International Workshop on Rural Infrastructure

The World Bank, Washington, D.C. , May 19 - 23, 1997

Case Study

The National Roads Board

N. Gananadha

Excecutive Secretary

National Roads Board of Zambia

I. IDENTIFICATION

Zambia is a land locked country in Central Africa surrounded by eight neighbouring countries. It has an area of 750,000 square kilometres and a population of about 9 million. About 30% of the population live in the 7 largest towns and the balance 70% in the rural areas.

II. INITIAL SITUATION

Of this 21,000 kilometres of roads are the responsibility of the Roads Department, whilst the remainder 16,000 kilometres Zambia has a road network of 67,000 kilometres of various classes of gazetted roads. are under the jurisdiction of the District Councils. In addition there are about 30,000 kilometres of ungazetted rural roads not administered, but under the purview of the Local Authority.

In 1987 about 40% of the primary road network in Zambia was in good condition. By 1990 the percentage of the good roads had declined to 20%. The value of the Zambian road network was initially assessed at US $2.3 billion. It has during recent years declined by more than US$ 400 million due to neglect of maintenance. Zambia has during the past 30 years been living off its assets of road infrastructure. It is assumed that about US $38 million will be required annually to avoid further losses.

The deterioration of our roads and the consequent loss of asset value, has mainly been caused by inadequate funding and poor management. Road maintenance and other expenditures have been financed from general tax revenues in competition with several other and obviously much more pressing demands on the tax revenue. Maintenance allocations have during the latest years up to 1993, declined to only about 15% of requirements. There has been no clear price for roads. Provision of roads was considered a social service.

Inadequate funding had been further complicated by the poor institutional framework within which roads have been managed. There are five Ministries dealing with Roads. Poor conditions of service, lack of clearly defined responsibilities, ineffective and weak management structures and lack of managerial accountability have all contributed to poor use of the meagre funds available. Consequently, the Roads Agencies suffer from lack of suitably qualified and experienced staff to plan, programme, organise, monitor and regulate work undertaken by own forces as well as by private Consultants and Contractors. It has thus long been clear that the problem of road maintenance is not one of engineering but of policies and management.

III. THE REFORM PROCESS

Policy reforms, were debated and formulated at the Zambia Road Maintenance Policy Seminar held in February, 1993 after Zambia joined the RMI under the World Bank, Sub Saharan Africa Transport Programme. The recommendations endorsed by the seminar may be summarised under four main headings as follows:

(a) Financing Road Maintenance

A Road User Tariff should be introduced to provide adequate and dedicated funds for road maintenance, with the proceeds to be deposited in an Autonomous Road fund.

A Board of Management should be established for administration of the Road Fund with members from key Government Ministries, the Chamber of Commerce, and from private sector road organisations. The activities of the Road Fund should be audited by independent auditors.

(b) Organisation and Management of Roads

An Autonomous Highway Authority should be established to take overresponsibility for organisation and management of the nation's road network. The Authority shall be administered by a Board to be appointed by the President One third of the members should represent Government Departments and local authorities, while the remaining shall comprise representatives of private sector stakeholders. The Board should report to the Ministry designated to be responsible for the Authority.

Sound Business Practices should be adopted by the Authority, including competitive tendering for required works and services, commercial accounting systems, and auditing by qualified external auditors.

(c) Improving Operational Efficiency

Private Sector Involvement in maintenance should be increased by instituting an appropriate business environment for use of consultants and contractors, and for involving the private sector in efforts to attain better use of government plant and equipment.

Use of Labour Based Work Methods should be facilitated to the extent feasible by proactive Government policies and regulations.

(d) Staff Incentives and Training

Terms and Conditions of employment to be established by the proposed autonomous Road Authority and Board, should be sufficiently competitive, and performance related to attract, motivate and retain Zambian staff with the necessary qualifications and competence, and facilitate dismissal of nonperforming staff.

A Training Organisation should be developed that; with full use of available facilities and capacity, will be able to support adequate and sustainable training of managers and other personnel for the road sector.

IV. OUTCOME

(a) Road User Charge

As recommended by the Road Maintenance Initiative (RMI) Seminar a road user tariff was introduced in the form of fuel levy with effect from May, 1993 with K10 (about US 1 cents) per litre of diesel and gasoline. This has been now increased to K40 per litre (about US 4 cents) per litre. The proceeds from fuel levy is being deposited in an autonomous road fund. The account for the road fund is maintained in Commercial Banks. These accounts were opened through a tender to ensure best terms and conditions were obtained and the money protected.

(b) New Institutional Structure

A new institutional Structure was established under the name of National Roads Board to manage and administer the road fund. The NRB was established under the Roads and Roads Traffic Act Cap 766 in October, 1994. One of the notable and unique feature of the NRB is that it is private sector driven as seven Board members are from private sector and 5 from the public sector. The private sector members who are in the majority are nominees of road user non Governmental organisations. Whilst five members of the public sector represent relevant Ministries under the Government. No member of the Board is appointed by name and in his individual capacity.

Another feature is that the private sector members have the right to vote whereas the public sector members have the right to participate without the right to vote. This road user dominated NRB represent a major change of policy in the institutional structure for the road sector. It is also a deliberate attempt by the Government to hand over ownership of the roads to the private sector as well as to create a partnership between the private and public sector for the management of roads.

(c) Task Force or Committees

Another innovative institutional structure was to set up ten Task Forces /Committees which provided opportunities for participation by various stakeholders and key players and thus involve interested groups in the management of roads.

(d) Policy Guidelines

The first task of the NRB was to institute policy guidelines to manage and administer the fund and seek the approval of the NRB and the Committee of Ministers on Road Maintenance Initiative. This helped the NRB in ensuring the road fund was not raided or diverted to any other use other than for road maintenance. The main features of the Policy Guidelines are as follows:

(i) Road Fund shall be disbursed for Road Maintenance only.

(ii) Disbursements of Road Fund shall be approved by the Board and Committee of Ministers and not directed by any person.

(iii) No Capital Expenditure or allowances shall be funded.

(iv) Road Fund shall be disbursed in the following proportions:

From the above it is evident that the NRB disbursed 60% of the Road Fund on Rural Roads despite the criticism that greater portion of the Fuel Levy is not contributed by Users on these roads.

(e) Systems and Procedures

The next step for the NRB was to establish systems and procedures and win the support of key players to ensure total transparency and accountability in the management of the road fund.

1. Programme

Another step taken by the NRB was to launch a National Programme of Road Maintenance to make an impact throughout the country. This was necessary to arrest the loss of roads particularly the rural roads network which was not maintained since construction.

Under this programme all the 61 District councils and 9 Provincial Road Engineers were invited to submit the programme of road maintenance for the consideration of the Board.

Most of the Councils failed to submit a programme as they did not even have an inventory of road network under their jurisdiction. There was no road maintenance culture and hence the councils did not have capable staff to identify the roads, prepare a programme, and sell to the Board.

NRB had to therefore negotiate with the Association of Consulting Engineers of Zambia, and appoint Private Sector Consulting firms to assist the Councils and Provincial Road Engineers in implementing a programme of road maintenance, mobilise, supervise, audit the programme and certify payments. For the first time in the three decades the road network, particularly the rural roads received attention throughout the country.

In the first year the Board allocated funds based on a programme submitted by councils. In the second year of operation as the amount demanded was very high the Board adopted distribution of the Road Fund based on the following formula:

2. Community Roads

Community roads comprise of tracks, trails, footpaths and earth roads that link communities and villages in rural areas estimated at 30,000 km. As the councils are unable to provide the essential services and maintain the gazetted road network under their jurisdiction, the community road network did not receive any attention from the councils.

NRB working together with the Social Recovery Project and the Councils under the Ministry of local Government and Housing has put in place a programme to involve the communities who will form associations to take ownership of roads and manage maintenance on a cost sharing basis, the communities contributing 75% by way of labour and NRB 25%. It is envisaged by this measure the communities will own and manage their road network on a sustainable basis and thus help to improve their quality of life.

A Rural Travel and Transport Programme is also being launched to improve accessibility and modality in rural areas.

(f) Capacity Building

NRB adopted a deliberate policy to encourage contract account as against force account. NRB always advocated payment for work completed and certified, to the Contractors and consultants. Due to prompt payments made by NRB, and assurance of continuos work flow, backed up by award of contracts in a transparent and accountable manner, new contractors emerged in the country resulting in competition. Consequently the number of Contractors increased from 4 in 1994 to about 45 by the end of 1996. This resulted in the pricing for road works declining, in some instances by about 40%.

At the inception due to inadequate contractor capacity, the NRB had to open Bank accounts for every councils to encourage community participation in road maintenance and thus develop small scale labor based contractors in the rural areas.

After two years of operation several small scale contractors had emerged throughout the Country. In order to develop the rural councils in managing the Funds NRB ensured that only an impress was paid against cost estimates approved by the NRB and that the Bank Accounts were controlled by the Consultant and the Council with two panel of signatories. In case of Councils who misused the fund by paying salaries or allowances NRB refused to reimburse the impress and froze the account until the impress was properly accounted for.

The problem the NRB is now faced with is the poor quality of workmanship by the emerging contractors. Actions have been taken to improve supervision through private sector Consultants and supervising Engineers under Councils and the Provincial Road Engineers. Training programmes have been conducted and the Road Training School is being revamped to train and develop contractor and consultancy capacity in the country.

(g) Quality Assurance

The NRB was able to develop not only contractor capacity but consultancy capacity as well. As there was no annual maintenance in the country through contract account the local consultancy firms did not have opportunity to develop their capacity in this area. When there were road construction and rehabilitation projects in the country the local firms hired consultants from their sister firms overseas and provided the services. As these road projects are not continuously funded throughout the year, the local consultancy firms did not therefore have adequately qualified and experienced consulting Engineers in their establishment. Many consulting Engineers appointed ill trained and ill qualified staff to supervise road maintenance works which often resulted in poor quality road works undertaken by emerging contractors. NRB had to terminate the services of two consulting firms appointed to assist Councils in two Provinces and also suspend payment of consulting fees to another Consultant due to unsatisfactory services provided . NRB has initiated and encouraged on the job training, formal training and twinning arrangement with foreign consultancy firms to build the capacity and delivery capability of indigenous consultancy firms.

(h) Roads 2001

As 80% of the road network is not in a maintainable condition, the NRB initiated a process to access Donor funding to launch a National Programme of Road Rehabilitation. The Government mandated NRB to set up and provide leadership to a National Task Force with private sector and public sector participation to prepare a Bankable Document. Within 6 months NRB was able to provide the leadership to the National Task Force to prepare and sell the document to the Government, the Donor Community, and thereafter launch a National Workshop to seek the mandate of the key players and stakeholders for a US$500 Million Road Sector Investment Programme (ROADSIP). The NRB has been given the mandate by the Government to manage the project and has put in place action plan with deadlines to launch the project with road works being mobilised before end of August 1997. The Main goals of phase one from 1997 to 20Q2 of the programme are as follows:

V. LESSONS LEARNED

(a) Involvement of key players and stakeholders in reform process

The first lesson learnt was that participation of key players and stakeholders is essential for any reform process to succeed. The reason for the success of the reform process in Zambia is the involvement of road users and key players at every level and stage of decision making.

(b) Institutional Structure

An Institutional framework a prerequisite to the successful implementation of any reform process. Unless a sound institutional structure is established with a new working culture and vision, reform process may not work and sustained.

(c) A Change Agent

Staffing of the institutional structure is critical. The ability to deliver by an institutional framework lies on the capacity, capability and creativity of the staff in the organisation. The leadership of the new institution should be imbibed with innovative skill to create change. Change is an on going process and the leadership must have strategic management skill to steer organisation during the transitional period.

(d) Financing arrangement

Sustainable financing arrangements should be put in place with guaranteed funding to ensure credibility and sustenance of the organisation. Unless such an arrangement is made, an organisation without resources is dead.

(e) Accountability

Policies, systems, procedures and regulations should be put in place to ensure total transparency and uncompromising accountability of the road fund. Unless these are established, there is bound to be intimidation, threats, interferences to raid the fund and misuse the fund for purpose other than what it is intended for. The people administering the fund should be above Board dedicated to the vision and concept of road maintenance initiative.

(f) Transparency

Through timely and continuos dissemination of information on the disbursement of the road fund through mass media the NRB was able to prevent misuse of funds and ensure transparency and accountability.

(g) Internal control

By calling for tenders to open bank accounts, having 2 Panel of signatories to sign cheques, appointing internal and external auditors to audit the books on a continuous and timely basis, appointment of private sector Consultants to certify payments and by encouraging contract account, NRB was able to ensure internal control and thus prevent fraudulent transactions.

(h) Participative management

The NRB always adopted a bottom up planning, budgeting and management of the road fund. Decisions on roads to be worked on, type of road maintenance intervention to be adopted, identification and selection of contractors to work on the roads, selection of Consultants to audit the work and certify payments, certification of payments for work done, was all undertaken by the Councils comprising elected representatives of people. All these issues mentioned above were resolved by Councils and recommended to the NRB for its consideration and approval. The involvement of road users in the ownership of roads and maintaining them has been the cardinal driving force for the success of the NRB.

(i) Team Building

NRB was able to win over and build on the private/public sector partnership by disseminating information through sponsored weekly radio programmes, documentary films, press releases, quarterly publication of a journal and discussion programme on television.

(j) Credibility and recognition

Recognition of an institutional structure has to be earned . The NRB earned its recognition through the manner in which it conducted itself and managed the road fund. The credibility of the NRB was evident from the fact that the Committee of Ministers on Road Maintenance Initiative comprising 4 Ministers who met often at the initial stages and gave direction, gradually allowed the NRB to manage its affairs as they found the NRB was on the right course. Threats to disband the Board from several quarters and intimidation died down as the NRB was able to set the right direction and vision. At the initial stages not a day passed without criticism being leveled against the NRB in the Electronic and print media and Parliament. Later the same Parliament and the Committee of Ministers resolved to strengthen the NRB to become the proposed National Roads Authority and manage all encompassing Road Sector Investment Programme.

(k) Impact

During the last 2 years NRB had disbursed K25 billion through 61 Councils and 9 Provincial Road Engineers to maintain the road network throughout the country. Despite the fact 1996 was the election year, the NRB managed the resources to implement the budgeted programme for road maintenance in entirety and thus make the party in power to acknowledge in their manifesto that the NRB had delivered and become a model in the road sector institutional innovation and financing arrangements.

Vl. CONCLUSION

The Zambian experience with involvement of road users in the management of roads includes about two years of experience by the NRB. While we have seen no less than a revolution of the Institutional structure and Road Sector Policy, the output in terms of improved infrastructure is so far limited. But I am proud that we in Zambia have managed to take the first step towards developing adequate and sustainable road services particularly the rural road infrastructure as we have:

An impression should not be created that the road to sector reform is smooth. It is a rough road for all those involved. There exists in the road sector a myriad of vested interest both in the private, public sectors and the donor community. Some may be in conflict with the proposed changes in the management and financing of roads.

The experience in Zambia is that, there must be strong political will at the highest level to embark on the changes and see them through. There needs to be a strong Board and an independent Chairman supported by both the public and private sector. An efficient Secretariat is essential. Fund transparency, accountability, and involvement of the stakeholders is of paramount importance. Without this the stakeholders will note be prepared to travel on the rough road that leads to sustainable maintenance of the network.

The NRB in Zambia is one of many examples of commercially managed Road Funds. The Reform Process in Zambia and the World is not complete yet. The process has begun. We believe that sustainable road infrastructure development lies in handing over ownership, management, responsibility and financing, to the users through a gradual process of sensitisation, involvement, participation, and management of the infrastructure. The pace and the quality of the reform process will depend on our ability to create and manage change.