with real autonomy even with the appropriate reconstruction of local roads despite RBN's priority to legal framework. financing maintenance. Lack of autonomy in RBN is not a governance issue at The assessment of RBN conducted by the World Bank in RBN level. It is a governance issue at the country level 2005 pointed to lack of autonomy in RBN as the key because of the government's reluctance of giving up the impediment hindering the effective performance of RBN. control of power and frequent political interference in The RBN Legal Act clearly states the composition of the decision-making process. This finding is supported by the Executive Committee (Board) assigning the seat of the Worldwide Governance Effectiveness Indicator (Figure 1). Chairperson to the Secretary of MPPW and a majority of This indicator shows that Nepal is second after seats to representatives of local governments. That Afghanistan in the region in terms of lower degree of assessment recommended an amendment to the Act that government effectiveness as measured by the quality of among other things would appoint non-GON Chairman public services, the quality of the civil service and the and adjust the size and composition of the Board to degree of its independence from political pressures, the improve balance of interests. While a draft Amendment quality of policy formulation and implementation, and the was developed almost immediately after that assessment credibility of the government's commitment to such in 2006 it was still under review by the Ministry of Law, policies. Thus, improvement in autonomy of RBN is Justice and Parliament at the time of this note. Whether expected to be closely linked to improvement in overall this will be enough to give real autonomy to RBN remains governance at the country level. questionable as few examples exist in the world of Figure 1: Government Effectiveness in South Asian Countries, 2007 0.20 0.00 -0.20 -0.40 -0.60 -0.80 -1.00 -1.20 -1.40 Note: The lower the degree of government effectiveness, the lower the country is on the graph, Source: Based on the Worldwide Governance Indicators, 1996-2007. http://info.worldbank.org/governance/wgi/index.asp Auditing: Auditing is promoted to a limited extent in the technical audits are often carried out by the road legal frameworks of almost all RFs under study. Financial agencies as required in their legal framework but these audit as one formal accountability mechanism is required audits are often limited to quality assessment and carried for all RFs except Karnataka RF,12 but a technical audit is out internally and not by independent auditors. required by the legal frameworks of only Pakistan RMA and Assam RF. Financial audits are either completed The information available on the audit subject is limited externally or by government agencies. Financial audits of and does not allow to determine if these mechanisms are Pakistan RMA,13 Assam, Kerala, MP14 are conducted by employed and how effective they are in improving the chartered accountants, those of RBN, CRF, Rajasthan RF, performance of RFs. Financial and technical audits of UPRF by the Auditor General. Pakistan RMA, while conducted, are always delayed limiting their usefulness in helping improve performance No requirements for internal controls are specified in the of both RMA and NHA. Financial audits of RBN are carried legal frameworks of RFs. It is implicitly assumed that out on an annual basis and their findings are discussed they are similar to the usual Government requirements and taken into consideration. for managing public funds. This review found that Transparency: Transparency, defined as allowing stakeholders to access information on the use of 12Insufficient information was provided on the legal framework of resources allocated to RFs, seems to be lacking in most UP RF. of RFs. The first step, which is expected to be made 13 These chartered accountants to perform a financial audit of towards transparency by the RFs (or the governments), Pakistan RMA are still appointed by the NHA Executive Board which is the main decision-making body of the RMA and NHA. is to make the relevant legal documents freely available 14 Financial audits of MPRF are conducted as part of Road to the general public/road users so that they can Development Authority by chartered accountants. evaluate the performance of RFs against their legal Page 7 Transport Note No. 37 December 2008 frameworks. This review found that only RBN published user surveys with the support of World Bank projects and its relevant Act, rules and regulations on its website. Acts it is expected that this practice will extend progressively creating other RFs in the region are expected to be made to the entire country. However, this has not been linked available by the department of the central government with RFs yet. with the responsibility for such disclosure. Legal documents at a lower level such as rules and regulations Fund Flow Mechanism are generally not made available to the public. One key characteristic of a dedicated 2G RF is to be a As for disclosure to the public of information other than separate fund, outside the central government's general legal documents, only the Legal Act of RBN15 and budgetary framework, that is financed from road user Pakistan RMA Rules16 require it, including publishing charges. Its resources are made available beyond the annual reports on their websites. RBN makes a wide fiscal year (non-lapsable funds), which is different from range of information (including allocations and actual the lapsable character of the government budget. The disbursements, maintenance plans and expenditures of benefit of such mechanism is to improve timely road agencies) available to the public in its annual availability of resources, such as before or after the rainy reports and on its website. Limited information related to season, which is critical for efficient road maintenance. It the Pakistan RMA (only revenues and expenditures) has also ensures the continuity in funding long-term contracts been found on the NHA website. In Nepal, not only RBN which are very frequent in the road sector, even for but also road agencies spending RBN's resources are maintenance, therefore reducing the uncertainty on the required to disclose the financial information, including availability of funds that translates in a risk premium and publishing their maintenance plans and expenditures a higher cost of contracts. which are subject to reviews by road users. The budgetary procedure can become an obstacle for Disclosure of information on Indian RFs is not stipulated timely availability of funds as in many cases procurement in their legal documents. And indeed, very limited of contracts cannot start before the annual government information is available on the RFs on internet and no budget is approved. This causes bunching of procurement annual reports have ever been made widely available to resulting in delays in agencies with weak capacity and in the public. However, this situation may change as the inadequacy between the contractual period of execution country's Right To Information Act passed in 2005 and the technically adequate period of execution. Timely mandates universal access to and the disclosure of availability of funds also ensures that contracts are information by all public entities (which include RFs) executed during the contractual period of execution. Very wherever it is in the public interest. often, governments overcommit funds in their budget which results in unavailability of funds, longer period of Involvement of road users: One of the key objectives execution of contracts and ultimately much higher cost of of setting a 2G RF is to have the voices of works. consumers/road users heard and their opinions taken into consideration in decision-making process on road Most of the RFs under study are non-lapsable RFs (Table planning. While some of the Boards under study have 1), which means that funds can be carried over to the one-two representatives from a truck or other next fiscal year if not spent in the current fiscal year. The transportation-related association, these representatives exceptions are Karnataka and UP RFs which cannot are not as active and influential as public sector officials transfer unspent resources to the next fiscal year. RBN is who, as mentioned earlier, dominate and keep the a unique case because it has both lapsable and non- control of the Boards' decisions. Often, representatives lapsable resources. from road users have limited understanding of their role and limited capacity to provide meaningful inputs in a Table 1: Lapsable and non-lapsable Road Funds rather technical domain even if they have the willingness to fulfill their responsibilities. Training is not provided to Lapsable Non-Lapsable strengthen this capacity as this would upset the balance RBN: revenues from fuel RBN: other revenues which of power between the public sector and road users. levies which are transferred are deposited to RBN through MOF account directly Consultations with stakeholders, including road users, or Karnataka RF Pakistan RMA road user surveys to discuss the operation of RFs do not Uttar Pradesh RF India CRF seem to be taking place in most of RFs. Only RBN and Assam RF Pakistan RMA have recently started conducting a road Kerala RF user survey and stakeholder consultations, and plan to Rajasthan RF continue conducting these on a regular basis. In India, NHA17 and several states18 have been carrying out road Madhya Pradesh RF 15The RBN Legal Act states that "if any person desires to obtain the statement of income and expenditure, balance sheet and annual report of the Board, he may obtain copies thereof ...". 16The RMA Rules require the Road Asset Management Directorate to post the annual report and audited accounts along with the auditor's report relating to the RMA on the NHA website and http://www.thehindubusinessline.com/2006/05/18/stories/20060 make copies available to the public." 51804010700.htm 17 The Hindu Business Line. "Rash driving, high-beam lights irk 18 Including Gujarat, Himachal Pradesh, Karnataka, Orissa and road users: NHAI survey". May 17, 2006. others. Reports are available in the World Bank project files. Page 8 Transport Note No. 37 December 2008 Revenues collected from fuel levies and transferred India CRF and Rajasthan RDF; road tolls ­ nearly 10% in through the national treasury are lapsable and can be Nepal but 66% in Pakistan (Figure 3 and Figure 4). The used within the first four months of the next fiscal year at other sources include vehicle registration charges (40% the latest. Revenues collected from road tolls and other of all revenues in Nepal), police fines (10% in Pakistan), sources and deposited directly to RBN account can be sales tax on agricultural produce (Karnataka and MP), transferred to the next fiscal year if not spent in the fees for conversion of agricultural into non-agricultural previous year. land (Karnataka), motor vehicle tax (Kerala), and others. Adequacy of level of resources for maintenance However, often most of the sources of revenue which are specified in the RF legal framework are not used. For One key objective of a 2G RF dedicated to maintenance is example, Assam RF, which is to be funded from 11 to secure an increase in financial allocation to sources, is in fact funded exclusively by grants from the maintenance. With development of roads often being a State Government's budgetary allocation for top priority on the political agenda, maintenance while maintenance. All of the concerned RFs have the being recognized important has not only been possibility of being funded from their governments' underfunded but also has frequently witnessed decline in budget, but RBN is the only one that does not receive funding. Thus, increase in maintenance resources has budgetary support from the central government. While often been the main rationale for establishing a 2G RF. Government of Nepal does provide grant support for road maintenance, allocated funds are transferred directly The data from Pakistan RMA show that there has been a from the Ministry of Finance (MOF) to road agencies not substantial increase in revenues from two major sources to RBN. RBN has no control over these funds. As a result, of funds for maintenance - tolls and government ­ this undermines the oversight role of RBN and impedes (Figure 2). Overall maintenance funding has increased efficient management of all resources available for since the establishment of RMA in 2003. However, there maintenance of roads in the country. was a decrease in government grant in the last year. Apparently, after noticing an increasing trend in All RFs, except the Pakistan RMA, receive their resources maintenance revenues channeled to RMA the government transferred through national or state treasuries. This has decided to reduce its support to road maintenance channeling mechanism is typical not only for RFs, which and let RMA rely on its own sources of revenues. are financed from central government schemes or State Government grants (e.g., Assam), but also for those Sources of revenues which are mainly financed from user charges (e.g., fuel levy vehicle registration, cess on agricultural produce). The RFs under study have various sources of revenue, There was no mechanism found in the RFs to consolidate including road user charges and government budgets. the amounts collected at each step of the process The most common off-budget sources of revenue are fuel (amount collected by MOF versus estimated revenues in levy and road tolls. Fuel levy (or cess) represents 50% of the budget, amount transferred to the RF versus the total RF revenues in the case of RB Nepal and 100% in amount collected by MOF). Figure 2: Level of Maintenance Funding Before the Establishment of Pakistan RMA in 2003 and During its Operation 2003-2007 14,000 12,000 n 10,000 illio 8,000 M.sR 6,000 4,000 2,000 - 2001 2002 2003 2004 2005 2006 2007 Gov grant 520 787 825 863 3,074 4,816 2,424 Tolls 2,168 2,290 3,435 3,492 4,534 6,295 6,619 Total 2,953 3,459 5,372 6,055 8,724 12,486 11,807 Gov grant Tolls Total Source: Based on the data from NHA Business Plan 2008-2012. Note: The data was adjusted to 2000-2001 prices using the inflation rate in Pakistan. Page 9 Transport Note No. 37 December 2008 Figure 4: Sources of Revenue of Pakistan RMA, The revenues collected from road tolls have been found Average for 2003-2005 to be the only kind of revenues which are always deposited directly to RF's accounts. While they constitute Others, 1.5% a minor (10%) share of RBN's resources, they represent a lion share (over 60%) of RMA's resources (Figure 3 and Police fine Figure 4). Other resources of RMA including fines collection, collected by police and proceeds from bid sales, weigh 10.4% Gov. grant in stations, right-of-way commercialization collected by aid, 19.7% NHA, all go directly to RMA. The cost of collection is Income from deducted from collection revenues but there is no weight assessment of the collection efficiency (reasonableness of stations, 2.6% cost, leakages). Several reasons may explain why road tolls (and other minor off-budget resources) are deposited directly to RFs' accounts while fuel levies are always directed to RFs through MOF. It is a current practice everywhere in the world for concessionaires of tolled roads to collect tolls. Also, amounts of road tolls revenues are significantly less Tolls, 65.9% than those from fuel levies. Since fuel levies generate substantial amount of revenues compared to tolls the governments are reluctant to release the control of fuel Source: Based on the data from NHA RMA Financials during 2003- 2006 levies revenues. In some countries, fuel taxes represent a significant source of revenues for governments and Allocation of the Proceeds of the Road Fund Ministries of Finance (MOF) want to keep record of revenues from fuel levies in the national accounts, While the principles of 2G RFs do not provide specific especially if a fuel tax is partly transformed into a fuel levy. guidance on allocation of Road Fund resources among MOFs do not want this transformation to impact negatively networks, it is a practice found in several RFs across the on the national accounts as this could be interpreted as an world to have allocation rules per type of network. The unjustified change in the country's economy. rationale, especially in the case of the fuel levy, is that because road users on all road networks contribute to the Funds allocated to RFs are usually channeled through RF levy, thus, for equity reasons, all road networks should accounts before being transferred to road receive in return a portion of the RF resources. departments/agencies. Only in the case of RBN, despite Theoretically also, allocation rules mitigate the risk of the Legal Act provisioning for funds to be channeled political influence on allocation of RF resources for through RBN, they are allocated directly from MOF to different types of works and types of network/road. road agencies. Rarely do RFs use commercial bank Political influence might translate in instability in terms of accounts. Most bank accounts are in state banks, which level of resources allocated among networks resulting in often is a limitation in terms of efficiency and quality of lack of sustainability of these networks. services. For example, some state banks in India do not provide consolidated statements as required by financial Allocation rules by type of network/road are defined in auditors. the secondary legal documents of most of the RFs, except Assam, Rajasthan and UP RFs. All of them give Figure 3: Sources of Revenue of RBN,19 Average for priority to NHs and SHs and actual allocation seems to 2003-2005 comply with the rules in most of the cases. For instance, RBN allocates 70% of its resources to the Strategic Road Network,20 which has about 70% sealed roads, and 30% Vehicle to the local road network managed by District registration fees, Development Committees and Municipalities. Box 1 39% details the allocation rules for India CRF. Fuel levy, 51% Some RFs use different allocation rules by type of work instead of by network. This is the case in the Rules and Regulations or other supplemental legislative documents of three RFs (RBN, Pakistan RMA, and Karnataka RF). The rules give priority to types of work which were earlier Tolls, 10% under-funded and were the main reason for the establishment of several RFs: for example, routine Source: Based on the data provided in World Bank's report on maintenance in the case of RBN and Pakistan RMA and Assessment of RBN, 2006 development of roads in the case of Karnataka RF. Actual use of RF resources seems to comply with priorities assigned to the RFs. As far as the other Indian RFs are 19 Despite the RBN Legal Act stipulating that the government concerned, their respective legal documents either do not grants to be channeled through the RF account, the government grants do never go to the RF account and always allocated define what type of works should be prioritized or they directly from MOF to road agencies. This weakens the oversight explicitly state that State Governments can allocate RF responsibilities of RBN, as it does not oversee the large amount of money directly allocated by MOF. Road agencies are not required to submit plans and publish their expenditure program for funds 20Strategic Road Network comprises NHs and feeder roads received directly from MOF. connecting local roads with NHs. Page 10 Transport Note No. 37 December 2008 resources as needed. As a result, priorities are often MAIN FINDINGS given to types of works (e.g., widening and strengthening instead of maintenance in the case of UP, The main findings of the review based on the comparison consultants' fees in case of Kerala RF), which were often between RFs in South Asia and the seven criteria not the primary reasons for the establishment of a RF. characterizing 2G RFs are presented hereafter: i. Only Roads Board Nepal can be characterized as Box 1. Allocation formulae in India CRF being close to a 2G RF as it has more features of 2G RF than the other eight RFs subject of the review. Rs 2.00 per litre is collected as cess both on petrol and High Speed Diesel (HSD). ii. Most of the RFs currently operating in the region finance development of roads, and only RBN and a. Out of the Rs 2.00, the cess amount of Rs. 1.50 is Pakistan RMA are dedicated to financing of routine being allocated in the following manner: maintenance. (i) 50% of the cess on HSD (of Rs.1.5/liter) for iii. All Indian RFs finance development and/or major development of rural roads/PMGSY.21 improvements of roads despite some of them having (ii) 50% of the cess on HSD (of Rs.1.5/liter)and petrol been established to fund maintenance. (Rs.1.5/liter) are there after allocated as follows. · An amount equal to 57.5% of such sum for the iv. Overall, RFs have a weak legal basis with the development and maintenance of NHs exception of RBN and Indian CRF. Even in these two · An amount equal to 12.5% for construction of road cases, the legislations still lack provisions for proper under or over bridges and safety works at unmanned implementation. railway crossing; · An amount equal to 30% on development and v. There is a clear separation of the purchaser and maintenance of State Roads. Out of this amount, provider functions in all RFs, except Pakistan RMA, 10% is kept as reserved by the Central government where the same organization ­ NHA ­ administers for allocations to states for implementation of state the road fund resources (RMA) and maintenance road scheme of inter sate connectivity and economic works financed from those resources. importance. vi. None of the RFs use relevant performance indicators b. The remaining cess of Rs. 0.50 per liter, both on HSD for monitoring and evaluation purpose. Only RBN and petrol (out of the total of Rs. 2.00) is entirely uses financial data for the monitoring purpose, but allocated for development and maintenance of NHs. little analysis of these data is carried out. In summary: vii. Three out of 9 RFs under study ­ India CRF, Rajasthan and MP RFs ­ do not have management Petrol, HSD, boards. Scheme Rs/litre Rs/litre Development of Rural viii. The Boards of the concerned RFs are not roads/PMGSY -- 0.75 autonomous from the governments and are Development and potentially at risk of political interference, as they maintenance of National 0.86 0.43 are chaired by a high ranking public official and Highways (NHs) +0.50 +0.50 public sector representatives constitute a majority. Construction of road under or over bridges and safety ix. Road users participation in the decision-making works at unmanned railway process is very weak because it is limited to crossing 0.19 0.09 including in the Board one-three representatives Development and from a truck or transportation-related association maintenance of State with limited contributive capacity. Highways (SHs) 0.45 0.23 x. The extent of RF's accountability is limited to the Total 2.00 2.00 completion of financial audits, with no disclosure of Source: Department of Road Transport and Highways. "Annual legal documents, annual reports with financial data Report 2006-2007." Ministry of Shipping, Road Transport and Highways. Government of India. or reports on execution of programs financed by the RFs to the general public and road users. xi. RBN is the only RF where accountability and transparency in resource allocation is a legal requirement and is enhanced in relation to road agencies spending RBN's resources. xii. Fuel levy is a major source of revenue for RBN and most of Indian RFs, and only Pakistan RMA is not financed from this source. 21 PMGSY stands for the Pradhan Mantri Gram Sadak Yojana xiii. Potential sources of revenues for most of the RFs are (PMGSY), which was launched by the Government of India to provide connectivity to unconnected rural Habitations as part of a very diverse in addition to traditional fuel levy and poverty reduction strategy. Page 11 Transport Note No. 37 December 2008 budgetary support but most of these sources are not include other aspects, besides financing, such as used with the exception of road tolls. partnership between the public and private sectors, strategic planning, technical and administrative role xiv. All RFs receive their revenues transferred through of the executing agency, investment and operations national or state treasuries, except for road tolls aspects of road maintenance. An accountability collected by Pakistan RMA and RBN. framework has to be established of which RFs are only one element. This review has been limited to xv. A majority of the RFs, except Karnataka and UP, are the RFs in South Asia and further analysis of service non-lapsable and can carry unspent resources over providers (DORs/PWDs) would be required to have a to the next fiscal year. comprehensive assessment of the current governance and accountability framework for road xvi. Allocation rules by type of road or network are maintenance. stipulated in the legal framework of most of the RFs, while allocation rules by type of works are stipulated RECOMMENDATIONS in the legal framework of only three RFs: RBN, RMA and Karnataka RF. This study suggests that the following recommendations be taken into consideration by the Bank when revising its Annex 1 summarizes the characteristics of the RFs in transport policy strategy in the region and advising the South Asia based on the seven criteria used in the governments on setting up Road Funds: review. · The establishment of a RF is an appropriate LESSONS LEARNED answer when there is a budget system failure. However, even when there is no budget failure, the Three main lessons were drawn as a result of this creation of a RF or a similar funding mechanism assessment and are presented below. Despite the fact (e.g., Pakistan RMA) may be justified. When that they are based on the experience of the South Asian revenues come from road user charges and other countries, they can be found relevant and applicable various sources it is critical to ensure that (i) all worldwide. resources are consolidated in one account, (ii) these consolidated resources are efficiently and · Improved governance at the country (or state) transparently managed by an institution that has a level is one of the key success factors for sound FM system, and (iii) revenues coming from effective performance of a RF. As the Nepal road user charges are allocated to the road sector for experience shows, although RBN was established which services road users pay. through an Act, its status is vulnerable and decisions are not always implemented properly in compliance · Assessment of governance should be conducted with the legal framework because of lack of good at the country level before promoting the governance at the country level. Thus, it does not establishment of a RF. The lesson learned from matter which legal instrument ­ Act or Rule or the experience of RBN is that much of the RF's Notification - is used to establish a RF, governance success depends on the degree of governance in the mechanisms must be enhanced to secure soundness country and/or state. Assessment should help of the RF's legal basis and its proper implementation. identify weaknesses in the national/state system, which may threaten or undermine the effective · Fuel levies are never deposited directly to the performance of a newly established RF, and RF account. This reflects the political economy of recommend measures to mitigate possible risks road maintenance financing using a fuel levy. The which may result from these weaknesses. experience of RFs in South Asia only proves what has Establishment of a 2G RF should be encouraged only already been observed in other regions of the after governance issues are addressed at the country world:22 collected fuel levies are often deposited to level; otherwise the risk is higher that the principles the national or state treasury and later transferred to of a 2G RF will not be followed. RF's account. It should be recognized that governments are reluctant to release the power of · Priority should be given to achieving good controlling the inflow and distribution of revenues governance of the RF and its Board. It is often from fuel levies because they bring a much more expected that the establishment of a RF will lead to significant amount of revenues than road tolls and an increase in road maintenance resources. While other types of user charges. This is even more true this may be one of the positive outcomes, this should in an environment where the price of oil is very not be treated as the ultimate goal of establishing a volatile and is expected to stay high with significant 2G RF. It is improvement of governance in consequences on the countries' economies. The management of resources which should be political price of increasing the price of fuel to include considered as the key objective. By improving a fuel levy is felt much higher by Governments than governance in resource management, resources are the benefits from maintaining roads using revenues used more efficiently and not diverted for political from a fuel levy. purpose. The maintenance funding constraint will not be resolved if the level of resources has increased · RFs cannot be the only institutions held but is still used for different purposes than specified accountable for the management of roads. An in the legal framework. Good governance, in overall road management framework is expected to particular transparency and accountability, of the RF and its Board can be considered equivalent to an 22Independent Evaluation Group. "Evaluation of Bank Support for increase in the level of maintenance funding. This is Road Funds." 2007. The World Bank. P.18. key for securing sustainability and adequate levels of Page 12 Transport Note No. 37 December 2008 additional resources for road maintenance. This can level: (i) projected revenues from fuel levy, (ii) be achieved through, for example, setting up a revenues actually collected, (iii) resources budgeted sound Financial Management system, improving by the RF; and (iv) resources actually disbursed to control systems through financial and technical the RF. audits and improving reporting mechanisms. · The designation of the road institution in · A political economy analysis of road charge of monitoring the quality of the road maintenance is a prerequisite before network needs to be clarified. A RF is first of all considering a financing mechanism such as a an institution with a financing role. It is established Road Fund. This will guide in understanding the with the mandate of providing sustainable funding agenda of the many stakeholders and in identifying for maintenance. The mandate of monitoring the those who can support or oppose the various quality of the road network has been given to 2G RF characteristics of a 2G RF. This will help assess the in a context of weak road agencies, based mostly on feasibility of a Road Fund. Particular attention should the African experience. In a context of stronger road be paid in the political economy analysis to road agencies with efficient road management system, maintenance financing. For example, while some the RF, like any other funding institution, may may oppose the use of a fuel levy because of macro- request the executing road agency to set up a results economic principles, it may be found that it is easier monitoring framework and/or to be provided with to create a fuel levy than to increase a fuel tax. The access to the database on condition of roads to political economy analysis is the tool to arrive at an assure that its funding has been used for the agreement on the RF and road financing framework specified purposes and the condition of the beyond the vested interests of various stakeholders. maintained roads has improved as planned. · Where the road agency has good capacity for · Governments should continue providing road management, the RF can concentrate on budgetary support to road maintenance. The management of resources and focus more on target of collecting revenues from road user charges its role as financial institution. Thus, road users at the level adequate to meet the financing needs should be more involved at the level of a road has proved to be difficult to achieve in most agency that manages road assets, while countries. This is likely to become even more difficult representatives from other financial institutions in the future because of the increasing price of fuel. (Central Bank, development banks) and Ministry of Since roads are a public good which have to be Finance should be involved in management of the RF provided by the government for its citizens who have to improve and strengthen its FM system and an equal right to access economic opportunities and capacity. Putting the RF under the authority of the social services, it is acceptable for the governments Ministry of Finance rather than under the sectoral to contribute as one of the sources for road Ministry (e.g., Ministry of Transport or Public Works) maintenance financing. With the increasing may also be considered to increase autonomy vis-à- constraints in mobilizing revenues from road users, vis the road sector institutions. the role of RFs will likely become to supplement Government budget but not replace it. This should · The creation of a RF should be considered in be clarified in discussing with Governments the parallel with development or strengthening of creation of RFs as the experience has shown that the road management capacity of an executing some governments do not allocate any more road agency (DOR or PWD). While the present resources to road maintenance when a Road Fund is review did not cover this issue in depth, the created, based on the assumption that the RF experience of RFs in other regions of the world becomes fully responsible for financing road shows that successful performance of the RF (or maintenance, even if this assumption is not realistic. specifically full disbursement of allocated resources for maintenance works) depends much on the · User fees should not be used as revenues of a capacity of the executing road agency. This issue development Road Fund. The practice of using should not be ignored but receive equal attention user fees for development RF violates the principle of along with the establishment of a RF because the equity as well as the fee for service concept of 2G success and performance of the overall road RFs. Since a road is a public good, for equity reason maintenance framework requires that both the RF its construction and rehabilitation (as a result of the and road agency have adequate and strong capacity. government's failure to maintain it) should remain the responsibility of the government through the · An accountability mechanism should be budget system. The exception can be when a road is developed to ensure that all revenues collected constructed under PPP and it can be considered a from fuel charges and designated as RF private good. In this case it is macro-economically resources in accordance with the relevant legal acceptable for its construction, operation and framework are transferred in full from the maintenance to be financed to some extent by road central treasury to the RF account. When the fuel user charges. If all road users are requested to levy cannot be transferred directly to the RF account contribute through road user charges to the and must transit through the Government treasury, development of new roads, only some of them will as this is always the case presently in South Asia and eventually benefit from these newly constructed, most RFs in other regions, efforts should be made to improved or rehabilitated roads making financing of develop such an accountability mechanism. The road development inequitable. Maintenance is not a following monitoring indicators may be used in the public good, it is a service required as a result of accountability mechanism; the first two are at the using the road by road users (including government, MOF/treasury level and the other three at the RF public and private users). That is why the fee-for- Page 13 Transport Note No. 37 December 2008 service principle of a 2G RF is acceptable in giving Board from diverting resources to new priorities different road users the responsibility to pay for using the from those specified in the Act/Law. The inclusion of a road. provision on allocation rules by type of road/network in the Legal Act would secure sustainability of financing for each One could argue that the equity concern is irrelevant in type of network, ensuring that it receives its share of RF a country where the infrastructure deficit is huge and resources as specified every year. This is because the number of development projects is such that most amendments to a Legal Act are not approved so frequently road users end up benefitting from these projects. This and easily as supplemental rules and regulations can be is the case, for example, in India. However, the CRF revised. represents a minor share of resources allocated to development, most of the resources coming from the · Decisions on the allocation of resources by type Government budget. Thus the equity concern remains of work for local road networks should be as the number of development projects financed by the decentralized and not made by the RF. Decisions CRF remains relatively small. For Indian States, the CRF regarding allocation of resources by type of work for is an incentive to allocate resources to road local road network should not be made by the Board, infrastructure and has had a positive impact in this which normally do not have any representatives from respect. However, this could have been achieved with local communities but a couple of local public central government resources without using road user officials. These few local officials do not represent all charges. Thus there is no clear evidence that a road local governments and can easily influence the development fund financed from road user charges is a decision of the Board to receive financing for those solution to allocating more resources to road works which would satisfy their political needs and development. interests. This right for allocation by work for local networks should be given to local authorities. · Allocation rules by type of road/network However, they should still be reminded that routine should be defined in the Legal Act not in maintenance is still a priority and that other types of additional rules and regulations which are considered works can be financed after routine maintenance secondary after the country's Law. This will prevent a receives adequate funding. 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Department, and Guang Zhe Chen, former Transport 14. Department of Road Transport and Highways. Sector Manager, to whom the authors are indebted. "Annual Report 2006-2007." Ministry of Shipping, Road Transport and Highways. Government of India. 15. Department of Road Transport and Highways. "The Report of the Working Group on Roads (2007-2012). For 11th Five Year Plan." Ministry of Shipping, Road Transport and Highways. Government of India. 16. Ministry of Road Transport and Highways. "Road Development Plan: Vision 2021." 2001. Indian Roads Congress. New Delhi. 17. Eleventh Plan for State of Rajasthan, Chapter 18: Transport and Communication. Worldwide: 18. Benmaamar, M. "Financing of Road Maintenance in Sub-Saharan Africa. Reforms and Progress Towards Second Generation Road Funds." Discussion Paper No. 6. Road Management and Financing ­ RMF Series. September 2006. Washington, D.C.: The World Bank Group. 19. Brushett, S. "Management and Financing of Road Transport Infrastructure in Africa." Discussion Paper No. 4. Road Management and Financing ­ RMF Series. March 2005. Washington, D.C.: The World Bank Group. 20. Gwilliam, K. and Shalizi. Z. "Road Funds, User Charges, and Taxes." The World Bank Research Observer, vol. 14, no. 2 (August 1999), pp.159-185. Washington, D.C.: The World Bank Group. 21. Harral, C. G., and Faiz, A. "Road Deterioration in Developing Countries: Causes and Remedies." 1988. Washington, D.C.: The World Bank Group. Page A1 Transport Note No. 37 December 2008 UP X Gazette notiacfitioN tid & Au o X X X X nFi cheT X X X inf foni foni No oN oN lebaspaL X X No tid X Actl & Au X X X jasthanaR nFi Lega cheT X X X X X lebaspla-n X X No No MP X Gazette notiacfitioN d d tid & Au X Boar Boar oN oN nFi cheT X draoB X foni No oN X X lebaspla-n X No No X Actl & ti X X X Kerala nFi cheT X X X foni Aud Lega No oN X X X Non- pla lebas nte d d el X mn e X X Boar Boar X draoB X X X X Order Karnataka oN oN Non No Lapsab Gover X X X X X cheT tsi & X X X X X X X Assam nFi Aud Non- pla lebas & l d d d F X CR Actl onaiti s & ti X X Boar Boar cheT X Boar X X X X lebas X Rule RF. iasA Lega add oN oN nFi Aud No oN Non- pla ni thuoS & sel lai thiw to e A Rul tsi noi soon ers ni MR Cod X X X X cheT nancif onaiti & X X nFi Aud data tatl us tedi acelp lebaspla-n entserp RFsfo NHA notscisti add road Lim Consu take No terc s & l tid & e orts r Chara sticri s tak on omfr r fo s & use el X te BNR Actl onaiti Au l X X X so Rule nFi ntse rep to Lega e esu vyel X es;ivel other RF; Except Lega add cheT Road docum acpl fuel lebaspla-n ni fuel for arachc No annual survey reven Lapsab No nt ese of l lic rts kc e le to on of of eni onaiti catorsi ty l poer tru yl as prscisti RF fusedi el l ework: non-pub lega dna type type mmaryuS add andr ndi dr asa d vetia lacinhcet tabili nual t oard th users direct of lapsab krowe lega acter outr & by un an or B ortpp bess yb yb ni to ce framl w Boa r ent RF's ns hasec E omrfsevi wis deti eno su les les mance vesi Boar of & on road cesr rce 1: ru ru Char: x de nte on e of as non-ro work lega reg- pur rfor me ctoes deri res acco nte ntat cha nuese marflagel cati Act/Lal M&r & rep mssin ntse pe ese transpr oniati posed vyel nm el rces resou souer oni oni : rev in nneA oftli redi fo etaiv tyi &liacnaniffo asst e osurlcs entats othe account RF cato cato Criteria Ded maintenan Sound Lega rules Sp prov Key used Manag Pr repr major Board sector Us audi mecha Di docum Repre or assoc ontiatulsnoC surveys Funds RF Fuel resou Gover of Other l vye Lapsab All krow All road/net framework Notes Page A2 Transport Note No. 37 December 2008 to or d ent, and and an and mot annedlp and se ngdiri e th of PRQI, in noi recurr d het cost ways ate nt sect , roa m for nce sourc nance ysa ion St and e th routine of frosll d rat fun tenani ghih any l s the PR mainte paveme or to elb oper er ma nao evenle as nis ri , hwgiHl ad out of na of roadl nati the coat und onai ro works oni stai urce of many rura Nat carry e eapehc su so of project ngi as ep tyili udl lawen aro work pte eto To ): nancetni ectlloc edi ithw m nci re ch and prov elb cure nance fro fac s exc pat ther se ntei ma gni kepu by sd on to icea ma Funds and road State ngi roads English dna dna roads in ri oniti :e rves e d cross of nce ansportrt of t het et all roati of includ ex tne paer osp s stabl an ry het en sta tenance,ni for m mir bsitew a wayil toi d road ent ra ntenai ni eas of ma and e at pos pmol gni ch ncye fo ent roa the th pmol re ma ntse veed arl for RQI),P( en oa state translation on surene A ent for rura al erg me meg the ent no n keep to ing deve safety appr ort: stme e th velopm to ) r r:ed of ort:p me report: rengthst d re gni Asia offici( an arran /Mission ngiylp uctio fo rep Or nvir ni der d ce fund fo fo mfort ent nte noi an improv Actl South c,idoi 2003:sel an eslci Introd col Ru nsoi Act: em tant'sl l nm Act:l tant'sl Act:l tant'sl yt udlcnil ning A in Source Lega per make veh ED's( maintenan trave RM operat Lega improv Consu Gover Lega Consu upgradat Lega nsuoC quali deiw nne State tu a RFs of t of r b of or t road of en ablest and and for en tsn fo tyili and nanceetni y roads, e cure ngi hwaygih ec m fotn eas ing fac fund arl gni th idgerb er-pa ions qu grad tr ra new en roads e ma se l us ,e nanetn ove emeri tenanceni nceanetni fund impr ona ngi a ru up ma ma ni of rving of a,e miss establishm uatq the e mai cas th elpi rela tablishmese t,n of nati and cross and transpo oni ese ". d for and and fors oadsr strength pr for ade for the an an gni ugho rp inc uatqeda ys e urce ral het roads uctr d e of tn yawil nanciif so ru lopmeev of nst an nanceetni on thr ice an urc ra need ardob ni ihdiNihidrvihbA RFs hs nanc of de and emhtfo fund s so ce pmeo ghwaih re co ma at huge e serv t ntei oadsr ze ep ngid ngid roads of reasons of edi ntse tablise e road kr vel l bili thete s all prov de ona ma ngi upke upgra ning ngi safety mee mo me statuary stme support support ent Major To sourc of fee-for- To stable maintenan netwo For nati of To for exist To and To a nvi project To and To deiw support exist assets To ehtsaRirtn enped" i. dh Ma Ni of t blishm en mh estar ayhkuMs' as"ytili mosrollafo fac niotainb Nidhi. Sarak n port Sarak fo blisat moc shaiK Year es 2002 2003 2000 2003 2004 2002 2000 2004 1998 ertsiniM "trans ons in t ief seni Ch dieifceps Rajya esh h Prad esd reasro d en def mh aro Act dhya Prar Ma Utta maj involve blisat is is s s s Fund e e WB es Ye Ye oN Ye oN oN oN oN oN akatanraK is and e Road naml naml of teaD Board unto tn d al Road d Road Fund atetS daorrolennutro inagi inagi or or s Acc l Roa fei Roadl Fund pmeo raeK 2: RF )N tra e e Ch a Road nce Rura eshd The The Stat Road State vel RF)SPU( manlaingirO The egidrb of Road Cen Stat Pra eshd c De : (RB tenani (CRF) (ASRF) pmento Pra a: al (KSRF) a (RSRDF) Fund a. b. c. d. Annex pale Country/State: Name N paleN stan:ikaP 'srestin RRDF)M dhy Ma (RMA) Indi Fund Assam Fund Karnataka Mi Devel (KC Kera Fund Ma Farmer's (MPFRF) Rajasthan Road Fund Uttar Road Page A3 Transport Note No. 37 December 2008 dna ms gulations ling noitiprcsed rof d e th of el 2003, seiv ton on fu e sle re ni ngid for es Re cting s/e liatr Act Ru gni e 2002 th A edur A, 2005 Colle channe mechanis Pa i n RM Standard Operat Proc RM ni ngitcelloC smin mecha d edbircse sourc depen ngi Act )(i earlcnu) the fund (ii vyel Rul or for sel oni oN 6) ru d creeeD se etwork xe Roads 0BS already sources RF an is rul /n catolla ni Ann Act, road in 206sel 2007 e by thr s, rea fo Low, w/ of oni atedl Ru 2003sel caus edni ngi Ru be La etails cato Rule A rm mudieM fund ll, In Allocation type (d All stipu Board RM FRC No, rules dete of Fu se of ls e les les by era ru eral yda rul Ru iblg esu ingd e ence (detai )6 Eli s fun typ AMR caeb iture noi edni of rm se RFsi ndepe Annex ocat th ndi Allocation for works in Yes NHA 2003; Expend Yes No, all are dete sourc for of by tori on by as by or by by of and no s: by t velsle nciala chnical tdi t on Aud ent uditorsa Board tdi elbat l seluR en audil fin te au au puer m fir tdiua rell are ti latiu tdi untant au co PWD; lai of la emir tid 2003:sle uditalai ntantsu eiv l ac cai Ru acco dna l derih Board tro Reg nc i ec Gen lai chn de d ent Execut cain t,n laic den l eiv emiruqer Audl de te DOR/ gular naFi Off Re and auditing 1. the NeplareneG quer aul cai AMR ntei onais Comp cai and toriduA No swlayB eri the em .2 techn AHN nancif)(i ndepe the NHA Tech pe 1. charter appo ndi by of 2. deni profes duaividni naniF tori a on inancf Execut )(i the Aud Indi i)i( Techn Rules )(i charter or i)i( ry,stin sFR requ Mi syst tcA l FM ni in is on ni lai si e ent es eniL nte of morf d e gal b cause ed ed the be of cause at but Financ centra nde gema Le lareneg lareneg nancfi becau nca myo be m e nts, base system dep is gintnuocca ccepta dna the of oni metsys fro mro omrf enc ipulst emtsys me omrf FM e for by , ent manlai auton s, tn rf Ye nde not M s, tn em as d nt's pe den si docul F on tnedn PW Ye den part y on syst ing nei AHNfo me dnatne pe Indep pe pe FM stani gn causeb,oN taxatl sey rae FMtnedn ndepe nancif pe Financial 1. i den taxati 2. system lega itlae laniotanret gen ) ndi ent the r deni DOR/MP 1. deni taxati 2 . in standards Pak report mainta Wi No, govern )(i on (ii deni are ndepe ive by hmsilb lyina is s yb l l is and for ,y D and and lar RF ntse ndi staff m d ecutxE m public ntra WP inted vetia po MDAR a d Federa Ce CRF ive an of of velel neeG as taserof e oni e Boar by e monotua and a ap eht res us gn rrangeal caus si draoB ent d ion nt istratn nistrativei be ngisi d nte nte rep dene ecab m eiv mn causeb mn me admi (acti onai taxatl kr ctorer utti Adm autonomy Low, Di eht compr sector No, mocer elbisn stratin Execut approve Gover No, Gover respo admi manage Low laniotuittsin ghihebecaus slaic offi teuttisnoc Body Board) inst neraeg ewo nda omfr marfl by ro of , Of n l e by ee w enc Establis hed La Decr sdaoR s Act e 2002 staik Board Act Govt. Pa tiacfitioN AMR on NHA Rule 2003 The Centra Road Fund 2000 No Act/Law; becaus onsicied neti vei was taken State Cab gaeL ratstini nde e 3: Adm Indep xennA Nam NBR :n SRFA CRF l: a. b. untry/oC FR pa staik A a: State: of Ne Pa RM Indi Assam: Page A4 Transport Note No. 37 December 2008 dna eht re e) on ion Ord lin tele les noit at ms mp m gulations ling in nte Ru dget co oni the infor Re cting mn bu a ipt msin dedi caifitoN s/e in, dedi Colle channe mechanis Not Gover t's(i the No descr mecha prov Yes nI No prov Rul or for nte for the 6) creeeD se etwork xe rnme rule ni rul /n ovidedrp Ann Gov oni Act, road in eht orkw oni w/ of ni allocat net La etails , , l nfori In Allocation type (d Yes Order No Yes rura notiacfitioN at m No No se of ls eht red leur iont rul e (detai)6 Or ni nte typ etel nm niota maro inf Annex , mrof i )ded dedi Allocation for works in Yes Gover No No (Incomp in prov No No prov t on ni by on as yti d ,t ti by tori on but yb tori on for tropers'tnatlusn nciala audi Road aud part noita Co chnical ts ed tants ent tdi thoruA artere audil Aud ent ytilauq as Aud fin eht te en atl tdi au oun m au ch cai l tdiua m tidua emir ipust lai ire acc lai ire ngi mrofin tid of ent rna ,tidua qu re morf de requ l laic techn ntei rell ;l requ l orti rell ;l ent d aul re gular ngit cai atedl l cai D cai Ord inancf No inancF pmol No naniF trop tnedn rae No pe mon liacnaniF trop rae No edi emir Re and auditing No audi the )(i ) charter (ii techn stipu )(i ) part Deve by accountant (ii but contro )(i ) Com Gen (ii techn deni PW and of )i( Com Gen i)i( detcart prov requ techn ex tcA ent gal nde niota ent m nde syste Le myo dep oni dep oni FM system enebsahsn my e mrofni e my e e MF eddivorp auton tonoua MF causeb,oN taxatl letp niota rae gen mocnI dedi autono MF causeb,oN taxatl caus D's rae be WP gen No,) of mrofin mluoctxen Financial No )(i on i)i( prov oN )(i eht on (ii part No in y and vei monotua cifi naloi evit e of eiv spec utti straini becaus ary ecutxE ard itartisin dellif PWD use rnme seu niota inst cret Bo laniotuittsni of nte evit straini eddivorp stratin gov mi nistrativei ad uitts laniot no on dma Se sa RF caeb l dma of my beca, niota e earlc elpi leve inc autono ersstini mrofin Adm autonomy oN ctorer mdal/aniotuitts hg in becaus Board Not autonomy; No autonomy Pr PWD Di No in ve No autonomy hi staff; No autonomy adm No , by ro ee mn re al Act State po Act a w Ord Establis hed La Decr Gover ent The Kera Road Fund 2001 tiacfitioN 2000 on Rajastha n Road Devel ment Fund 2004 tiacfitioN 2000 on mrofinlla;deidvorptonsawtcA e ehT Nam a untry/oC FR RRDFM KSRF:al dhy esh:d esh:d F a. SR State: of Karnataka: KC Kera Ma Pra FRFPM Rajasthan: RSRDF Uttar Pra UP Page A5 Transport Note No. 37 December 2008 Annex 4: Composition of Road Fund Boards Country/State: Name of Road Board Size Number of private Chairman independent from sector representatives Government Nepal: RBN 13 5 No, chaired by Secretary of Ministry of Physical Planning and Works Pakistan: NHA Executive Board 9 0 No, Chairman, NHA India: CRF No specific Board set up for this RF Assam: General Bodya in the capacity of 14 2 No, chaired by Chief Minister RF Board Karnataka:b No specific Board set up for this RF Kerala: KSRF 10 3c No, chaired by Chief Minister Madhya Pradesh: No specific Board set up for this RF Rajasthan: RSRDF 11 4 No: Chaired by Minister of Physical Planning and Works Ministry Uttar Pradesh: UPSRF 19 7 No, chaired by PWD Minister a. Registered as a Society b. Rural Road Development Committee at the State level has a mandate to review and monitor maintenance and upgrading of rural roads funder by the Karnataka Chief Minister's Rural Road Development Road Fund c. Including representatives of State bank, Infrastructure Development Finance Co. Ltd. (IDFC), and Housing and Urban Development Co. Ltd. (HUDCO) Page A6 Transport Note No. 37 December 2008 Annex 5: Entities carrying out administrative work of RF Boards' decisions Country/State: Name of RF Operation of administrative work Nepal: RBN Board Secretariat composed of an Executive Director and small professional staff Pakistan: RMA Road Asset Management Directorate (RAMD) of NHA India: CRF No specific entity Assam: ASRF PWD Karnataka: KCMRRDF PWD and Rural Development and Panchayat Raj Department Kerala: KSRF Essentially no administrative work carried out by Executive Committee because it had 9 meeting during 2002-2007 (while the Board had 7 meetings during the same period) Madhya Pradesh: MPFRF Rural Road Development Authority Rajasthan: RSRDF The PWD serving as Administrative Department and Secretariat for all matters pertaining to the operation of these Rules Uttar Pradesh: UPSRF PWD Page A7 Transport Note No. 37 December 2008 evi a to a what the of ecutxE ofs y was or e m onl, undsf ngi funds r transport gnci end a sp NHA of ources noi fo msa ove by agency eri of to gram by nt eryth nanifr yti appr me ev sanct oni r fo pro e edni o ment onai ...") we Progr proved not rm ngi ("t ty po ose author adoR Financing dna et ap Do manage becaus dete fund Yes govern concess construct facili No Prop e th ms ofl has budg Progra roads) annual MPPW, nce Approva of ove list(tn naetni se, ove ca is appr o a Mal appr r r th we we ni nteoC ("t not po po Yes Board" Annua Board Do No No No ry,stini mr rkso ctoes ks w a nded y or we oftn fu draoB draoB draoB esc icif icif icif onlt tha amrfl servi FR ecps r r r r we ecps we ecps we we No po No po No po po Procureme and from No No No No No No atetssel lega ru vei noi e nte ect for ni 2005 Cod rnm s ocat the for ni all resp rule funds atedl of and Standard ured d AHN 2005 gove 10 ni eht for e of of of les h ru ipustsi th oce seiv the and in Pr re 2) e e 9 l 2003se d gin sediv r r r r s,e . 7, Ru 2002, re we we we we wit ourc finition th A neial A po po po po bookt ec funds res De allocation No No; of Rule RM exp Operat RM (Annexur 1999, No No No No RF budge rdan tn to re l's r to eht acco in seu/s est sugg othe of vieel to menrevoG ni ntse r pow cateolla paeN sediv HAN otni to re commend the adjustm of limited nte ardsoB of ct:A toslolt re e to of andsll ledennahc yti but esi author ni 1999, D to cas rnme Board lev r r the ovG RFfo Board seae deoC RAM rmani eiv gineb ni, ons;i of we N ­ Cha esi yes ss se rew we s gulationeR po po RB charges Roads crni AHN oflevel A po ca 2005: the Execut the lev RM No Act: conce ni oN No ngi Book onitcn e ovidrp Redhet fu Nam esh:da SRF yeK:6 Act ni Pr UP KCMRRDF RSRDF sh: the iedfi N RMA eti xen FR RB: SRFA CRF a radeP ecpss pal stan:i a: KSRF:al Desp i dhy An Country/State: of Ne akP Indi Assam: Karnataka: Kera Ma FRFPM Rajasthan: Uttar Page A8 Transport Note No. 37 December 2008 and HsN s ce gni deuclni orkwteN hc maintenan whi upgrad ci k,ro Roadla odi and Loc per oni tweN for work: daoR 30% :k rent, ur wor rec constructer, /netd and of oni roa rtS cgieta roads of ,en tatili rof Reality type type feeder In By Routi rehab By 70% and deni of r oadr for to d may het fo ti to to such un that gnini be e ni, th to neeb rm ed load Board ed use for Bank, in and of of der [Authors: oni vere deti or dete the rema has lim ount sa nancfir axlerep Board (Ga) of excet be oadl no (1) y e nessi th vestni straaRl ads, ovisrp ma How. ni, nd be areas si cy esi usb ro axle d d er e (b)and ni Act] fufi halls bas dono an a Boar dut, allhs ma,e as th noictes agen d e noictes om d'sr ment tyi eedf per ion ni and 1, an for onsi urti Neparo nci Boa e and thiw buti se Board , ) Priority arey (a) donor amount rko sharingt the to nte Govern by capac nde funct exp scalif teda es,itivtica the mentn im NHs,fo auslc adsol but er contr aucl- nya nment w cos d ni e venueerl adsoR uchs a rnm edni of h e load etn/daor evi edrre m eac ref estl ed overG abov pay oadsr und d's sub m Gover on Gove rme road oni fro pay e ni as tealer nde Majesty's e to ngi totas' Boar 25, fro e rt Board; det to th entat stratini nance e roads totaro gencya s th works r d exp Hi ni RBN fo n jesty's ast the rdag of maint exist for auscl ce r be Majesty's of quoted suppo baru plem mda tal road etale ofl y ed gardser fo undf to majesty's by of Ma incoml usinessb to noi r ot siH udl ni ted with peyt siH ojecrp re im h (f) ni nane 15% siH suc tota e of m nce inc s ngi the gni a-gI: and nti ngi d th ador not by erg out approva ed not adr se eed alloca oni ge ord by d cti by ma ern atht e for si 15% the d part d aucl safety d ro em roads exc es acc an road pri of mana urre rko of distr borne 91), oadr standards and conc ir e eddiv mati no of upg carry fun ssui are standard on e not ot ment oveba nci e of eb estro w catiolla ceexe ot th dati htiw esitiru and,ic edib noitc s:dn es revenu constructer fu s' ce to ect edbi paer itur Pro. not or ni do ees noicte of nance fund scr nd me re en ichhwsd ll of m d ing RBN venig overnG and epyt proj fund d odirep prescr s nti tos aft m ount may, secro roa tenann e edtceles pre expe ncoil sha roa noi nt, roa onstru of be part sub-s ma on of the reco to of rec ll tat eda mai amount tota to ount hci the gn ma tyiliba those upgrad m (by t:cA e nte regard tivea e Board curre and 70% sha [Authors: th nte elc ni oft ing th ma wh, isti ond worksr Majesty's ex Rules: oadsr fo detal noi ailva hc m Act unteroc us rd th s stipulate d ndari andri d gni nancetni sem ma ch strini su ed e] edcnal the re, ce biliaher e ba , nturesebed be.may d uchs re noi of othe tyiroi siH ni RF entat d m men oft ge th base ni e ine e for safety pr acco ni Act by road e Boar paer paer e tatili muin Boar for shar ncal ing For the the anri sburid mec ivehro enfor searer ad abov rcen e th cas Boar be utoR arche eml cas noi Mi d Board of de mot mana ba beir buti les adso For A If In a. rstiF notiacolal a. For For For For pe For the a. onsegdi Maintenan Res Imp elci Road Rehab ocat urre ocat ru As R I. b. by c. repa d. e. the f. g. and our II. section upgrad presc III. time amounts as adsoR I. br b. c. d. veh e. f. g. all II. amount III. nci Roads case contr all eht oni e catollA:7 Nam xen NBR FR l: pa An Country/State: of Ne Page A9 Transport Note No. 37 December 2008 fetyas of leb eht (of the the and for ci the ent ni ilo d there r road nneda 10% t road nom of m was State RF's ecnanetnia seira igilef ) fo of ent nt, for sal o are m mnu uch m men state eco ople the atetS m to d of 1 detaclola (HSD ter)anli r) oni su rne (outr dev by uct red and gae rse gni highway el teli at lop amou of w m emit s deve sbuid en Rs.1.5/ per y payment in gineb gov teli esid for edni ho m/ Board such thi no constr works tyiv nta transfer nceg and ions f teda and ngthe de is eed (o s.1.5/R(l of NHs r of fo yte on oft ntraleC ntatie cti 50 Fund mai earlc large str stat er ro eml ne 0.. alloc was up ent hg e P HSD Road and em em pet 57.5% th con Rs data e a and lvovni imp yleri not tak d wei anci nte 12.5% PSD and on to s Roads by of e: uch th ngi in on .swo ot ot l for RF; m to sate s ent EI). si NHs roads by catedollasi improv and gem : foll maintenan & ces of by deniw odri ing p eesyol oni 05.1.sRfotnuo sp .YSGMP/sdaorlarurfot ce saf Ou. 30% e ighh en cted ual equa rved ) d nancFi ; er ssec ualqe ridgeb State re e owh s uralr geda much d pe cir e as and of states nti C of hedsi em co d eq er tat es ng;is seer to (IS gnini 2.00 hesil fee of ect lb w an g_pakistan.pdfnic e,nitu ili et s' lever ent m azaslpll lle mana th financ s ent ov ec ho as of and pub oni proj em to ce nce dorir e Geo MDAR iturd massec mann of ount Rs. ces pusi nani amount or cros amount noi e maer nancetni ment ed e tantl uct eni .5 m e of ma rm Ro Rehab New Cor Bridg A 50% ) An An An ocat Th data data tenani 1. 2. .3 improv 4. 5. 6. NH expen ehT.a ngiwo mploevedrof)reitl/ nocesshetof am 50% ocatella pmol foll )(i .1sR rei ptek ngiebsi (ii ent after - deve - under railway - maintenan i s all sche importan b. total and No Depart collect purpos Consu Constr RF Highways no dete Ma s r fo ni egm06/f/seil the of ODR H/f for oni and RFs 40% and agency ectre hit of RsDM and s nte ssarye on/TIS/A m and ngid of rkow nec Inter-State gedi ing w fun Governm ne ersdi w/com onsd br a ofs ofse ) g/ttd upgrad (ZP for d offl consti p.or : roa gni ane d. urc 60% ha as m ibe so an e ec be s nditure ent udl m bys escr th nchayataP on 70%: fund unesca.w inc pr by a ni h Expe ads be Zill th Board suc leb prove y onairei er dr e im ro wayilar ined maintenan e and ma m ibed d (Wi the urs ligiE tye th und ZP Boa of scr http://ww: State 9; saf ngs;i ass tered to concess het pre sbid e" e Rul s;HN over nnealp sroad a ses by be and Stat 2006", other or cross for e 30% ot ­ ghwayih ions of d project adyeral expen the e s; of e d erdnu h 90% dna cost cate in stani suc are aglliv ovedrp vei maysa 2003sel stat d D e allo akP an hg : nance roadl -roail ap ent nance ent hertie ra of ey and an ni d th s WP tyili lopm stratini urti sdaorlarurlla: nd may ojects pr Ru e wei A nte nti work work: rura nti ect e to fac ma rule ma the roads sper work roads work: ecnatsissaliacna work nt deve adm expe RM e :k th nancetni road rovem and gem /netd sy /netd and of and ance; fo nmanneu in :k ncy uralr /netd ) inf sources sport yna eht yna no:k /netd rnmee of nancingFi wor oni ort roa roa ent nte ent at nte becaussel wor em and ger roa re tran gin wor roa oni to ma works a gni gni Gov oadR" of eni tatili impci etr azaslpll mana m m et et to of Hl ghwai of Impci onict rks me rucifi of e of RF's ginidvorp of fraye of of ntate rt om dorir mpole ople ople m wo ec for PWD of tedti me d me State les po type ect Rout Rehab type it ona type Dev Dev Dev onstruC burssiD sp type type For For For type type mel ru According By 1. 2. Ge.3 New4. Cor 5. By Na By a. b. c. Econo d. safety e. No By 10% under By 70% comm roF.a resp b. c. d. By By "The imp No Res'PAC ES esh:da Pr UPSRF UN: KCMRRDF RMA SRFA CRF stan:ikaP a: Indi Assam: Karnataka: FRSK:laareK RSRDF h:s Source a Prade a. dhy Ma FRFPM Rajasthan: Uttar Page A10 Transport Note No. 37 December 2008 sei tsrfi d l nt an vi hci l e ll roa suc net an ona th to enc ot wh si d ag deti to rnme d locatedal The.t orf rece on ge nciaaniF liacnanif e e h ed, c., Nati ylcterid ccounta oveg ich bud by no Befor.re sei to seitivi . sed nc by wh NHA unuse, account; posed lease e ba re gni the e act etse of th mad imesttr atlupist NHA e Bank age has sa th So. are owll of desab ti charg MP) the ed by RBN oney fo 1/3 al are road onsictell d treasury to m m, co adol offense RMA (NH& d MOF si , vo tsis an to bas seael ess appr )OGCF( gin edcerp to ci le totnei gnatised the banklai erv e erc d re e se ax into traff ecli : e th progra ousi Po manage th depo ues tei ter from mm pos strfi th leaerre eciffO in : s,e deti sourc e var for subs e ar to co on a anismh and reven MPPW. de charg not ba lls chanism:e trimes het ed rimestt m racted ni er d s. Motorway ity deti to RF's m are a esune chanism:e os In mec leas lareneG re pos sis mancer e etni nanc anismh de fro us an noticell cost d nte m ester her hci no re uent ma mec cont d co rev )8 dep untoc es. perfo ocatlla ed RMA ot roa noi s an ent e trim ac cting wh d has collects esi urd si eqs ationzi et A llect her es th a N Reality sub rlelortp ngid can cting ectll neiF Ot nnexA MOF m NH) tolls, co co ) hwayg ndepe ) on RB In Colle DOR collect to Channeling Funds agenc proce budg two Co spen RBN approve author Colle (i as are of (ii hi ndi (iii (see Channeling Revenu called to fund r m fo del anishc coveer edu nance sre ebllahs e e th th detsi us gets poed , me and teni schi oadr omfr,e ma stani costs mti RBN ylcterid lowf oadsr d from Pak oni to e But. nda . Fund s:woll of e anri ni es nues ll ect mit year us pa ." co fo re : m as the to ebll Act...si veer of venuer staffri xten the for th 2003) account llA ten fro,ti the el rate ment by der able nt. s, to rn in or N sha d abi edbi ce un seluR cou ngi RB lev d A Ac gove ctor : Boar escr pr MR psal- sour e accru of by llecte the co the i nonla ed s ed at contra us est of charges venue basket hg be chanism theta was of erc m intenanc ulpits A.MR RMA. e ou me wer stipula po naloiti nt e e-3 Ma e th the th o th thr can ount ul com rella to d m N ork nda add RB funll ll mss we nneling to ...tcA amou am (R a int ll e ni Roads fro to , de tonise goes as transfer by to m cha fra uties,d, het isht eht wher anismh sferrn tra alsoll sourcr and ed nte nti and onsi llect sha yl po llect unsp mechani gal othe co le nct co ot sha road A A ck si ng cting fu to a atedl che the NH s m As Colle "The ...(b) erdnusieltanep maintall de NHAe rse romf mec sbuid gnatised th nyA. to NH ngi ousitid lloT (g) such Collecting The banks accru expe The stipu N. RBNfo anneli RB custo r unt ch /e for e el de eht rof a fo esu l non- at and gn Funds lapsabl non- lapsabl Lapsab reven transferr from centra treasury and lebaspla esu other reven Non- lebaspla d acco MOF e th ollectec by ni si de in maer Collecti 8: RF N of RB: AMR:n Levyl ocatlla et ues Fue a. budg reven Annex Country/State: Name paleN staik Pa Page A11 Transport Note No. 37 December 2008 sei r e is si e l, ises th nt the A/c to Raj of th isht for ed or CRF pr mpan ap undel such ar annual est pmeol to nk nd) D undF ta andidn ecfi Ba Fu Mandi Of llA iw th neraeG Co of morf WP atidl hg lloca e yelai psedla of Oil MOF ccruaal ing veeD ngid Ma .l ed nchay het Conso thoulA es/a l ngsi het byle a.i accor adoR Pa each to untant Stat to ." financ pass Sav lidated ni t Bhopa o perat sdnuF amount Ind tota ati of Rura the a de and ee sen at Acco and arey eht chanisms dies fo next the ter propr of (MOR) by as nt itt d count DA sferr d ial d Af onsoC( ap me me )eniL uced is m nda Ac the anl out . aid ent pro m Boar .i)lheD unF ni Fund ab arey oni iss Railways .tcA ediv In nte dedi pmol get ov e co ount D. RRPM tran, w sei nancif e ingdul pr th gni P. (FD). Ne ies inc petro nneling on onissi la stryiniM parteD gin am to anp the mm of ht e ceer of e partm d mad pan of is Bank De veeD (Bud in lidated on de Govt de Co in ation ,G Com got tiona cha d solidatedn mm if nanci SRTH, y e nancFi e lar RD)P m edi market ccruea rketaMl ate CA sferr oads.r PWD to Oil Conso nde and ll ctee sitop Co Co alloc a ngi Stat or lev e St MO istryniM nwod neo se.pal by to Ru (RD e nfi the uratl de anrt of ComliO en by d the eb .hielD to cos th ngi nanciF th of e ngi annlP ot and idla m ni er nots de ss by cui ent by th de eti at lete ce of are e fresh cting dur et, alu tedis ectll oni om and ment avh New i ed e Agr arese erdnU( de Reality ces ot annPl doe ssi tis pmol and ectll psal In Colle The goes the CRF budg amount (MORD) f mro Whatev depo and Co)(i Fr ) m (ii PWD Depart Incomp Mand collect chequ State chequ per lapohB llect depo deve Co Fund Co)(i poseD) will year (ii otn ounts, next e m th fla eht ccA ctir eht halls yearlai of the beh anishc and si a,i th gnictu Dist yb noi d nancif ller In ocat me Ind ni Actsi FR all ent FY.t ded th Bank to Contro curr lowf of wal or ediced d yb after,e ofse vei eb any e ief curren th Fun ya then oftc the Fund de mit ngi Chrie ed ma to urposp perat m and th sa d spe of nk. re idatl the Ba Fun in dur)e st 13 d . nsooC ationirpo time for ni ed ncal oughr th eht from appr ylevisul Co-o sniotu : msi MOSRTH partm to by Fund exc (unspe edit the d chan ze State, ittsinliacnanif ptek idatl Fun e ba hcraM nte th nt no Bank be Conso ofti De edlu illw to ed nd de cr gni the by sespalti ce est e redc re th naniF liament tos me tiliu gnli sched hto fusi sferr sav sa or th to e are stipula dei Parfi, eed of ing ne of dedi th proc ber chan hcus tran, released unt ov ecna ies is pr YFtxen ork h dezil from lev fo in bal extent we may on ona ro Acco pan ion the eht de m cess nte sucsti n,o m tea ation "the ni m to sferr fra eht ed ctiell earlc ocatlla rne cr co yl nati knaB any e tran gal of s, of lete ni pareS ComliO or nfi hatt noi by Th dezilitu be le ds Govl dei ocat ses mp lete all TH. to the ee prov Act Act co tedis ear:lc de llect statestcA de As Proc Centra so expen No oN evitarepo- Not depo Co Board Not Co Incomp CRF easr MOSR ebtonnac has,d e nci m Fun /e th fro e a el b the Road n-o yet yl arse PUr Funds lapsabl non- lapsabl N lebaspla lebasp Non la Lapsab Non- lebaspla Non- lebaspla el of) n-oN lebaspla le aic YFtnerruC Lapsab 11(5 noi h: h: psabal nanif ehtfo denu esd es Sect n et, RSRDF RF of SRFA Pra Prad The nosi future gnivaS budg CRF a: RRDFM KSRF:al a F a. b. dhy Country/State: Name Indi Assam: Karnataka: KC Kera Ma FRFPM SR Rajasthan: Uttar UP Page A12 Transport Note No. 37 December 2008 r ndeet lort the tyic pe of no no redrO of ll 2 3054 to tne Rs. sale of ad , he no,lo %14 mnrevoG a rt ­se % 10 meocni ount petr ma Major d e r ­ l th de Reality anle eht poer in In charg 22% ­ etc, ni un d esid tant'sl % oni (renta cess % asele on edibrc 52 %7 ontia grant 64 se llect 4%- 05, re urc c) 20 ssec consu ­ vyel ­sll striger ­ nt co esrp me so et, 1, tsn the ing to to 2004-05: elci etg April id es yl Bud vyel gni FY Fuel Road Veh rnmeevoG conill enif ecli ntse el gra Other secruos To Po of On No In 1. 2. 3. 1. 2. 3. 4. docum As and 1. State 2. roads llA accord re or el e fe ps oth unt; s se gni Acco ouprg for sedi noi stam on nu e , grant ve oni ss tax, follow p re e nance elc zati hi 'sFR th nti ment noi ce, rne transportat l m Ma organ of fro Gov catolla ver and s/RFPs.asd s Nepa , any nte moto ngi onsi oa Roads m zat time State tary report) opl tax, nlw Source ntere ni the from dge to in the 'st e bu tanl veed les sa s and orgal ). tye .pk/Do mit by saf of) dnall for m d fro Act onai etc d e m oneys es;ic m nt;e and;ll d Consu roa e uratl eef abroa fro of stipulate edr thisr ,ti agen ancene th cesst .nha.govw shortfa release nt de internat nte rnme nor to k and ni agricu market en Act steig un d offencci an stm traff ngi Govl dol wor ec rantsg (mai deific non- pmol the As reselci les nvei o MCPA ru g,in ru http://ww way; rae onai ec 3054 spe acc of on Fed intenan SY, nti of veed the ad 2003: ds load ma veh PMG (not ndal on ithw vernments er or al ocee ucture go les, ov eef uesne right the of comeni rnatetni m by maintenan f gni her rse se se ng pr Ru ., rev e fro e esi 2002-2005: ancelip A elci and rei and any onsi major oth, urtluci th (e.g nfrastri for fo RM veh es dedi its ov ec le nat udlcni exc agr of of charg charg grant gesdi lla :yle uslai antrg br erc pr esid , unde roads of state ontia ontia nesif feti nam nanfi do 50% on-comn mentnre froms AHN and heavy y ransfert RMA, mm depos k nance undsf to and andl ramsg tyci roads nosi er s of e 50%fo datalaic and revenues lls striger striger oanl se with deta ansrtl . rel e cor e de th ban pro of noll nanif or oadsr segrahc ntei ged ent duc ent oni e iona fo ntse fees petro ec conv bri m of to elci elci orfseitl govl sourc us dalo lementar solall er ges onsti mal cures m on nte to,lo nan orf ntmi prot nti strati RF's ntra onsll sha ntoise nancetni dow .n ss En fferdi petr taxsel po Ap fores reg of daoR.1 vyel Fuel Veh Veh Pena Ce Grants Other accordance To Road Supp Internat Bord Prof Annua Ma Loans Ce Sa Fee nolloT Appo average 2. 3. 4. 5. 6. 7. 8. In 1. 2. lexA.3 4. 5. 6. NHA sourc 1 Char. 2. 3. 4. 5. 6. perso 1. 11 mainte and 1. 2. 3. 4. on 5. and eht cesruoS on d 9: RF of NBR RMA SRFA Base CRF l: pa Annex Country/State: Name Ne stan:ikaP a: RRDFM a. Indi Assam: Karnataka: KC Page A13 Transport Note No. 37 December 2008 50% of 85% sale: e ucd Reality pro l eddivorp In tax lec hiev uratluc agri neebsah of RF to niota motor of %2 de yl on cato mrofin 10% Cess all Cess No e al th or e of raeK se e ency madsel nu 10% th ag ru ve to of nte re ual 'sFR eq nsoisi Act is th oni rnme ortcAsi th of unt prov der s amo Act] eht un tutistni ovG of a ent ionss Source [an) body tion per ry ovi (3 as mee anyro through pr Taxa ai e s onict nte agr or cles noi th statua Ind rnm of b-se ess the Vehi or ylcterid er und stipulate tor Gove conc Fund Act dnuF sured e undF rceof Mo by ncye nmentre nmentre un d gesdi ag oardB the in eddivorp the As daoRlartneC nte ralaeK cteell threp Br nte Gov Gov e e het ing as e th th be orkwe nm co the eri th nm by totid e m of 2000) Gover unt of onai ofti by by cre mit fra Gover Board orf e enebsah eht e ed made th ons amo (6 ess e made made cr galel e th es es the ntse dezi throf e etc. krowe morf by th by by th e, e provisi other 1999 conc lo by to law ed advanc advanc stme on wed author trad petr edivecer mad oni thered marflagel made nding collect ors ors nvi other no borro ount ation y m ons un sta nt ma an or andle no yeno butir ed and,senif, Act, onitce eesf oanl oanl ipts es otrP ents nt or or rns dy or nfi taxe, bo niota mllA.1 cont ya seru amou other er lete und taxsel ceerre donss esi the collect fellA oth ce mrofin 2. tax 3. Highw paymllA.4 amoullA 5. 6 The. Grants Grants retullA Any any sa 7. 8. 9. statutory 10. 11. there Incomp a. b. c. No h:s h:s RF of Country/State: Name FRSK:laareK de raP RSRDF Prade a F dhy Ma FRFPM SR Rajasthan: Uttar UP