Zambia’s K5.4 Billion Road Sector Budget

Zambia’s K5.4 Billion Road Sector Budget

“Road travel should not be riskier than any other daily activity we undertake. Also tackling corruption in the road sector will require a comprehensive response of integrated measures”.

By Daniel Mwamba

The National Road Fund Agency (NRFA) just announced the 2015 road sector budget of K5.4 billion which is 11% of 2015 National budget (K46.7 Billion). According to media reports, the Road Development Agency (RDA ) received a huge chunk of about K4.9 billion, the Ministry of Local Government and Housing K259 million, Road Transport and Safety Agency (RTSA) K205 million, National Council for Construction (NCC) received K8 million and others not specified.

Off course, this huge allocation is in accordance with the World Bank recommended spends of 10-20% for developing countries’ budgets on transport sectors. An extensive and well-maintained network of primary, secondary, and feeder roads has been recognised as critical for economic growth and poverty alleviation. Road investment can boost agricultural productivity and growth in Zambia. And increases in investment in roads lead to a strong and positive increase in labour productivity. Therefore, well planned, properly maintained, and safe roads are critical for economic growth and overcoming poverty.

Road Crashes

While roads are vital for our daily lives, sadly every single day in Zambia there are serious road crashes, with thousands of people being killed or severely injured each year. These crashes have a major human and financial cost to the country. Unlike other causes of death such us malaria, cancer, etc, road crashes tend to strike the young, healthy and productive. And according to the United Nations, road crashes cost low and middle income economies between 2 – 7 % of GDP, with costs falling on families, businesses, the emergency services, hospitals, long term disability, insurance payouts others is diffuse and not well understood. The financial cost is borne by taxpayers and businesses through taxation and direct costs. Motor insurance is a significant direct expense for many households and businesses. Companies can face the loss of key employees or extended periods of absence from work. Road crashes can cost our country 7% GDP or K4 Billion which is not far from the entire NRFA K5.4 Billion budget allocation this year.

Corruption in Road Sector

The other concern beside road crashes costing our economy is road construction corruption. The World Bank estimates that corruption in transport projects can account for as much as 5% to 20% of transaction costs. Road construction projects provide the most opportunities for public servants to enrich themselves. Transparency International’s 2011 Bribe Payers Index reported that construction and public works are perceived to have the highest level of bribery of any sector, higher than both the arms industry and the oil and gas sector.

Transport projects are susceptible to corruption due to the high value of many contracts, imagine Road Development Agency’s K4.9 Billion allocation, a good 5% of the national cake. Corruption may occur in the form of bribery, extortion, fraud or collusion. It can take place during any phase of a project, from identification through to operation and maintenance. The tender process is particularly sensitive to corruption risks.

The immediate impacts of corruption in the sector are poor-quality projects, where the funds used to pay bribes are taken from finance intended for the works, and / or more expensive projects where the cost of bribes is incorporated into tenders. The broader societal impacts can be severe with reduced quality of transportation services and also an increase in road crashes.

With road construction costs often amounting up to, or even exceeding, one million dollars per kilometre, there are numerous options to gain large revenues through corruption in this phase. One of the largest costs components in road construction is the building material, not only concrete and asphalt, but stones and gravel. Usually, materials are not included in lump-sum contracts, but are accounted according to quantities. Materials delivered to site may be not of contract or invoiced quality or quantity. Bribes may be offered or threats may be made by suppliers to those responsible for recording site deliveries in order for false records to be made stating that materials of proper quality and quantity were delivered.

In relation to each phase of the works on any part of the road, works may be carried out defectively and the defects concealed. Such defects may include: improper excavation, laying of materials in insufficient depths and widths, use of unsuitable materials, defective embankment works, and defective surfacing. If you go around the country, where they are doing the so called “paving” you will see these. Approvals and certificates of payment for such defective works may be obtained through bribes or threats made to the certifier.

Stakeholder participation

These two problems put together – corruption and road crashes consume the entire road sector budget. To overcome this, I urge our government to develop a road strategy that can be overseen and monitored by a multi-disciplinary taskforce comprised of stakeholders across the road system including charities and education institutions. Led by Government, the strategy should set clear performance goals for the reduction of road crashes and corruption. Road travel should not be riskier than any other daily activity we undertake. Also tackling corruption in the road sector will require a comprehensive response of integrated measures. Stakeholder participation is a prerequisite to effectively identifying and addressing our road problems. We should not be wasting an estimated K4 Billion on road crashes and 20% of construction costs as a result of corruption.

Daniel Mwamba is the Chairman for the Zambian Road Safety Trust.