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Peter Mutharika approves toll gates, other reforms

President Peter Mutharika has approved a set of reforms in the road sector which includes the introduction of toll gates and an automated fuel levy adjustment system.

Other reforms approved include the introduction of a Roads Fund Bond to help raise financing for road sector development projects from the market as well as introduction of an Automate Payment System for settling of debts with contractors by the Roads Fund Administration (RFA).

RFA has since promised value for money from the reforms, saying it will ensure that money generated is providing value as required and commits itself to internal as well as external audits and rigorous processes when it comes to processing payments for all road works invoices.

RFA says the objective of the toll gate is to diversify and provide an alternative source of raising revenue for RFA which currently only depends on the fuel levy and international transit fees for its revenue.

The fund says the Road Fund Bond will help in raising financing from the market and use the resources for specific projects, especially in periodic maintenance.

“Instead of routine works such as spot repairs and pothole patching, our implementing agent, the Roads Authority, will identify specific roads where maintenance works would be carried out such as road widening of shoulders and resurfacing.

“We expect to derive economic benefits immediately through a well repaired road network whilst payment will be made over a longer period say three to five years,” says RFA, adding: “We are already in serious discussions with financial institutions and also currently waiting for the RA to undertake the procurement process.”

It says the bond would be the first of its kind and the administration hopes to conclude its arrangements by March 2016.

On the automate payment system, RFA says it is aimed at improving efficiencies and reduce costs in the fund’s internal business processes, saying the amount of paper work will be reduced at the agency where a lot of payments are made to contractors.

“This [the automate system] will also speed up payment processes,” says RFA, which is currently in the process of procuring a software for the system.

On the Automated Fuel Levy, RFA says it will make the fuel levy to be a percentage of fuel price and not an absolute figure and that this will help when prices change as the fuel levy will also change automatically according to its set percentage.

The road levy on petrol has since been increased by 63.1 percent from K37 per litre to K60.34 while on diesel, the levy has been increased by 133 percent from K32 per litre to K74.82, according to the RFA.

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