Road maintenance cost to come from price of fuel, tolls, taxes, fees: draft policy says

Highlights: 

• Govt to collect Tk1 per litre, cubic metre of fuel used by transport
• Additional cost for transport owners expected to be over Tk5,000cr annually
• Budget for maintenance last fiscal year was Tk2,687cr
• 47,76, 944 registered vehicles across the country
• Fund embezzlement, further rise in transport cost fear

The government is mulling collecting road maintenance charges from the price of fuel used by road vehicles, stoking fears of a further increase in transport prices.

In a draft of the Road Maintenance Fund Board Rules-2021, the Department of Road Transport and Highways proposed that the government collect Tk1 per litre and cubic metre from the price of fuel, including petrol, octane, diesel, CNG or LNG, used in all types of motor vehicles such as buses, private cars, motorcycles, auto-rickshaws and trucks.

The money will be spent on maintenance, repair and renovation of highways.

The draft, signed by the department's Deputy Secretary Farzana Jasmine, was sent to the ministry concerned on Tuesday. It asked for further review and comments by 25 December.

The Business Standard has obtained a copy of the draft. 

According to the annual reports of the Bangladesh Petroleum Corporation (BPC) and Petrobangla, if road maintenance charges are levied at the rate of Tk1 per litre of fuel oil used in motor vehicles and per cubic metre for Compressed natural gas (CNG) and Liquefied natural gas (LNG), vehicle owners will have to bear more than Tk14 crore per day, which will be around over Tk5,000cr annually. 

As a result, passengers will also have to pay extra fare and the cost of transporting goods will increase further. 

A recent report by the Ministry of Home Affairs had said that the general public is dissatisfied with the increase in fares of passenger and freight vehicles following the rise in diesel prices.

According to the annual report of the Ministry of Energy and Mineral Resources for the fiscal year 2019-2020, the amount of CNG used daily by vehicles is 13.36 crore cubic feet. In other words, Tk13.36cr will be deposited daily to the road maintenance fund from here.

In the last fiscal year 2020-2021, BPC supplied 39.64 lakh tonnes of fuel oil for transports. If a charge of Tk1 per litre is levied, the annual maintenance charge generated from fuel oil will be Tk396 crore.

At present, the Ministry of Finance allocates funds in the budget every year for the repair and maintenance of roads, highways and bridges. 

In the fiscal year 2020-21, the allocation for this was Tk2,687cr, of which almost the entire amount was spent. 

If a road maintenance fund is formed, the money will be spent from here.

According to the Bangladesh Road Transport Authority, the number of registered motor vehicles across the country till 30 June was 47,76,944. Most of the public transport and private vehicles are gas-powered, while trucks and goods-carrying vehicles and motorcycles are oil-powered.

All existing fees, taxes and import duties for the registration and movement of various vehicles plying on the road have been asked to be included in the road maintenance fund. 

In addition, the roads and highways department has proposed adding 100% of the toll collected from roads, bridges and ferries under it and 25% of the toll collected by the Bangladesh Bridge Authority to this fund.

Professor at Bangladesh University of Engineering and transport expert Shamsul Haque told The Business Standard that in 2000, when the BNP was in power, an initiative was taken to set up the fund with the help of the World Bank. But it did not materialise due to a dispute between the then ministers M Saifur Rahman and Nazmul Huda over whether the fund would be controlled by the finance ministry or the communications ministry.

When the law was finally enacted in 2013, it was discussed that 2% of the total cost of any infrastructure project should be allocated for maintenance, which has not been done yet. New roads are being constructed, but the charge for maintenance isn't being set aside.

"Imposing road maintenance charges on the cost of fuel, including diesel and CNG, does not make sense now because the price of fuel changes globally…it will put pressure on the people," he said.

"In my opinion, this fund can be formed with all kinds of BRTA fees and taxes and all kinds of tolls," he said. In future, the government will impose tolls on all highways and then the fund will be much bigger. If additional funds are required for road maintenance, alternative sources may be sought.

An official of the maintenance branch of the department, who did not want to be named, told TBS that the policy was being formulated under the Road Maintenance Fund Board Act, 2013 and implementation of the policy would be done after issuing a gazette following the approval of the cabinet within the current financial year.

According to the draft rules, a board will be formed to manage the road maintenance fund. Other expenses, including salaries and allowances of the officers and employees of the board, will also be from the fund.

The roads and highways department will send the proposed road maintenance and repair programme to the board for the next financial year within the last three months of each financial year.

The board will meet in the first month of the financial year to examine the proposal and approve it in consultation with the Roads and Highways Department. The board will send the approved programme to the department for implementation.

In addition to the annual programme, in case of emergency, subject to the approval of the board meeting in consultation with the government, the department may be responsible for the implementation of any emergency programme.

Md Shamsul Huq, however, expressed fear of embezzling the funds. He said that projects like construction of flyovers and roads are visible so misappropriation of funds can be observed. But road maintenance was not like this and there would be more opportunities for wrong doings. 

"Therefore, road maintenance activities need to be independently evaluated by third parties…," he added.