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Technical Assistance Program of the Federal Republic of Germany 
for Latin American and Caribbean Countries
in Road Conservation

 

International Road Federation (IRF)
Organization of American States (OAS)
Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH
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Between June 1994 and November 2003 the International Road Federation (IRF) received financial and technical assistance from the Government of the Federal Republic of Germany for the execution of a project titled
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"Financial and Institutional Reform of Road Maintenance
in Latin America and the Caribbean"

The reform concept promoted by the project has been developed by UN-ECLAC between 1990 and 1993 with financing from the Government of Germany and technical assistance from GTZ - German Agency for Technical Cooperation. The most important elements of this reform concept are the:
The reason for developing this new concept was to contain the huge losses the countries in Latin America and the Caribbean are facing because of a severe neglect of the conservation of their road networks. Additional vehicle operating and road rehabilitation costs alone are draining the national economies annually of between 1.5% and 3% of their gross national product. Total losses in Latin America and the Caribbean are estimated at more than US$ 10 billion per year. Furthermore, it has been clearly established that the present financial and institutional systems of road conservation in these countries are the root of the problem. Therefore, only a fundamental structural reform of present road conservation systems will be able to cut losses. The concept has been described in detail in the book titled "CAMINOS - Un nuevo enfoque para la Gestión y Conservación de Redes Viales". The English-language version of the book has the title "ROADS - A new approach to Road Network Management and Conservation". 

Mainly, Brazil, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Peru, and Uruguay have benefited from the project, which has been closely cooperating with Inter-American Development Bank and the World Bank.

The project provided Technical Assistance in all aspects connected with the financial and institutional reform of road conservation at the national, regional, and local level. Specific areas of assistance were:

  1. Definition of a reform strategy and a program of action.
  2. Preparation of constitutional and legislative amendments, if required.
  3. Organization of Road Conservation Funds based on road user charges (not on taxes).
  4. Creation of regulatory bodies for the safeguarding of public interest in roads, such as Road Conservation Boards.
  5. Definition, planning and preparation of pilot projects for the management of the conservation of whole road networks based on road performance standards rather than specific works executed.
The main achievements of the project has been as follows:

In Brazil proposals have been made for the financial and institutional reform of road maintenance at the federal level and for the States of Santa Catarina, Rio Grande do Sul, Maranhão, Ceará and Goiás and at the local level for the municipalities Juiz de Fora-MG, Joinville-SC e Porto Alegre-RS. Presently, the project is assisting the federal government, federal congress and several road administrations in there reform efforts. An initiative has been launched to amend the federal constitution to allow for the dedication of fuel taxes. On December 19, 2001 a law has been passed defining the amount of charges for different fuels to be used for the financing of transport infrastructure. This law still has to be regulated. Until now four road maintenance funds have been established on State level (State of Mato Grosso do Sul, State of Mata Grosso, State of Paraná, and State of Goiás). In the States of Ceará, Rio Grande do Sul, and Santa Catarina 17 performance specified road maintenance contracts for a total of 2682 km have been let so far. Additional 56 contracts are under preparation at the federal level and the States of Goiás, Mato Grosso, Mato Grosso do Sul, and Rio Grande do Sul. At the local level, the project has helped the municipality of Santo Antônio da Patrulha to create the first Municipal Road Maintenance Fund in Brazil and is assisting other municipalities like Cascavel-PR, Joinville-SC e Porto Alegre-RS in the implementation of Road Maintenance Funds as well as the implementation of pilot projects for performance specified road maintenance.

In Colombia a draft legislation has been developed for the creation of a Road Maintenance Fund. Furthermore, the project assisted in the implementation of pilot projects for road maintenance based on road performance standards and in introducing a method to calculate the present value of the national road network. For the moment being, the government is not pursuing the creation of a Road Maintenance Fund at the national level. In the municipality of Popayán a comprehensive scheme is being implemented to contract out all road maintenance by performance specifications with special attention being given to the participation of women and the environment.

In Costa Rica the legislation to create a Road Maintenance Fund for national roads has been approved by congress in January 1998.  In close cooperation with the MOPT/GTZ project, the project assisted in the development of the legislation as well as in the dissemination process. On July 2, 2001 a law has been passed to dedicate part of the fuel levies to the rural roads.

In El Salvador the project has assisted the government in creating a Road Maintenance Fund which started to operate only recently. In July 2003, the first Road Fund Congress was held in San Salvador. As a major result the Road Fund Association of Central America has been created.

In Guatemala a draft legislation has been developed for the creation of a Road Maintenance Fund. A number of seminars have been held with representatives of the public and private sector, including the Government, political parties, chambers of commerce and industry as well as the transport associations. On November 26, 1996 the Parliament passed a law to dedicate part of the fuel taxes to a Road Maintenance Trust Fund. Three months later, a governmental decree was issued to create a semi-autonomous road maintenance body, supervised by the Minister of Communications, Transport and Public Works and an Advisory Board, which has executive functions. In addition, several pilot projects for road maintenance based on performance standards have been implemented in Guatemala.

In Honduras the project has assisted the Government to activate the Road Maintenance Fund, which had been legalized by the previous parliament in 1993. The respective regulations were issued in early 1996. Due to political reasons, the implementation of the Road Maintenance Fund has been delayed until early 2000. Presently, a comprehensive scheme of contracting all road maintenance by performance standards is being implemented.

 

In Peru a proposal has been made for the financial and institutional reform of the road sector. In a high level follow up meeting with the participation of the World Bank and the Inter-American Development Bank, Peru has produced a reform policy and a short-term action plan. The aim is to create an autonomous road organization and a Road Maintenance Fund. In addition, a program to develop small road maintenance contractors (microempresas) as well as several road maintenance projects based on road performance standards have been initiated. Unfortunately and despite considerable efforts undertaken by the parliamentarian commission for infrastructure, no Road Maintenance Fund has been created until now. 

 

 

In Nicaragua a draft legislation for the creation of a Road Maintenance Fund has been prepared with financial assistance of the Inter-American Development Bank. The project assisted in the development of the legislation as well as in the dissemination process. The law to create a Road Maintenance Fund has been approved by congress recently.

In Uruguay a high level meeting was held together with the local road association to introduce the reform concept to key political decision-makers. Discussions revealed, that for the time being, a major reform of the road sector is not feasible. Instead, several pilot schemes for road conservation based on road performance standards have been implemented. In addition, the project assisted the road administration of Montevideo to introduce a similar scheme for urban roads, this being the first performance specified road maintenance contract for urban roads in Latin America. Recently, a road user cost study has been completed, which has been financed by a loan of the World Bank.

In order to disseminate the reform concept further, the project has participated in the PROVIAL-Seminars in Panama, Guatemala, Costa Rica, Ecuador, Nicaragua, Uruguay, Brazil, Trinidad and Tobago, Honduras, Venezuela, Colombia, Bolivia, Mexico, Peru, Argentina, and Chile as well as in two meetings of the ministers of transport of South American countries and the NASTO 95 / PROVIAL meeting in Puerto Rico. In all of these meetings the reform concept has received a wide-spread acceptance and in several cases the creation of an autonomous road conservation fund has been declared as the top priority. The project will continue to support these activities in the future. In addition, a newsletter in Spanish is being published periodically to advise on the progress of the financial and institutional reform of road conservation in Latin American and Caribbean countries. Its first edition was published in July 1995 and the thirteenth edition in November 2001.

October 2003


 

For further information and comments please contact:

Dr. Gunter Zietlow

E-mail: Gunter.Zietlowg@ online.de 


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