Road Fund Literature



International Fuel Prices 2005, 4th Edition, Dr. Gerhard P. Metschies, GTZ, 2005

The paper contains diesel and fuel prices of 172 countries of the year 2005, time series of price development (1991 – 2004), fuel subsidies, fuel taxation policies, state financing with fuel tax revenues, and fuel contraband issues.

Road Funds in Latin America, Dr. Gunter Zietlow, University of Birmingham (UK), Senior Road Executives Programme, Road Financing & Road Fund Management, Birmingham, 26-30 April 2004.

Several of the countries in Latin America and the Caribbean have started to put road maintenance on a fee-for-service basis and to transfer road maintenance management from a "government ministry environment" to a "company environment", which seems to be better suited in the long-run to keep roads in good condition. As a result, a new generation of road maintenance funds has been created in El Salvador, Costa Rica, Guatemala, Honduras, Nicaragua and four states of Brazil, Mato Grosso, Mato Grosso do Sul, Paraná, and Goiás. The article discusses the principles for creating sustainable road maintenance funds in general, as well as the approach taken by each of the different countries mentioned above.

Road Financing and Road Funds, World Bank Knowledge Base

This knowledge base deals with the general issue of road financing and road funds, but excludes toll roads and concessions (see main node on Toll Roads and Concessions). The knowledge base covers developing a road financing plan, restructuring road user taxes and charges, putting roads on a fee-for-service basis, restructuring an existing road fund, or setting up a new road fund. With regard to road funds, it covers problems encountered by conventional (first generation) road funds, how to win public support for the concept of commercialization, World Bank and IMF views on the fee-for-service concept, and the question of how to design a commercially managed (second generation) road fund which: (i) minimizes any adverse impacts on the budget; and (ii) strengthens financial discipline to ensure better value for money

Road Funds and Road Maintenance, ADB, July 2003

It is widely accepted that roads play an important role in economic development, and help reduce poverty. However, the roads in many countries are poorly maintained.

Adequate funding for road maintenance is an important factor. This report is the result of a study to review international experience with the implementation of road fund initiatives, to assess how this experience can best be applied in Asia.

The report includes:

Assessment of the issues and challenges to be addressed, resulting from research of existing initiatives and fact finding visits to several countries in Asia.

A summary of generally accepted best practice, and recommendations for measures to overcome difficulties that have been encountered with some initiatives.

A review of existing road fund initiatives.

Report of a regional workshop where senior representatives from twenty Asian countries discussed road fund initiatives and made recommendations for future improvements.

A bibliography of relevant papers and documents.

An overriding theme resulting from this study is the need to consider road funding within the wider context of comprehensive road sector reform, with proper attention to long term consistency and coordination between all stakeholders.

Finance, Organization and Participation - Country-specific Solutions for Rural Road Networks, Gerhard P. Metschies, Siem Rap, May 15, 2002.

This paper points out the need for rural transport and rural roads, although conditions of rural roads are often unfavourable and "uneconomical" because of their low traffic volume, their short service life and their relatively high maintenance costs, with the consequence that frequently "nobody wants them, neither the local ministries, nor the foreign donors."

The paper identifies the aspects of FINANCE, ORGANISATION and PARTICIPATION as the three main factors for solving the rural roads problem, considering each of them equally important.

Road Funds Revisited: A Preliminary Appraisal of the Effectiveness of "Second Generation" Road Funds, Kenneth M. Gwilliam, Ajay Kumar, TWU-47, World Bank, January 2002

Systematic underfunding and inefficient execution has been a perennial problem in the road sector. "Second generation road funds" involving direct payment of a levy on fuel tax and other revenues directly to a fund managed by a board representing user interest, have been established in a number of countries to address this. Such developments have long been viewed by macroeconomists as crude earmarking, and opposed because of their damaging effects on fiscal flexibility. In an earlier article Gwilliam and Shalizi argued that such road funds should be subject to a "sunset provision" as an interim step towards either full commercialization of road maintenance or return to good governance within the public sector, and that in deciding whether to create (or retain) a fund decision makers should estimate its effect on resource allocation, operational efficiency and rent seeking.

This article reviews the empirical evidence with road funds in Africa. It observes that the new road funds have not, in Practice, undermined fiscal flexibility, but have been the instrument through which the process of administration of road funding and its outputs have been somewhat improved in terms of execution capability and ultimately road condition.

Road Fund in Ethopia: From Inception to Realization, Office of the Road Fund Administration, February, 2001.

The paper discusses, in its six sections, the core areas that should be dealt in relation to Road Fund in Ethiopia. The first part is devoted to discussion and disclosure of conceptual matters in general. Some points are raised as a prelude to proceed at ease to the body of the paper, and others are merely views to deliver key aspects that need to be addressed prior to dwelling into local situation. Background information on Road and Road Transport is provided to inform the reader about the general situation of the industry before proceeding to next sections. Separate qualitative presentation is made about the current situation of Road Fund in Ethiopia with shortly verified justification. The fourth section is the core part of the paper that covers more detailed analytical understanding of current situation and on-going activities. Presentation is made in the form of SWOT analysis (strengths, weaknesses, opportunities, and threats). Some of the bullet points lead to summary and recommendation section of the paper. Finally, basic quantitative description of the Road Fund performance in Ethiopia is presented in section six of the paper.

Involvement of Road Users in the Management of Roads, Public Private Partnership - The Zambia Roads Board Experience, Raymond A. Jhala, Chairman, National Roads Board, Paper Presented at the Workshop on Road Management and Finance, Jamaica, June 3 - 4, 1998.

The paper describes how "a Private/Public Partnership in Road Maintenance" has been introduced in Zambia, and shares with you our experience on the extent user involvement has met the objectives stated above and contributed towards development of a sustainable road sector. It gives an outline of proposed policy reforms and the key features of the new institutional structure approved so far. It will follow with a more detailed overview of how the National Roads Board has organised its operations and built public support for the Road Fund and its actions. The paper will outline how the Board is now managing the planning and execution of a road maintenance programme and how the Board is taking part in the Road Sector Investment Programme (ROADSIP). The paper concludes with an assessment of the extent that a private/public sector partnership in management of roads in Zambia has met the initial objectives, and gives views on the further development of the road sector in Zambia.

Road Funds, User Charges and Taxes, Kenneth M. Gwilliam, Zmarak M. Shalizi, Discussion Paper, TWU-26, The World Bank, September 1997.

In general, there are two long-term institutional options for reconciling fiscal prudence with asset maintenance: a road agency that is operated commercially (subject to the nor-mal oversight of behavior accorded to privatized monopolies), or a reformed and well-functioning budget process. This article argues that road funds must be viewed as a provisional, case-specific intermediate step in the direction of one of the long-term solutions. The role and nature of road funds should be assessed not on general principles but on a case-by-case basis through the analysis of likely micro- and macroeconomic effects. The article recommends indicators for use in specific cases to determine whether a road fund should be introduced, continued, or abolished.

Dedicated Road Funds: A Preliminary View on a World Bank Initiative, Barry H. Potter, IMF Paper on Policy Analysis and Assessment, International Monetary Fund, Washington D.C., June 1997.

In the past, Road Funds have been criticized as inconsistent with effective expenditure control, as distorting the allocation of public sector resources, and as incompatible with efficient management of government resources. This paper considers whether there is a case for a more benevolent view of the new "second generation" dedicated Road Funds, which have emerged in recent years. The paper concludes that, where a Road Fund pursues a genuine purchasing agency approach, then in principle it can be an efficient means of delivering road maintenance and, perhaps road capital expenditures. But a formidable list of institutional and financial requirements would have to be satisfied for a dedicated Road Fund to be appropriate. These conditions are more likely to be satisfied in developed economies, with efficient budgetary systems already in place. In many developing countries, the better solution may be to reform overall budget institutions, procedures and practices. But if the institutional and financial requirements for an efficient fund can be met, a Road Fund may be appropriate. The question is just how often the right conditions will arise.

Management of New Zealand's National Roads Fund, M F Fletcher and D R Rendall, Transit New Zealand, Philippines Country-Level Workshop on Institutional Development for the Maintenance of National Road Networks, 30 May 1997.

This paper covers: The National Roads Fund/Account (History, Delivery Mechanisms, and Board Structures), the Funding Cycle, the Revenue, the Expenditure the Background

(National Land Transport Programme, Cash Flows, The Audit Function) and Conclusion.

The paper addresses each in turn along what lessons have been learnt since Roads Funds were first established in New Zealand.

The Highway Trust Fund, Public Roads, Special Edition 1996, U.S. Department of Transportation.

The paper gives a short overview on the Highway Trust Fund of the United States of America.


Literature and Presentations in Spanish

Presentaciones selecionadas del Primer Congreso de Fondos Viales, San Salvador, julio 2003

Los Fondos Viales en América Latina, Dr. Gunter Zietlow, Ing. Alberto Bull, IRF/OEA/CEPAL/GTZ, San Salvador, julio 2003

Cuadro de Beneficios con la Creación del Fondo de Conservación Vial (FOVIAL), FOVIAL, San Salvador, 2002.

Gestión de la Conservación Vial en Honduras a través del Fondo Vial, Presentación elaborado por Sandra Zelaya, Fondo Vial de Honduras, Septiembre de 2002. Texto adicional.

FOVIAL - Campaña Publicitaria, Presentación, FOVIAL, San Salvador, 2002.

Campaña Publicitarias de Guatemala y Nicaragua, Video spots de COVIAL y FOMAV. Archivos con 1.5 MB hasta 2 MB cada uno. Requieren Windows Media Player.

Reglamento sobre el manejo, normalización y responsabilidades para la inversión pública en la red cantonal, Decreto No. 30263-MOPT, San José, Costa Rica, 5.3.2002.

Los Fondos de Conservación Vial en América Latina y el Caribe, Dr. Gunter Zietlow, Washington D.C., Agosto de 2001.

Ley de  la Creación del Consejo Nacional de Vialidad de Costa Rica, 27 de abril de 1998.Ley de Simplificación y Eficiencia Tributarias, 2 de julio de 2001 (Cambios al financiamiento del Consejo Nacional de Vialidad de Costa Rica). 

Reglamento del Fondo de Conservación Vial (FOVIAL) de El Salvador, 2001

Ley del Fondo de Conservación Vial - FOVIAL de El Salvador, Decreto No. 208, San Salvador, 30 de noviembre de 2000.

Ley Creadora del Fondo de Mantenimiento Vial de Nicaragua, Junio de 2000. 

Progreso de la Conservación Vial en América Latina, BOLETIN FAL - FACILITACIÓN DEL COMERCIO Y EL TRANSPORTE EN AMÉRICA LATINA Y EL CARIBE, CEPAL,  Edición No.160, diciembre 1999.

Nuevas Actitudes de los Usuarios de los Organismos Viales Frente de los Usuarios, BOLETIN FAL - FACILITACIÓN DEL COMERCIO Y EL TRANSPORTE EN AMÉRICA LATINA Y EL CARIBE, CEPAL,  Edición No.146, septiembre 1998.

Legislación Modelo de Conservación Vial, Alberto Bull, Juan Alberto Rabah, Carlos Villegas, Naciones Unidas, Comisión Economica para América Latina y el Caribe, Santiago de Chile, 1995.

CAMINOS - Un Nuevo Enfoque para la Gestión y Conservación de Redes Viales Andreas Schliessler , Alberto Bull, Naciones Unidas - Comisión Economica para América Latina y el Caribe, Santiago de Chile, Septiembre de 1994. PDF-file

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