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Overview of Ethiopian Road Fund

Overview of Ethiopian Road Fund. By: Rashid Mohammed Director General of RF. General Background. 1.1 Objective of the fund is to finance road maintenance and road safety activities in the country 1.2 Proclaimed source of Fund: Government Budget, Road Maintenance Fuel Levy;

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Overview of Ethiopian Road Fund

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  1. Overview of Ethiopian Road Fund By: Rashid Mohammed Director General of RF

  2. General Background 1.1 Objective of the fund is to finance road maintenance and road safety activities in the country 1.2 Proclaimed source of Fund: • Government Budget, • Road Maintenance Fuel Levy; • Annual vehicle license renewal fee based on axle load; • Overloading fine; • Any other road tariff levied as may be necessary;

  3. 1.3 Management of Fund 1.3.1 Road Fund Board • Board members by appointment or representation • Chairperson and six Federal government representatives by appointment • Five regional state representatives by appointment • Four private sector representatives by election • 2 dry cargo transport • 1 liquid cargo transport • 1 passenger transport • Office term of the Board is two years

  4. 1.3.2 Office of the Road fund ( the secretariat) • Officially opened on June/98 • Office head appointed by government • Operating (recurrent) budget of the office is allocated from government budget (not from the fund)

  5. 1.4 Organization and staffing • Office of the Road Fund is Organized Under Ministry of Works And Urban Development with three departments and one service: The over all man power is 20 including the director general • Finance Department (five staffs) • Planning and Programming Department (four staffs) • Engineering Department (five staffs) • Audit service (five staffs) • The office obtain administrative support from the unit organized under the ministry and stick to prime activities;

  6. 2 Road Fund 2.1 Revenue Collection • Road fund revenue from fuel levy is collected and deposited to the road fund special account by Ethiopian Petroleum Company (it incorporates municipal tax, value added tax and RF fuel levy) • Total collection over the last nine years amounts to Birr 3.059 billion. (about 349.6 million USD)

  7. 2.2 Road Fund Budget (million Birr)

  8. 2.3 Basic Distribution to Road Agencies • 65% to Federal Road Agencies • 25% to Regional Road Agencies • 10% to selected Municipalities

  9. 2.4 Criteria for Allocation • Regions; as per their respective percentage share from the total rural road net work • Municipalities; (Addis Ababa 50% of municipal budget share and to rest of municipal cities as per their respective percentage share from the total municipal road net work

  10. 2.5 Disbursement from the fund

  11. 3 Monitoring and Evaluation 3.1 Financial Audit; • Road agencies book of accounts is audited by private audit firm • Audit team at the office is also examine their book of accounts and follow-up the remedial action taken as per the recommendation and finding of the external audit

  12. 3.2 Technical Audit and follow-up • Consultants are employed and take measurement of the work done and approve payment certificate prepared by the road agencies; • Engineering staff at the office will take part in verifying the quality of the work executed on a sample bases; • Road agencies report on their physical and financial plan accomplishment to the office; • Regular field visit is made by the office staffs, • Annual consultative meeting is organized by the office;

  13. 4. Other major achievements 4.1 Financial and technical audit service study • Objectives • Diagnosis of the set of procedures and mechanisms used in the selection, implementation and supervision of road maintenance works; • Verification that the works performed by the road agencies and contractors fulfill the concerns of quality, economy and efficiency; • Identification of implementation constraints or shortcomings and the proposals of recommendation to improve the existing arrangements; • Development of technical and financial audit procedures for the future use of the Ethiopian Road Fund

  14. 4.2 Road Financing Study • Goal and objectives • Review financing arrangements for road maintenance and establish road maintenance needs; • Develop arrangements to maintain the road network on a sustainable basis; • Develop arrangements to strengthen management of the road fund; • Develop arrangements to strengthen Road Fund Performance; • Evaluate and strengthen capacity of the Road Fund Secretariat to perform services as laid out in the act; and • Review institutional arrangements of the Road Fund;

  15. 5. Road Condition in Ethiopia

  16. 7. Remedial measures • Budget allocated for the purchase of machineries and equipment; • Training programs organized and financed for machine operators, foremen, electricians, etc.; • consultants and supervisors employed and engaged on quality control tasks; • payment certificate based payment arrangement is in place;

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