On The Road Again

What priorities have been set for the NRFA for the next three to four years?

The main task of the NRFA is management of the road fund. Over the coming few years we will work toward our vision of creating a sustainable road fund. Our key thematic areas are resource mobilization and fiduciary management, while ascertaining value for money. We source funds for the sector from our corporate partners in the form of loans and grants, and from the government through fuel levy and tolls, our corporate partners, and through grants. Once these funds are accessed, we manage them prudently through accountability measures, transparency, and economic utilization. There is huge demand for roads, the key to economic development. However, there is a gap between demand and supply. At NRFA, we are devising creative means of securing funds. Looking ahead, we envision a strengthened road fund based on the user-pay principle.

How will the Link Zambia 8000 project improve the efficiency of the road transport sector?

Link Zambia 8000 is one of several projects in the road sector. There is also Pave Zambia 2000, which will develop 2,000km of roads, the L-400, designed to enhance connectivity in the capital city, Lusaka, and other ongoing projects linking Botswana and other areas. Zambia has eight neighbors. In the past, this was seen as a disadvantage, but we are changing that mindset. We are strategically located, and should be land-linked as opposed to landlocked. Link Zambia 8000 will operate like a river basin with tributaries and will enhance trade and reduce transaction costs. Nearly every industry can benefit from roads, especially agriculture and mining. These sectors drive the economy and are dependent on the efficiency of the transport system. Also, we can improve the living standards of people in rural areas by increasing access to diverse amenities.

How do you expect the conditions of the 67,000km Zambian road network to evolve?

In general, our paved roads are relative to feeder roads and are generally in good condition. An integral aspect of good road condition is the development of a comprehensive maintenance system, which has since been developed and will be fully supported by NRFA. A stitch-in-time saves nine. Thus, the importance of maintenance cannot be over-emphasized.

What role can PPPs play in developing Zambia’s transportation infrastructure?

There are several forms of PPPs being used in this country; Mongo-Kalabo, L-400, Mansa-Luwingu, and Mbala-Nakonde were all funded by some form of PPP. We are, however, not utilizing PPPs to our full potential. We need to do more to entice private companies to partner with the government to fund roads in the form of PPPs.

What will be the impact of the Kazungula bridge project?

If you visit Kazungula today, you will observe a long queue of trucks on both the Botswanan and Zambian side that can occasionally stretch for kilometers. The bridge will reduce the time of border crossings thereby cutting costs for transporters. The bridge provides a strategic link on the North-South Corridor, which, once completed, will enhance trade.

To what extent does the fluctuation of the kwacha impact road construction?

Any industry, including the road construction industry, needs currency predictability. Stability in the exchange rate is thus the preferred norm by contractors. The Bank of Zambia endeavors to ensure such stability.

What are the main achievements of the NRFA?

The audited accounts have been unqualified since inception in 2006. We have successfully coordinated the budgeting process through the road sector annual work plans, the basis for financing the sector. We have also had successful technical audits, conducted investigations and field visits, and enhanced our internal controls. Additionally, we have created a strong corporate governance system through our code of ethics and we have a strong Integrity Committee, which recently won a Commitment Award from the Anti-Corruption Commission. We have facilitated capacity building of local contractors through support to the National Council for Construction. We have also initiated the Construction Finance Initiative, which is designed to enhance access to financial instruments such as bid bonds, payment guarantees, and performance guarantees by local contractors. More local contractors on board means increased competition and lower unit costs and can thus do more for the same amount of funding. Looking ahead, we want to broaden our revenue streams, increase fiduciary oversight on road finances, and enhance technical audits and value for money, thus, our vision: A Sustainable Road Fund.

© The Business Year – June 2015