News:
December 11, 2015
The Board of Directors of the Ghana Road Fund has sent an SOS message to the Parliament of Ghana, pleading for an immediate intervention to help save the Fund from collapsing.
According to the Board, the Road Fund has for the past few years survived on borrowed funds sourced from the Social Security and National Insurance Trust (SSNIT) but warned that any further borrowing will jeopardize the Fund since a significant portion of the revenue would end up being used to service the loan.
The Road Fund is indebted to SSNIT to the tune of GH₵323million as at October 31, 2015.
The Fund, according to the Board, borrowed GH₵85million and GH₵109million on separate occasions to defray its indebtedness to contractors in 2008 and 2010 respectively but has since not been able to fully repay the loan.
The non-servicing of the loan, the Board noted in its SOS message dubbed ‘Brief on State of the Ghana Road Fund’ which was presented to Parliamentary Select Committee on Roads and Transport, has attracted interest payment over the period which has been capitalized on the outstanding principal.
SSNIT, has served demand notices for the repayment of the loan and accrued interest.
According to the Board, to save itself from any mishap, it has prepared a payment plan to repay the loan over a five year period beginning in 2016.
That means as much as GH₵95.22million, representing 28.25% of the GH₵337million revenue projected for 2016 and beyond will have to be set aside to service the SSNIT loan.
This, the Board noted, will bring about some shortfalls in revenue to manage the Fund and therefore called on Parliament to intervene.
For instance, the total amount estimated by the Road Agencies for road maintenance in the year 2015 was about GH₵611.06million but only GH₵285.90million was provided by the Road Fund, which was less than 50% of the road maintenance program for that year, leaving a significant backlog as far as maintenance is concerned.
That aside, there are also fears that the Fund will miss its target of GH₵322.21million for the 2015 financial year having initially recorded GH₵298.38million between January and November 2015.
To address the shortfalls in revenue to finance road maintenance adequately, the Board is proposing an increment on the levy on fuel and the road and bridge tolls in accordance with Section 6(2)(b) of the Road Fund Act to provide additional funds for the Road Fund.
The Board also proposed abolishing the current management positions within the Fund’s Secretariat as a key restructuring exercise to improve on efficiency.
It also proposed that repayment of the SSNIT loan which was suspended in July 2011 be re-activated following the expiry of the tenure of the loan without repayment by the Fund,” noted the Board.