Gov’t collateralised Road Fund for GHȻ1.5bn loan
Motorists may have to endure the poor state of our roads a little longer because funds accruing to the Road Fund are being used to service a loan.
According to Deputy Road and Highways Minister, Anthony Karbo, the Ministry is unable to access the Fund as a result of the decision of the previous administration to use it as collateral for a GHȻ1.5billion loan it contracted from United Bank for Africa (UBA) last year.
Mr. Karbo disclosed on the Super Morning Show on Joy FM, Tuesday, October 3, 2017, the loan was contracted by the John Mahama-led administration to pay debts owed to contractors who had built some roads.
As part of the deal, the total annual regular inflow of GHȻ1.2biilion into the road Fund is to be used to finance the loan, leaving the sector Ministry no access to road tolls, taxes and axle load fees paid into the Fund by motorists.
The loan agreement, according to Mr. Karbo, was ratified by Parliament some six months to the elections in 2016.
The state of many of the country’s roads has continuously deteriorated while the motorists continue to pay for using such roads, some of which have become death traps and the cause deadly crashes.
But the new government in July said it met no money in the Fund to enable it to undertake maintenance works on roads including the Accra-Tema motorway constructed over half a century ago.
Mr. Karbo said the Ministry has so far settled GHȻ750million of the loan and expects the full amount to be paid by August 2018.
The Ghana Road Fund was established in 1985 to provide a secure source of funding for preservation of Ghana’s road network. It was restructured under the Road Fund Act, Act 536, 1997.
The sources of revenue into the Fund are derived from levies on petroleum products, bridges, ferries and road tolls collected by the Highway Authority. Other sources of funding include; vehicle License and inspection fees; international transit fees, collected from foreign vehicles entering the country.
Monies collected are channelled into the Road Fund accounts established for the purpose.
These sources yield an average of GHȻ1.2billion each year but the Deputy Minister appears amazed as to why the previous regime would commit itself to road projects costing GHȻ17billion consequently compelling it to collateralise the Road Fund for a loan.
“We get 1.2bn [cedis] but we have commitments of 17bn cedis that we have to pay; where are we going to get that money from?
The Deputy Minister complained that: “The entire Roads Ministry is saddled with a lot of financial challenges.”
However, Mr. Karbo said the current administration is determined to fix the challenge indicating that maintenance works on some major roads including the motorway would likely start by the end of October. “I am aware of discussions ongoing for Ministry of Finance to release some funds so that we can get underway with some maintenance works.
“There’s some work going on to deal with the problem of the motorway once and for all and it’s one of the top priorities of the government,” Mr. Karbo assured.
He told the host of the programme, Kojo Yankson that the “Government in the process of redesigning [into six lanes] and looking for partners to take up the project fully.”