FINANCING AND MAINTENANCE OF ROAD INFRASTRUCTURE IN THE COUNTIES

PRESENTATION

INSTITUTION OF ENGINEERS OF KENYACONFERENCE

11TH MAY 2012

BY

Dr. Francis N. NyangagaExecutive Director; Kenya Roads Board

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PRESENTATION• BACKGROUND • HISTORICAL PERSPECTIVE• FORMATION OF KRB• RATIONALE FOR REFORMS• REFORMS HISTORY• KRB MANDATES• KRB FUNDING RURAL ROADS• CONSTITUTIONAL DISPENSATION• FUNDING COUNTY ROADS

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BACKGROUND

• At independence, about 42,000 kms of roads, • About 1,800 paved and for the rest, very little was gravel and

most earth• Decade of the 1960s and 1970s, with support from

development partners, there was major investment in growth of infrastructure.

• Resulting in an accelerated growth of the road network.• Government opened up the countryside, providing critical

access to almost all parts of Kenya.• In the 1970s, bilateral donors contributed to RARP and the

bridging and culverting programme, improving earth roads to gravel using labour intensive methods.

• There was a tremendous growth in the paved road network.

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HISTORICAL PERSPECTIVE

• Immediately after independence, the Local Government Act fully implemented.

• County Councils became quite powerful.• They were given resources to provide services to people

within their jurisdictions.• County Councils had capacities to collect revenue and fund

their activities• In the decade of the 1960s, almost all County Councils had

their own plant, equipment and personnel and could adequately maintained rural roads.

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HISTORICAL PERSPECTIVE …2

• In early part of the 1970s, political interference cut off revenue streams of the County Councils

• Maintenance of rural roads started to suffer.• Most of the County Councils could no longer

maintain their plant and equipment, resulting in failure to maintain rural roads.

• Pressure from local communities and politicians resulted in the management of most of the rural roads being transferred to the central government.

• Plant and equipment belonging to county councils, was, however not transferred to central government.

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HISTORICAL PERSPECTIVE …3• As the decade of the 1970s approached its end, the demand for

government resources from other sectors resulted in the road sub-sector receiving less funds for maintenance of roads

• At this point, most of the paved roads were approaching their design lives and needed critical intervention measures.

• This was not forthcoming. • In the early 1980s, roads were receiving just about 10 -15% of

their needs• This was happening in most of Sub-Sahara Africa and there

was concern about loss of road asset value if attention was not paid

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RATIONAL FOR REFORMS

• In the mid 1980’s it was realized that Roads were falling apart and there was danger of loss of the road asset in Sub Saharan Africa which had cost billions of dollars.

• In the late 1980s, United Nations Economic Commission for Africa, World Bank and several other Development Partners concerned with the inefficiencies in the Transport Sector in Sub-Sahara Africa (SSA) and possible loss of the road asset, developed the Sub-Sahara Africa Transport Programme (SSATP)

• A key component of the SSATP was the Road Maintenance Initiative (RMI).

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RATIONALE FOR REFORMS

• Objective of the SSATP was to arrest the deteriorating condition of road assets in SSA and other developing parts of the world.

• Findings strongly pointed towards need for transport sector reforms.

• On the basis of this and similar problems in SSA, SSATP identified the four building blocks of reform in the roads sub sector.

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RATIONALE FOR REFORMS …2

• These were:

– Involving road users in road management.

– Establish a sustainable source of funds for road maintenance

– Allocate clear responsibility of the road network to agencies/institutions to manage

– Improve capacities of road agencies/institutions to manage roads in a business like manner

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REFORMS HISTORY

• In 1992, Government of Kenya adopted the reform building blocks.

• In 1993, the RMLF was established. • Road Sector Institutional Study (1995-1998)• Establishment of KRB – FY 2000/2001• Formation of Road Agencies, and allocating

categories of specific road network to the road authorities in FY 2007/2008.

• Constitutional Promulgation in August 2010

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KENYA ROADS BOARD ACT

• No. 7 of 1999

• Date of Assent: 6th January, 2000.

• Date of Commencement: July 2000.

• Mandates as amended in the Kenya Roads Board Act.

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BROAD OBJECTIVE

6.(1) The object and purpose for which the Board is established is to oversee the road network in Kenya and coordinate the maintenance, rehabilitation and development funded by the Fund and to advise the Minister on all matters related thereto.

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SPECIFIC MANDATES

• co-ordinate the optimal utilization of the Kenya Roads Board Fund (Fund) in implementation of programmes relating to the maintenance, rehabilitation and development of the road network;

• seek to achieve optimal efficiency and cost effectiveness in road works funded by the Fund;

• manage the Fund;

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SPECIFI KRB MANDATES …cont 2

• Develop a five year RISP.• After approval by Minister for Finance, determine the

allocation of financial resources from the Fund or from any other source available to the Board required by road agencies for the maintenance, rehabilitation and development of the road network.

• Funding should ensure that the allocation of funds is pegged to specific categories of roads.

– 40% to A, B and C roads– 32% to roads in constituencies– 15% to roads in cities and municipalities– 1% to roads in National Parks and Game

Reserves.• In essence, 47% is currently funding roads in counties.

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KRB FUNDING RURAL ROADS

• From its formation, KRB has been involved in devolving funding for rural and urban roads.

• The Act set aside a portion of the funds to fund rural roads through the District Roads Committees (DRCs).

• Similarly, a portion of funds were identified for funding local authorities (cities, municipalities, town councils and county councils)

• By 2007/2008, KRB was funding 184 DRCs and 134 local authorities.

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KRB FUNDING RURAL ROADS …2

• KRB received Annual Road Works Programmes (ARWPs) directly from the 184 DRCs and 134 LAs.

• Together with the ARWP from the Roads Department, it compiled and approved the Annual Public Roads Programme (APRP).

• KRB funded and coordinated this programme up till 2008/2009.

• Using very clear guidelines, KRB followed up the implementation of the APRP countrywide through monitoring and value for money audits.

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KRB FUNDING RURAL ROADS …3• In FY 2007/2008 the Kenya Roads Act, established

the road authorities (KeNHA, KeRRA and KURA).• KeRRA was given the mandate to manage rural

roads.• The KRB Act was amended to fund rural roads

through KeRRA.• KeRRA became responsible for receiving ARWPs

and forwarding same to KRB.• In 2009, the Kenya Roads Board Act was amended to

bring on board CRCs, the CRTCs and the Constituency Road Fund Accounts

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CONSTITUTIONAL DISPENSATION• In 2010, Kenya promulgated a new Constitutional• Two major planks of the constitution are;

– the devolving of Government to Counties, and– the Bill of Rights.

• The Bill of Rights requires that every citizen must have a right to quality services.

• These services include right to reasonable access and freedom of movement.

• Movement is facilitated by roads.• Every citizen had a right to goods and services of reasonable

quality.• Roads are a right to Kenyan citizens.

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CONSTITUTIONAL DISPENSATION …2

• 47 counties identified in the constitution.• Each is governed by the County Government, headed by a

governor.• Fourth schedule clarifies the responsibility of the central

government and the county government.• Central Government

– Responsible for road traffic; the construction and operation of national trunk roads; Standards for construction and maintenance of other roads by counties (among others).

• County Government– County roads; Street lighting; traffic and parking; public road

transport (among others).• The Central Government and Counties are independent

and interdependent.

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CONSTITUTIONAL DISPENSATION …3• The constitution identifies two types of roads

– National trunk roads– County roads

• There is need to clearly and without ambiguity define those two types of roads

• The Ministry of Road is working on developing the definitions

• Broadly speaking those roads classified as A, B and C could qualify to be called national trunk roads

• The rest of the roads including all roads in cities, municipalities and town councils are county roads.

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CONSTITUTIONAL DISPENSATION …4

• The constitution provides for the establishment of the Governor supported by an executive Committee.

• Similarly, there will be a County Assembly.• The budget for the county will be passed by the County

Assembly.• This includes the budget for county roads.• This means that the preparations for the ARWP for

county roads will be carried out and finalized at the county level.

• In preparing the ARWP and its budget, there will be no reference to any other government entity.

• The constitution requires that the community must participate in any project using public financing.

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FUNDING COUNTY ROADS

• The counties expect to get their funding from– Consolidated fund– Equalization fund– Contingencies fund– Kenya Roads Board Fund– Development Partner Financing– Loans and grants– Public Sector financing

• Portions of these fund will be used to fund construction, rehabilitation and maintenance of road sin the counties.

• There will be need for the county government to receive guidelines for preparations of the ARWP, using these funds.

• Kenya Roads Board will provide the guidelines, and assist the county government in preparation of the ARWP and its budget.

ARWP PREPARATION CYCLEJuly – KRB releases Ceilings

August – Counties complete ARICS and compile programme/Community Participation

End September – counties submit draft programme for discussion and advise

October-November – counties submit programme to county assemblies for approval

December – KRB compiles APRP

January – Board adopts

Counties ARWPs/APRP

March – National APRP ready for implementation

Annual - Financing as per monthly receipts.

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FUNDING COUNTY ROADS …2• It is envisaged that KRB will be a shared institution.• This means that they will serve both the national government and

the county governments.• The Act will be reviewed to identify the institution that will be

responsible for national trunk roads and the 47 counties as road agencies.

• There will be 48 road agencies funded from the KRBF.• KRB will provide funding in the normal manner, providing funds to

the counties on a monthly basis as and when received.• KRB also foresees itself as the partner to counties during sourcing

of funds (loans, grants or PPPs).• Also, KRB sees itself as the coordinator for management of funds

from bilateral donors.• Similarly, KRB sees itself as the coordinator for management for

development funds for roads at the counties level.

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FUNDING COUNTY ROADS …3

• KRB put the necessary mechanisms and management systems for funding and coordination of road works programme for DRCs (130) and Local Authorities (138).

• It has adopted the same systems with improvements and is currently using them with the road authorities (KeNHA, KeRRA and KURA)

• KRB will review the necessary coding and use the same systems for management of funds at county level.

• To independently deal with each county, there may be need to revisit and amend the mandates of the KRB to align them with the constitution.

• KRB has the capacity and management experience to fund county roads

THANK YOU

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