Treasury formulates policy to address toll pricing

The National Treasury has drafted a road tolling policy to inform the price motorists will be pay to use selected roads.

The policy, which is awaiting cabinet approval, is part of government efforts to mobilize resources to fund expensive road construction and maintenance projects.

The re-introduction of road tolls comes after the government admitted it was not mobilizing enough funds through the road maintenance fuel levy to finance big ticket road projects.

According to Treasury estimates, the government collects an average of Sh50 billion from the levy.

Treasury Cabinet Secretary Henry Rotich said on Tuesday that the policy would ensure motorists are not overly burdened with high costs.

“We shall be reinforcing the toll fund and will be used solely to meet availability payment obligation by the government. In the early years of the project we anticipate that toll receipts will not be sufficient and we are ready to step in,” Mr Rotich said.

The policy is expected to structure the road toll system by selecting the roads that will be classified as toll roads as well as the systems to be used.

It is expected that the government will introduce a system that prices vehicle classes differently.

“Further the government plans to take the traffic risks on these projects by offering availability payments based on performance standards,” he said.

The road toll has become a sticky issue with motorists arguing it amounts to double taxation.

Government officials have been at pains to show how the introduction of tolls will not pile further financial burden on motorists.

Kenya National Highways Authority Director General Eng Peter Mundinia said funds collected from tolled roads will be used to maintain the roads

“All these roads that shall be put under this program shall not receive Road Maintenance Fuel Levy,” Eng Mundinia said.

They were speaking during the Kenya Public Private Partnership Roads Investor Conference as the government woes potential financiers and contractors.

The government is using the conference to pre qualify financiers and contractors interested in taking up road projects.

Transport Cabinet Secretary James Macharia said of the 161,000 kilometers of roads in Kenya, only 14,000 kilometers are paved.

This even as the ministry was allocated Sh140 billion in the 2016/17 budget, piling pressure on implementation of projects.

“That demonstrates a very key opportunity for those in the private sector. There is a need for which we have no money. To do so we require only one thing, to have innovative financing structures,” Mr Macharia told investors.

The government has earmarked three roads to be built under the PPP framework expected to cost Sh320 billion.