Content uploaded by Charles Amoatey
Author content
All content in this area was uploaded by Charles Amoatey on Mar 31, 2014
Content may be subject to copyright.
USER FINANCED ROAD INFRASTRUCTURE IN GHANA:
OPPORTUNITIES FOR ROAD CONCESSIONING
Von der Fakultät Bau- und Umweltingenieurwissenschaften der Universität Stuttgart
zur Erlangung der Würde eines Doktor-Ingenieurs (Dr. Ing.) genehmigte Abhandlung
von
Charles Teye Amoatey
aus Tema, Ghana
Hauptberichter: Prof. Dr. rer.nat. Reinhart Kühne
Mitberichter: Prof. Dr. Kay Mitusch
Tag der Mündlichen Prüfung: April 25, 2007
Institut für Straßen- und Verkehrswesen
Lehrstuhl für Verkehrsplanung und Verkehrsleittech
Universität Stuttgart
2007
ii
This dissertation is the product of informal collaboration between the Institute for
Transportation Science of the University of Stuttgart, the German Technical
Cooperation (GTZ) in Eschborn and the KfW Development Bank in Frankfurt,
Germany.
iii
Dedication
This work is dedicated to my beloved wife Peace and our dear son Charles.
iv
ACKNOWLEDGEMENTS
I am extremely grateful to the Friedrich-Ebert Stiftung (FES) for sponsoring my masters
and doctoral education at University of Stuttgart, which has enabled me to realise this
important dreams. I am especially indebted to Ms. Nina Schneider, Maria Holona and
Barbara Nauroth all staff of FES for their advice and support during the scholarship
period.
I wish to thank Prof. Dr. Udo Gaspary for his mentorship and whose lecture at the
Center for Infrastructure Planning of the University of Stuttgart inspired me to
specialise and develop a career in project financing. I have learnt a great deal from him.
I also appreciate the support of the German Technical Cooperation (GTZ) for funding
my participation in international conferences in South Africa and Tanzania where I had
the opportunity of presenting sections of my work. I thank Dr. Frank Weiler of the KfW
for his professional advice in the design of the cost-revenue model presented in this
dissertation.
Finally, I wish to express my profound appreciation to Mr. Boama Djan of the Ghana
Highway Authority for providing me with the needed data on road transport in Ghana.
v
TABLE OF CONTENTS
LIST OF TABLES.........................................................................................................viii
LIST OF FIGURES.........................................................................................................ix
LIST OF ACRONYMS.................................................................................................... x
LIST OF ACRONYMS.................................................................................................... x
ABSTRACT ...........................................................................................................xi
ZUSAMMENFASSUNG ...............................................................................................xii
1 INTRODUCTION..................................................................................................... 1
1.1 Financing the road sector...................................................................................1
1.1.1 The impacts of under-funding of road investment......................................3
1.1.2 Importance of timely road maintenance .....................................................4
1.2 The need for a sustainable road sector financing scheme in Ghana ..................6
1.2.1 Correlation between road network condition and poverty levels...............6
1.2.2 Improved road transport infrastructure as catalyst for
socio-economic development in Ghana......................................................8
2 ROAD COSTS AND REVENUE MODEL............................................................ 10
2.1 Road network classification.............................................................................10
2.2 Identifying and estimating road costs ..............................................................11
2.2.1 Routine maintenance cost.........................................................................11
2.2.2 Periodic maintenance cost ........................................................................ 12
2.2.3 Asset replacement cost..............................................................................12
2.2.4 Administrative cost................................................................................... 13
2.2.5 Cost of capital...........................................................................................13
2.2.6 Summary: road cost items and unit cost information...............................14
2.2.7 Total road costs.........................................................................................15
2.3 User contributions and domestic funds............................................................ 21
2.3.1 Fuel levies................................................................................................. 23
2.3.2 Vehicle registration fees ...........................................................................27
2.3.3 Vehicle inspection fees.............................................................................28
2.3.4 Tolls and international transit fees............................................................29
2.3.5 Total domestic funds and user contribution..............................................30
vi
2.3.6 Total road costs and available domestic funds .........................................30
3 ROAD FINANCING PERFORMANCE INDICATORS....................................... 32
3.1 Objectives......................................................................................................... 32
3.2 Key performance indicators.............................................................................33
3.2.1 Definition.................................................................................................. 33
3.2.2 Results....................................................................................................... 35
3.3 Secondary performance indicators...................................................................36
3.3.1 Definition.................................................................................................. 36
3.3.2 Results....................................................................................................... 39
3.4 Trend analysis: required funds, available funds and reliance on donor funds.41
4 STATE OF HIGHWAY TOLLING IN GHANA................................................... 45
4.1 Existing legislative framework ........................................................................ 45
4.2 Toll road network.............................................................................................46
4.3 Private sector participation............................................................................... 48
4.4 Toll collection contracting ...............................................................................49
4.5 Toll management and operation....................................................................... 50
4.5.1 Tolling Method.........................................................................................50
4.5.2 Ticketing...................................................................................................50
4.5.3 Safety and security.................................................................................... 51
4.5.4 Toll rates...................................................................................................51
5 PUBLIC PERCEPTION SURVEY ON HIGHWAY TOLLING IN GHANA...... 52
5.1 Survey background...........................................................................................52
5.2 Survey description............................................................................................ 53
5.3 Survey results................................................................................................... 54
5.4 Conclusions from survey results......................................................................58
6 INTERNATIONAL EXPERIENCE: ROAD CONCESSION IN SOUTH AFRICA59
6.1 Background......................................................................................................59
6.1.1 Institutional framework and road network................................................59
6.1.2 Financing national roads...........................................................................60
6.1.3 Why South Africa opted for road tolling.................................................. 61
6.2 Available toll road financing mechanisms.......................................................64
vii
6.2.1 State financing ..........................................................................................64
6.2.2 Partial concessioning ................................................................................66
6.2.3 Full concessioning ....................................................................................66
6.3 Unsolicited bidding process.............................................................................68
6.4 Evaluation of toll road projects........................................................................ 70
6.5 The N3TC toll project......................................................................................71
6.5.1 The concession.......................................................................................... 71
6.5.2 Financing N3TC and current financial performance................................72
6.5.3 Traffic growth and revenue.......................................................................75
6.6 Perceived shortcomings in existing road concessioning schemes ...................75
6.6.1 Unsolicited bidding process...................................................................... 76
6.6.2 Toll setting format .................................................................................... 76
6.6.3 Open system.............................................................................................. 77
6.7 Lessons.............................................................................................................77
7 PREPARING A ROAD CONCESSION SCHEME FOR GHANA....................... 78
7.1 Possible organisational options........................................................................ 78
7.2 Potential concession projects ...........................................................................81
7.3 Road concession performance measurement criteria.......................................82
7.4 Sector and cross-sector policies in favour of highway concession in Ghana ..86
7.5 Reaching the urban poor with private road transport infrastructure................86
8 CONCLUSION AND RECOMMENDATIONS.................................................... 88
REFERENCES .......................................................................................................... 90
APPENDIX A: PERSONS CONTACTED ................................................................94
APPENDIX B: ROAD NETWORK LIFE CYCLE COSTS...................................... 95
APPENDIX C: ROAD FUND REVENUES AND USER CONTRIBUTION..........96
APPENDIX D: QUESTIONNAIRES FOR TOLL ROAD USERS........................... 98
APPENDIX E: RAW SURVEY DATA................................................................... 101
APPENDIX F: SUMMARY OF SURVEY DATA ................................................. 105
viii
LIST OF TABLES
Table 1 Impact of poor road condition on poverty...........................................................7
Table 2 Unit costs and life of key road works in Ghana.................................................15
Table 3 Annual network life-cycle costs (base scenario)...............................................17
Table 4 Cost of clearing existing backlog ......................................................................19
Table 5 Annual life-cycle costs (extended scenario)...................................................... 20
Table 6 Vehicle classification and population in Ghana ................................................23
Table 7 Description of fuel taxes and margins (September 2006) .................................26
Table 8 User contribution and road fund revenues from fuel taxes................................27
Table 9 Registered vehicles and current user charges....................................................28
Table 10 Inspected vehicles and user charges in 2005...................................................28
Table 11 Annual toll road trips and international transits with user charges .................29
Table 12 User contributions and total domestic funds for Ghana ..................................30
Table 13 Comparison between total road costs and available domestic funds............... 31
Table 14 Key performance indicators............................................................................. 34
Table 15 Key performance indicators for Ghana............................................................35
Table 16 Secondary Performance Indicators.................................................................. 37
Table 17 Secondary performance indicators for Ghana .................................................39
Table 18 Road maintenance spending in relation to GDP.............................................. 40
Table 19 Comparison of required, approved and released funding (1996-2003)........... 41
Table 20 Financial analysis of the RSDP as of June 2004 .............................................43
Table 21 Existing toll roads and the locations................................................................46
Table 22 Existing toll bridges and their locations ..........................................................47
Table 23 Toll road network size in selected countries....................................................48
Table 24 Existing toll collection companies and contracted annual remittances...........50
Table 25 Comparison between concession and conventional schemes..........................63
Table 26 Existing and planned concession toll roads in South Africa, 2004-2008........ 68
Table 27 Proposed concession projects from unsolicited bids.......................................70
Table 28 Current and target ratios for coverage ratios ...................................................74
ix
Table 29 Possible organisation options ..........................................................................80
Table 30 Traffic survey on selected existing toll roads/bridges.....................................81
Table 31 Selected roads for various tolling schemes...................................................... 82
Table 32 Performance indicators for toll roads ..............................................................83
Table 33 Detail calculation of annual road network life cycle costs.............................. 95
Table 34 Annual road fund revenue for Ghana ..............................................................96
Table 35 Annual total road user contributions for Ghana ..............................................97
LIST OF FIGURES
Figure 1 General framework of the thesis ........................................................................3
Figure 2 Cost of delayed maintenance.............................................................................. 5
Figure 3 Expenditures and asset value for rural roads in Battambang, Cambodia...........6
Figure 4 Correlation of poverty level and road condition ................................................7
Figure 4 Road cost items and input variables................................................................. 14
Figure 6 Input parameters for estimating domestic funds ..............................................21
Figure 7 User contribution and domestic funds..............................................................22
Figure 8 Trends in fuel prices in Ghana .........................................................................24
Figure 9 Road sector financing trends in Ghana (1996-2003)........................................42
Figure 10 South Africa toll and non-toll road network size...........................................59
Figure 11 Primary road network and responsible agencies............................................60
Figure 12 State and concession road network ................................................................64
Figure 13 Sources of funding for state toll roads............................................................65
Figure 14 Special purpose vehicles ................................................................................67
Figure 15 Map of N3 toll route.......................................................................................72
x
LIST OF ACRONYMS
BOST Bulk Oil Storage and Transportation
BOT Build, Operate and Transfer
CEPA Centre for Policy Ghana, Accra, Ghana
CIF Costs, Insurance, Freight
CPI Consumer Price Index
DFR Department of Feeder Roads, Accra-Ghana
DOT Department of Transport, South Africa
GHA Ghana Highway Authority, Accra, Ghana
GIPC Ghana Investment Promotion Council, Accra, Ghana
GIPC Ghana Investment Promotion Council, Accra, Ghana
GTZ Deutsche Gesellschaft für Technische Zusammenarbeit GmbH,
Eschborn, Germany
ILO International Labour Organisation, Geneva, Switzerland
IMF International Monetary Fund, Washington, USA
KfW Kreditanstalt für Wiederaufbau, Frankfurt, Germany
LSR Loans Supportable by Revenue
MOT Maintain, Operate and Transfer
MRT Ministry of Roads and Transport, Accra, Ghana
N3TC N3 Toll Concession, Pretoria, South Africa
NPA National Petroleum Authority, Accra, Ghana
NRA South African National Road Agency, Pretoria, South Africa
OMCs Oil Marketing Companies
ROCKS Road Costs Knowledge System
ROT Rehabilitate, Operate and Transfer
SIC State Insurance Company, Accra, Ghana
SPV Special Purpose Vehicle
SSA Sub-Sahara Africa
TOR Tema Oil Refinery, Tema, Ghana
UPPF Unified Petroleum Price Fund
xi
ABSTRACT
Financing road network life-cycle costs on sustainable basis is one of the most crucial
challenges facing many developing countries, as it requires a thorough awareness of
road network costs and available sector funds. This thesis has developed a pragmatic
cost-revenue model for estimating road network life-cycle costs and expected road
revenues. The model calculates performance indicators for measuring the extent to
which road users are contributing to the financing of network costs. The findings
indicate that road user contributions in Ghana are sufficient to cover only the expected
maintenance costs and three-quarters of estimated network life cycle costs. User
contribution covers only one-half of the total costs when the costs of clearing existing
maintenance backlogs are included. By comparing user contributions and actual
allocated domestic funds, the cost-revenue model shows that nearly half of what users
contribute is actually allocated to the road sector. This disparity between road network
life cycle costs and available funds for road financing is a major development
constraint, as needed road improvement projects cannot be undertaken due to lack of
funds or under-allocation of available funds. This also implies that government must
consider other sources of funds for the road sector. By drawing on the South Africa’s
highway tolling experiences, this thesis has considered road concessioning as a possible
financing mechanism for bridging existing road sector financing gap in Ghana. Traffic
levels on most highways in Ghana are generally low, though some roads have high
enough traffic volume for a possible concession scheme. As also pertain in South
Africa, road concessioning in Ghana should be done on project-by-project basis starting
with those with high enough traffic. A public perception survey, conducted as part of
this thesis has showed that awareness and support for highway tolling in Ghana is high.
There is consensus among users that existing tolls are low and users are more likely to
support future toll increases with a corresponding improvement in service delivery.
Evaluation of selected highways in the country has identified some road projects for
possible Build-Operate-Transfer (BOT), Rehabilitate-Operate-Transfer (ROT) and
Maintain-Operate-Transfer (MOT) concession schemes.
Keywords: user contributions, domestic funds and road life-cycle costs, performance
indicators, road concessioning
xii
ZUSAMMENFASSUNG
Die nachhaltige Finanzierung des Straßennetzes über die gesamte Lebenszyklusdauer ist
eine der größten Herausforderungen für zahlreiche Entwicklungsländer. Hierfür ist eine
genaue Kenntnis des Kosten der Straßennetzes und der zur Verfügung stehenden
Geldmittel erforderlich. Im Rahmen dieser Arbeit wurde ein pragmatisches Kosten-
Nutzen Modell zur Bestimmung der Lebenszykluskosten des Straßennetzes entwickelt,
auf der Grundlage der für den Verkehrssektor ausgewiesenen Geldmittel. Das Modell
berechnet die Leistungsindikatoren, aufgrund derer bestimmt werden kann, in welchem
Ausmaß die Verkehrsteilnehmer zur Finanzierung des Straßennetzwerks beitragen. Die
Ergebnisse zeigen, dass die Beiträge der Verkehrsteilnehmer in Ghana nur ausreichen
um die zu erwartenden Wartungsarbeiten auszuführen, d. h. sie decken bloß ¾ der
Lebenszykluskosten des entsprechenden Straßennetzes ab. Die Beiträge decken sogar
bloß die Hälfte der Kosten ab, wenn es darum geht, auch noch den Arbeitsrückstand bei
der Wartung des Straßennetzes aufzuholen. Durch den Vergleich der Beiträge der
Verkehrsteilnehmer mit den tatsächlich zugewiesenen Mitteln aus dem öffentlichen
Haushalt, zeigt das Kosten-Nutzen-Modell auf, dass nur die Hälfte der
Straßennutzungsgebühren dem Verkehrssektor zugeschlagen werden. Diese Diskrepanz
zwischen den Lebenszykluskosten des Straßennetzes und den tatsächlich hierfür
vorhandenen Geldmitteln wirkt als Hemmschuh für die Entwicklung des Straßennetzes.
Insbesondere können die erforderlichen Straßenverbesserungsprojekte nicht in Angriff
genommen werden können, weil die hierfür benötigten Mittel nicht zur Verfügung
stehen oder infolge der Haushaltslage die zugewiesenen Summen zu gering sind. Somit
wird deutlich, dass die Regierung sich nach zusätzlichen Finanzierungsquellen für den
Verkehrssektor umsehen muss. Auf der Grundlage der Erfahrungen aus Südafrika mit
einer Straßenmaut hat diese Arbeit das Konzept einer Straßenkonzession als möglichen
Finanzierungsmechanismus zum Ausgleich des Finanzbedarfs im Straßensektor unter
die Lupe genommen. Auf den meisten Hauptverkehrstraßen in Ghana herrscht eine eher
geringe Verkehrsdichte, was gegen eine generelle Mautfinanzierung spricht. Die
Verkehrsdichte auf einigen Straßen lässt eine Konzession plausibel erscheinen. Wie
auch in Südafrika sollte die Einführung einer Straßenkonzession projektbezogen in
Angriff genommen werden, beginnend mit jenen Straßen, die aufgrund ihrer
Verkehrsdichte hierfür besonders geeignet sind.
Im Rahmen dieser Arbeit wurde auch eine Befragung über die öffentlichen
Wahrnehmung des Straßenbaus und –unterhalts durchgeführt. Die Befragung hat
gezeigt, dass das Bewusstsein für die Notwendigkeit von Mautgebühren und somit auch
die Unterstützung einer Finanzierung der Straßeninfrastruktur über diesen Weg hoch
sind. Die Verkehrsteilnehmer sind der Ansicht, dass die Mautkosten niedrig sind und sie
würden eine Erhöhung dieser Kosten gerne in Kauf nehmen, wenn diese mit einer
xiii
Verbesserung der Servicequalität der Straßen einhergehen. Durch die Untersuchung
ausgewählter Hauptverkehrsstraßen in Ghana wurden eine Reihe von Straßenprojekten
für folgende in öffentlich-privater Partnerschaft Finanzierungsmöglichkeiten
ausgewiesen. Im Einzelnen wurden die Ansätze Build-Operate-Transfer (BOT),
Rehabilitate-Operate-Transfer (ROT) und Maintain-Operate-Transfer (MOT) untersucht
und anhand einer Indikatorenliste bewertet.
Schlüsselbegriffe: Straßennutzungsgebühren, Haushaltsmittel, Lebenszykluskosten des
Straßennetzwerks, Leistungsindikatoren, Straßenkonzession.
1
1 INTRODUCTION
1.1 Financing the road sector
Road transport continues to play an indispensable role in the movement of passengers
and freight. This is a necessary requirement for poverty alleviation and socio-economic
development in developing countries. Roads serve as the circulation system in the
promotion of commerce, communication, and socio-economic development. The
provision of road infrastructure gives both the rural and urban poor access to health,
education, employment and other needed social services. This means that without
efficient transport infrastructure in place, economic and social development would be
severely hindered.
Despite the importance of roads in overall economic development, efficiency of road
transport systems in many developing countries are often constrained by high vehicle
operation and maintenance costs due to poor road conditions. Whiles demands for
transport infrastructure continue to grow - a result of high population growth rates,
urbanisation and growth in economic activities - resources for road maintenance and
road network replacement continue to be a burden for many developing countries.
Domestic funds, which predominant come from road user charges and other general
budget allocations, are often not sufficient to cover estimated life cycle cost of the road
network. The sector therefore relies heavily on donor support. For example, in Ghana,
between 1996 and 2003 donor funds constituted roughly 40% of total road sector
budgets (MRT, 2004). The question here is not about the necessity of donor supports
but rather the extent to which such levels of reliance on foreign assistance is sustainable.
Even though donor support might seem indispensable, it is safe - from funding
sustainability perspective - to focus only on available domestic funds when assessing
developing countries’ efforts at preserving their road assets.
Again, sustainable road financing requires an awareness of both the expected network
life cycle costs on the one hand and available domestic funds on the other hand. The
sustainability of any road-financing plan is therefore measured by the extent to which
these domestic funds cover the expected life-cycle costs of the road network.
How do we measure the balance between road costs and available domestic funds? This
thesis has developed a pragmatic cost-revenue model for identifying and estimating, in a
systematic, transparent and a logical manner, all road costs, user contributions and
available domestic funds. Firstly, unit cost values for road construction and maintenance
are estimated. Secondly, user contributions are estimated from road user charges.
Thirdly, all funds from domestic sources - that is - funds actually allocated to the road
2
sector, are estimated. Finally, using these costs and revenue figures, sets of performance
indicators for measuring the extent to which road users contribute to road sector
financing are developed.
To help raise additional funds and bridge existing gap between road costs and available
domestic funds, road tolling on concession basis is proposed and the possibilities
explored. First, the state of the existing tolling system in Ghana is reviewed and
shortcomings are identified. Secondly, results of a public perception survey to assess the
level of public support for a road concessioning scheme in Ghana is presented and
discussed. Thirdly, the performance of road concessioning in South Africa – another
African country with over 20 years experience in the implementation of road
concessioning schemes – is reviewed. Finally, some guidelines for implementation of
highway tolling in Ghana are discussed.
The general framework for this thesis is illustrated by Figure 1.
3
Figure 1 General framework of the thesis
1.1.1 The impacts of under-funding of road investment
Inadequate financial allocation to the road sector is a primary cause of road
deterioration in developing countries, as necessary maintenance works are deferred. For
example, in Ghana backlog of maintenance works is believed to have left nearly half of
the entire national road network in poor condition (MRT, 2003, p.64) – a situation that
makes future maintenance works even more expensive. This is similar to what pertains
in many Sub-Sahara African countries, where on average about one-fourth of the entire
network are in poor condition and require urgent interventions to prevent the networks
from complete collapse.
The problem of inadequate road financing is in two folds. First, countries with oversize
network often do not have sufficient financial resources for maintaining them. The
second problem is the generally low priority for road maintenance by many
governments in developing countries. Road maintenance is financed from the general
budget and hence competes with other sectors for often very limited funds.
The negative impacts of inadequate road maintenance are obvious. Allowing roads to
deteriorate, say within less than half their life span, only to spend additional scarce
resources to rebuild them is economically unjustifiable. Poor road network condition
4
also translates into poor and often expensive transport services (GIPC, n.d.). This is a
serious development constraint, especially in countries, where transport cost is a major
determinant of prices of basic goods and services (FEWS, 2004).
Sustainable road network financing requires a comprehensive understanding of road life
cycle costs and available road sector funds. Often the road administration is limited in
its ability to determine these network funding needs due, in part, to constraints in
obtaining road network information and tools for calculating costs and revenue figures.
1.1.2 Importance of timely road maintenance
Roads are valuable national assets, which must be preserved. According to Heggie
(2004. p.4), developed countries spend about 1.2 to 2.5% of their GDP on roads. The
need for sustained road maintenance is of primary importance, especially with respect to
road safety and economic development. The timing of the execution of maintenance
activities is particularly important, as it can impact significantly on the overall network
life-cycle costs. A European Commission (2006) review of the transport sector showed
that deferred maintenance had resulted in the loss of one third of the road infrastructure
investments in Sub-Sahara Africa. Another recent research findings by the South
African National Road Agency (NRA, 2005) on the importance of timely execution of
maintenance works also confirms that delays in road project implementation have
contributed to a disproportionately high road construction and maintenance costs.
South Africa
To illustrate the importance of timely execution of maintenance works, this section
discusses the basis of the South Africa’s asset preservation policy, in which number one
priority is given to timely road maintenance. This policy review was obtained from
NRA (2005).
Let us suppose that current required road maintenance would cost 1 unit of currency per
km to perform. If these maintenance works are not undertaken, simply because there
may not be any visible sign of asset deterioration, it may seem the road agency has
made “savings” by deferring maintenance works. As illustrated by Figure 2, if the road
is allowed to deteriorate for say another three years, it will now cost 6 units of currency
per km at this stage to maintain the same road. This implies that, for every 1km of poor
road, which ought to be maintained now, 6km of good roads cannot be maintained.
Again, suppose the road maintenance is deferred for a further five years, not only will
vehicle operating costs increase disproportionately, but also 18 units of currency per km
will now be required to maintain the same roads. Extending the analogy again implies
that for every 1km of poor roads, which ought to be maintained now - that is five years
after the time it was actually needed - 18km of good roads cannot be maintained.
5
Figure 2 Cost of delayed maintenance
Source: NRA (2005). Declaration of Intent 2005-2008. South African National Roads Agency,
Pretoria, South Africa.
The South African case shows that deferring road maintenance, because of lack of
funds, will lead to a more costly long-term road costs compared to when maintenance
works are performed when they are required.
Cambodia
Another negative impact of delayed road maintenance is illustrated by an International
Labour Organisation (ILO) supported rural road project in Battambang Province in
Cambodia. In 1998, ILO assisted the Battambang Province to improve about 170km of
its tertiary rural roads, which was handed over to the local authority at the end of that
year. This network size had an estimated asset value of US$2.5 million. A road
condition survey performed in 2000-2001 showed that only 112km of this network was
in a maintainable condition and the value of the asset had declined to below US$1.7
million (ILO, 2001, p.3).
To paint a better picture of the impact of delayed maintenance, this ILO project has
shown that within a period of only three years, 58km of road length or asset value of
about US$800 000 was lost. This amount is equivalent to a lost in asset value of US$4
600 per kilometre per year and also implies that at least US$4 600 will be required each
year to restore each kilometre of the network to the original condition. This current
maintenance budget is about three-folds the amount required should maintenance have
been performed when it was actually needed. As further highlighted in the figure below,
this decline in the asset value of the network is attributable to neglect of both routine
and periodic maintenance.
6
Figure 3 Expenditures and asset value for rural roads in Battambang, Cambodia
Again, according to Heggie (1998), “when a road is allowed to deteriorate from good to
poor condition, each dollar saved on road maintenance increases [vehicle operation
costs] by between $2 and $3. Far from saving money, cutting back on road maintenance
increases the cost of road transport and raises the net cost to the economy as a whole.”
1.2 The need for a sustainable road sector financing scheme in Ghana
1.2.1 Correlation between road network condition and poverty levels
To what extent does inadequate transport infrastructure in Ghana constitute decisive
obstacles to poverty reduction and socio-economic development of Ghana?
This section establishes a possible correlation between road condition and the incidence
of poverty. First it is important to mention that in Ghana, extreme poverty is a rural
problem. This can be seen from the significant disparities in poverty levels across the
various regions of Ghana and also among the various socio-economic groups. A key
feature of poverty in Ghana includes a lack of income-generating opportunities outside
of agriculture especially for rural dwellers, and inadequate access to economic and
social services. In many cases, the character and extent of these problems are largely a
function of the inadequate provision of travel and transport infrastructure and services,
especially at the village and community levels (World Bank, n.d and Porter, 1999).
According to the Ghana Living Standards Survey (GLSS 2000), with adequate
provision made for other sectors, demand for transport is the main linkage that has the
greatest impact on the poor. Transport services play a direct role in the lives of the poor,
7
by enabling access to markets, jobs and health and educational centres (MRT, 2002).
Investment in roads and transport services will provide access to markets creating
economic opportunity for the poor. The Roads and Transport Ministry’s goal of
improving transport systems is based on the economic rationale that an efficient
transport system will significantly reduce transaction costs, promote economy of scale
and specialisation, lower domestic production cost and hence lead to an overall poverty
reduction. The table and chart below indicate a link between poor road conditions and
levels of poverty in Ghana.
Table 1 Impact of poor road condition on poverty
Region Area
(sq.km)
% living below
poverty line
(1999)
Length in poor
condition (km) % of roads in
poor condition
Upper East 8 842 88.2 1 620 65.0
Upper West 18 376 83.9 1 663 59.4
Northern 70 386 69.2 4 235 64.1
Brong Ahafo 39 557 35.8 2 942 39.0
Ashanti 24 389 27.7 3 350 40.9
Volta 20 570 37.7 1 488 34.5
Eastern 19 323 43.7 2 140 47.3
Greater Accra 3 245 5.2 1 005 33.0
Central 9 826 48.4 1 375 35.8
Western 23 921 27.3 2 645 45.0
Source: Ministry of Roads and Transport (MRT, 2002)
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
Greater
Accra Western Volta Brong
Ahafo Ashanti Eastern Central Northern Upper
West Upper
East
Regions of Ghana
% living below poverty line (1999) % of roads in poor condition
Figure 4 Correlation of poverty level and road condition
8
Considering the existing road condition of the country’s transport network region by
region indicates a strong direct link between road condition and poverty levels across
region. In general, regions with higher proportion of network in poor condition also
have a corresponding higher incidence of poverty. It is expected therefore that an
increase road investment in regions with poor road condition could contribute to a
reduction in poverty in those areas.
1.2.2 Improved road transport infrastructure as catalyst for socio-
economic development in Ghana
In reviewing the impact of road provision and poverty reduction, Howe (1984, p.80)
observed, “the continuing optimism with which most road investment programmes are
still regarded in relation to their effect on poverty reduction cannot be sustained”. Road
infrastructure must be complimented by supply of adequate transport services. Howe
admits that though road infrastructure and transport services alone are not panacea to
poverty eradication, they should be seen as catalysts to creating wealth and giving
opportunities for people to access various economic resources (MRT, 2003).
Hine (1993) and Scott (2000) also observe that “one of the links made between
improvements in rural transport infrastructure and increasing the economic
opportunities of the poor is through income increases stemming from improvements in
the commodity terms of trade for rural producers.” They further argued that, “better
transport is hypothesised to increase farm gate prices received for farm products and to
lower the price of inputs and purchased consumption goods.” This therefore means that
the role of transport in its entirety in realising the objectives of the various sectors of the
economy (with respect to poverty alleviation) cannot be overemphasised.
Ghana Government objective of investing into road infrastructure and transport services
– for the achievement of its Millennium Development Goals (MDGs) is based on the
following perceived growth in socio-economic development opportunity. The following
benefits have been identified:
Health service delivery
With respect to health service delivery, improved road transport will enhance access to
health centres, timely delivery of drugs and logistics for health personnel and also
encourage health personnel (doctors and paramedic staff) to accept postings to
previously inaccessible areas.
9
Education
It has been observed that student performance in schools with good access to transport
facilities were better than schools with poor access to means of transport. This is
because schools located in less accessible areas are less able to attract qualified teachers.
Teachers’ decision to accept posting to rural areas is partly based on the availability and
quality of transport infrastructure and services in those areas. It is also a fact that
logistics distribution, such as textbooks and teaching aids, is a problem in the poorly
accessible schools.
Food production and distribution
Transportation costs contribute up to about 70% of food prices in urban centres.
Farmers have greater incentive to produce more if they will be able to efficiently
transport them from the farm gates to the markets. This will also lead to a decrease in
food prices in urban centres. Prices of agricultural inputs are high. This is coupled with
lack of availability of Farm Extension Services in the areas with poor transport
infrastructure and services. Location analysis also shows that areas with good transport
infrastructure and services relative to the location of Agro-based Industries tend to be
more favourable than those with poor accessibility (MRT, 2003).
Social cohesion – good governance
Efficient transport systems have the potential of promoting social cohesion and stability
and help reduce the current high level of rural-urban migration. Improved transport
system will also enhance good governance, as policymakers and community leaders
will be able to directly reach the populace. It will help facilitate the implementation of
ongoing decentralisation process, which enhances good governance by ensuring that
local governments are able to quickly identify and meet the needs of their people.
10
2 ROAD COSTS AND REVENUE MODEL
This section presents a model for estimating road network cost and sector funds. The
cost-revenue model is designed to assist road administrators and policymakers to
estimate, in a simplified, transparent and logical manner all road life cycle costs,
revenues from user charges and actual domestic funds allocated for road financing. The
results of the model are used later used to calculate performance indicators.
The objectives of the cost-revenue models are basically to provide answers to the
following questions:
• are sufficient funds allocated to cover expected road network life-cycle costs
(i.e. maintenance and reconstruction costs) and
• to what extent do road users contribute to the financing of these life-cycle costs?
By estimating both the funding needs of the entire road network of the country and also
revenues from user charges, the model assesses the extent to which these domestic
funds and revenues from user charges cover the expected life cycle costs of the road
network.
2.1 Road network classification
As a first step to estimating funding needs, the national road network has to be
classified. This is important since different unit costs can be associated with different
road types. In many countries each road class is often administered by a separate road
agency. Classifying the network, according to the different road agencies, is also
essential for budget allocation purposes. Since unit cost also depends on the road
surface type, it is recommended to sub-classify the network under the different road
agencies by surface types.
The road classes in Ghana are described below:
Trunk (or national) roads: These roads link regional (and district) capitals and form the
main frame of the national road network. Trunk roads are of national strategic and
economic importance. The Ghana Highways Authority administers trunk roads in
Ghana
Urban roads: These consist of roads within major town and cities. The Department of
Urban roads has the responsibility for the entire network within five cities (Accra,
Kumasi, Secondi-Takoradi, Tema and Tamale) and the urban areas of the Ga District
Feeder (rural) roads: These roads are classified as inter-district, connectors or access
roads. Inter-district roads cross more than one district. Connectors are feeder roads that
11
link a trunk road to either another trunk road or feeder road. Finally, an access feeder
road provides a link between a trunk road and a (farming) community. The surface type
can be earth, gravel or bituminous surface treatment. Most feeder roads in Ghana have
earth surfacing. Feeder roads are under the control of the Department of Feeder Roads.
The surface types of in Ghana roads are Portland cement concrete, asphalt concrete,
bituminous surface treatment, gravel and earth. Each road and surface type has an
associated unit cost of construction and maintenance.
2.2 Identifying and estimating road costs
This section identifies all road activities and estimates the financial requirements for the
road sector. Typical road cost activities are routine maintenance, periodic maintenance
and reconstruction or asset replacement. The classification is usually based on the
required frequency for the road improvement activity and the costs involved. There are
additional cost items relating to road administration overheads and cost of capital. With
these cost information, annual life cycle costs of the road network can be estimated.
Estimation of unit cost figures for road construction and maintenance depends very
much on how road projects are contracted. Where contracts are awarded on fixed price
basis, the unit cost could be taken as the average per km cost of current road projects.
The unit cost is simply the fee contractors accept in order to perform particular road
activities. In this model, unit costs figures used were obtained from unconstrained road
budgets between year 2003 and 2005.
The time interval for each road activity is also estimated.
2.2.1 Routine maintenance cost
Routine maintenance are maintenance measures aimed at enhancing the functional
integrity of the road by ensuring a conducive road environment and riding surface. It is
required, for example, to keep “good” roads in “good” condition. Routine maintenance
can be classified into two categories, namely; pavement and non-pavement related.
Pavement related maintenance activities are required at intervals during the year with a
frequency depending on the condition of the pavement and traffic volume or traffic
composition. One example is pothole patching.
Non-pavement related routine maintenance on the other hand is required on all roads
(paved or unpaved) during the year irrespective of traffic or pavement conditions.
Activities include “bush clearing, drain clearing, ditch cleaning, culvert cleaning, road
sign cleaning, repairs of minor damage to side slopes, levelling of shoulders and verges”
(ILO, n.d., p.2). Routine maintenance interval used in this model is one year.
12
The unit cost of routine maintenance (measured in US$/km) is the unit contract price for
routine maintenance in the case of fixed contract projects. For each road class (and
surface type), the unit cost can also be estimated by simply dividing the contract sum
for routine maintenance project by the total length of road involved. The average unit
cost of several routine maintenance projects can then be estimated.
2.2.2 Periodic maintenance cost
This maintenance type is required at intervals of several years. The interval depends on
the type of activity and the road surface type. The aim of periodic maintenance is to
preserve the structural integrity of the road. Periodic maintenance is needed, for
example, to bring “fair” roads to “good” condition. Some periodic maintenance
activities include resealing, regravelling, pavement overlay, spot improvement, asphalt
concrete resurfacing (or partial reconstruction), walkway repairs, reconstruction of
drainage structures (including culverts and bridges), roadway markings, installation of
traffic signals and speed rumps (MRT, 2005, p.9). Periodic maintenance interval can
range from three years for regravelling to 12 years for asphalt overlay.
The unit cost of periodic maintenance is estimated by dividing the contract sum of
periodic maintenance project by the road length in kilometres. The average unit cost is
then determined from all periodic maintenance projects undertaken within a given
period. Unit cost of periodic maintenance is estimated for each road class, and for each
road class a distinction is made between unit cost figures for different road surface
types. The annual unit cost is then calculated by dividing the periodic maintenance unit
cost by the average periodic maintenance time interval. Maintenance interval is the
number of years after which that maintenance activity has to be repeated.
For example, asphalt concrete roads often have design life of 30 years, but an overlay -
a periodic maintenance measure- may be required every 12 years. Periodic maintenance
for bituminous surface treated roads is either a resealing or resurfacing depending on the
road surface condition at the time and available funds. For the purpose of this model, all
bituminous surface treated roads are assumed to require resealing after nine years. For
gravel roads, the number of years required for periodic maintenance (regravelling) is
often a function of the prevailing traffic volume on the road. The average time interval
for regravelling used is four years.
2.2.3 Asset replacement cost
Road infrastructure is designed to have a specific life span. At the end of this design
life, the bearing capacities of the road sub-layers reduce to the point where they are
13
unable to carry the expected traffic loads. At such a point it will not be economically
worthwhile to continue with just maintenance works. The entire infrastructure (both
sub- and super-structure) has to be replaced. Road asset replacement involves the
reconstruction of the whole pavement structure including provision of new subbase,
gravel base and a surfacing. Since road asset replacement involves a complete
reconstruction, such a reconstruction cost could be as high as the cost of a new
construction.
The construction cost of a road is therefore assumed to be equivalent to the asset
replacement cost. The unit cost of construction/reconstruction (measured in $/km) is the
average per km cost of a newly constructed or reconstructed road. The unit construction
cost should be estimated for each road class and surface type.
2.2.4 Administrative cost
Administrative costs include all other costs not directly related to specific road projects
but which are required for the efficient functioning of the institutions and agencies
responsible for road management and planning in the country. Typical administrative
costs include traffic management and road safety, environment and social management,
consultancy and technical support, training and institutional support.
The administrative cost is taken as the proportion of total costs required to cover road
agency overheads. It is expressed as a percentage of the total road budget. This
benchmark is derived from past road administration overheads.
2.2.5 Cost of capital
The cost of capital is the sum of the cost-of-equity and the cost-of-debt. If a government
has to finance construction or maintenance works using borrowed money, without any
equity contribution, then the cost of capital is the cost-of-debt. The cost of debt, which
is simply the expected interest payments, depends on the source of funds. It can range
from 0% (in the case of interest free-loans from some development banks) to say 15%
(for many commercial banks). A sensitivity analysis may be performed on total road
costs, and hence performance indicators, using different costs-of-debt.
The choice of appropriate interest rate to use in the model is based on the following
interpretations:
1. That government expects some minimum returns on investment when building
transport infrastructure (otherwise it invests the money elsewhere)
14
2. In order to improve transport infrastructure the government takes a loan that has
to be serviced
3. The transport sector is perceived as a business that must generate returns on
investment
2.2.6 Summary: road cost items and unit cost information
This section presents a summary of the methodological framework for estimation of
unit costs figures and other inputs to the model already discussed above (see Figure 5
and Table 2).
Figure 5 Road cost items and input variables
15
Table 2 Unit costs and life of key road works in Ghana
Road class/
surface type Routine
maint. costs Periodic maint.
costs Construction
cost Sources
Unit costs Unit costs Intervals Unit Intervals
US$/km/year US$/km years US$/km years
Trunk roads
Asphalt 1 150 110 000 10 500 000 30 GHA, 2005
Bituminous 1 040 61 000 9 300 000 30 GHA, 2005
Gravel 1 020 22 000 4 200 000 20 GHA, 2005
Urban roads
Asphalt 1 900 83 550 10 404 400 30 MRT, 2004
Bituminous 1 900 51 000 9 227 300 30 MRT 2005
Gravel 1 700 14 450 4 133 000 20 MRT, 2004
Feeder roads
Bituminous 470 45 250 9 141 300 30 DFR 2004
Gravel 470 6 300 4 30 000 20 MRT,
Earth 300 1 250 2 12 300 15 DFR 2004
Source Own estimation and compilation from the above sources
The total annual life cycle cost is calculated by aggregating the routine maintenance,
periodic maintenance and asset replacement costs.
2.2.7 Total road costs
In estimating road life-cycle costs, the model examines two costing scenarios. These are
the “Base” and “Extended” scenarios. What constitutes road network life-cycle costs?
What is the road financing burden on government? An accurate knowledge of road life
cycle costs is crucial for preparation of a reliable road network financing plan.
Base scenario
The base scenario considers the case of “theoretically” new roads or a network in good
condition. By assuming that the road network is already in good condition, the base
scenario estimates the annual financial requirements for keeping the network in its good
condition. The idea here is that, supposing donors were to help Ghana to construct new
roads or rehabilitate the existing network, would the country be able to generate and
allocate sufficient funds to cover:
• required routine and periodic road maintenance costs and
• annual road asset replacement costs? That is, will the country be able to make
necessary monetary savings to replace the network at the end of the economic or
design life?
16
The base scenario therefore aims at assessing the sustainability of donor-funded
reconstruction and rehabilitation projects. Many donor-funded road projects have failed
in the past because often counterpart local funds required for routine or periodic
maintenance are not made available. This model will therefore assist policymakers and
the road administration to estimate how much funds will be needed annually for road
maintenance and replacement and assess whether existing user contributions and
allocated funds are adequate to cover these road life-cycle costs.
In the base scenario, the life cycle costs therefore consist basically of the annual routine
maintenance, the annualised future periodic maintenance and the asset replacement
costs. There is also provision for administrative overhead and financing cost. It assumes
an administrative cost of 5% of net total road costs and a cost of capital of 0%. With
cost of capital of 0%, we are considering the case where road costs are financed from,
for example, interest-free loans. Though this may represent a rare scenario, by
excluding the any possible interest payment, the results of the model presents the least
costs the road sector must bear irrespective of the sources of funding available to it. See
Table 3 for a complete overview of the total network life cycle costs.
17
Table 3 Annual network life-cycle costs (base scenario)
Road class Network
Size(2003) Asset replacement costs Routine
maint. costs Periodic
maintenance. costs Total
maint Annual life-
cycle costs
Surface type km US$
/km US$m years US$m
/year US$/km
/year US$m US$/km years US$m
/year US$m
/year US$m
/year %Asset
cost
Trunk Roads 12 690 3 493 137.6 13.3 61.8 75.0 212.7 6.1%
Asphalt 1 600 500 000 802 30 26.7 1 150 1.8 110 000 12 14.7 16.5 43.3 5.4%
Bituminous 4 730 300 000 1 420 30 47.3 1 040 4.9 23 000 9 12.1 17.0 64.4 4.5%
Gravel 6 360 200 000 1 271 20 63.6 1 020 6.5 22 000 4 35.0 41.5 105.0 8.3%
Urban Roads 4 060 796 31.3 7.3 15.2 22.5 53.8 6.8%
Asphalt 410 404 400 167 30 5.6 1 900 0.8 83 550 12 2.9 3.7 9.2 5.5%
Bituminous 1 520 227 300 346 30 11.5 1 900 2.9 27 580 94.7 7.6 19.1 5.5%
Gravel 2 130 133 000 283 20 14.2 1 700 3.6 14 400 47.7 11.3 25.5 9.0%
Feeder Roads 32 610 873 43.5 13.0 38.8 51.8 95.4 10.9%
Bituminous 1 210 141 300 172 30 5.7 470 0.6 16 200 92.2 2.8 8.5 4.9%
Gravel 17 770 30 000 533 20 26.6 470 8.4 6 300 4 28.1 36.4 63.1 11.8%
Earth 13 630 12 300 168 15 11.2 300 4.1 1 250 2 8.5 12.6 23.8 14.2%
Total 49 370 5 162 212.5 33.6 115.8 149.4 361.8 7.0%
Adm. costs (5%) 10.6 1.7 5.8 7.5 18.1
Grand total 5 162 223.1 35.3 121.6 156.8 379.9 7.4%
18
Aproximately US$ 380 million is required annually to cover road maintenance and
replacement costs (see Table 3). This amount is equivalent to 7.4% of the national road
asset value.
Extended scenario
The extended scenario on the other hand considers the financing needs of the network in
its current condition. By classifying the national road network under “good”, “fair” and
“poor” conditions, the extended scenario estimates both the cost of bringing the entire
network to good condition and the recurrent costs for maintenance and asset
replacement.
The assumption here is that, as a first step, if the country’s network is in a poor
condition, it would require funds to bring it to a good condition and then later maintain
it as the need arises. This scenario is particularly important where the government must
finance from its own resources rehabilitation, maintenance and also future road asset
replacement costs. The extended scenario therefore, in addition to the recurrent
maintenance and future asset replacement costs, estimates the initial costs of clearing
existing backlog of deferred maintenance activities. The only difference between the
base and extended scenarios therefore is the initial cost of clearing maintenance backlog
in the case of the extended scenario.
To estimate the additional cost of network rehabilitation, the entire road network is
reclassified based on road class, surface type and surface condition as shown in Table 4.
For each surface type in poor or fair condition, an appropriate maintenance intervention
is recommended. Each intervention has an associated unit cost and a time interval for
repeating that activity.
19
Table 4 Cost of clearing existing backlog
Road class /
Surface type Network
condition Network
needs
Network
length
[2003]
Cost of
clearing
backlog
Over 10
years
km US$/km US$m US$m/year
Trunk roads 8 911 1 271 127.1
Asphalt 412 86 8.6
Poor Reconstruct 104 500 000 52 5.2
Fair Overlay 308 110 000 34 3.4
Bituminous 2 650 336 33.6
Poor Reconstruct 994 300 000 298 29.8
Fair Reseal 1 657 23 000 38 3.8
Gravel 5 848 848 84.8
Poor Reconstruct 4 043 200 000 809 80.9
Fair Regravel 1 805 22 000 40 4.0
Urban roads 2 889 396 39.6
Asphalt 240 62 6.2
Poor Reconstruct 132 404 400 53 5.3
Fair Overlay 107 83 600 9 0.9
Bituminous 883 122 12.2
Poor Reconstruct 487 227 400 111 11.1
Fair Reseal 396 27 600 11 1.1
Gravel 1 767 212 21.2
Poor Reconstruct 1 575 133 000 210 20.9
Fair Regravel 192 14 400 3 0.3
Feeder roads 26 267 448 44.8
Bituminous 522 45 4.5
Poor Reconstruct 291 141 300 41 4.1
Fair Reseal 231 45 300 4 0.4
Gravel 14 568 311 31.1
Poor Reconstruct 9 239 30 000 277 27.7
Fair Regravel 5 330 6 300 34 3.4
Earth 11 177 93 9.3
Poor Reconstruct 7 088 12 300 87 8.7
Fair Reshape 4 089 1 300 5 0.5
Total 38 068 2 115 211.5
Adm. costs (5%) 110 11.0
Grand total 2 221 222.1
The annual road network life-cycle costs for the extended scenario are shown in Table
5. The total network life-cycle costs therefore consist of the annualised costs of (1)
20
clearing existing maintenance backlogs, (2) current maintenance requirements and (3)
future asset replacement. Detailed calculation of annual life cycle cost is presented in
Table 33 in Appendix C.
Table 5 Annual life-cycle costs (extended scenario)
Road class/
surface type Cost of clearing
backlog
Annual
maintenance
costs
Annual Asset
replacement
costs
Annual life
cycle costs
Total Over10years*
US$m US$m/year US$m/year US$m/year US$m/year
Trunk roads 1 271 127.1 75.0 137.6 339.7
Asphalt 86 8.6 16.5 26.7 51.8
Bituminou 336 33.6 17.0 47.3 97.9
Gravel 848 84.8 41.5 63.6 189.9
Urban roads 396 39.6 22.5 31.3 93.4
Asphalt 62 6.2 3.7 5.6 11.8
Bituminou 122 12.2 7.6 11.5 31.3
Gravel 212 21.2 11.3 14.2 46.7
Feeder roads 448 44.8 51.8 43.6 140.2
Bituminou 45 4.5 2.8 5.7 13
Gravel 311 31.1 36.4 26.6 94.1
Earth 93 9.3 12.8 11.2 33.3
Total 2 115 211.5 149.4 212.5 573.4
Adm. costs 106 10.6 7.5 10.6 28.7
Grand total 2 221 222.1 156.8 223.1 602.0
Notes: *Cost of clearing backlog is spread over 10years. Interest rate used is 0%.
Approximately US$2.2 billion (see Table 5) is needed to clear existing maintenance
backlog in order to bring the entire network to good condition. A national road
development objective could, for example, involve a programme for clearing all road
maintenance and reconstruction backlogs within a defined time frame. In this case
study, a 10-year network rehabilitation programme is assumed. This implies that the
initial cost of network rehabilitation will be financed within a 10year period at an
annual cost of US$222 million, excluding interest on capital.
Additional funds will also be needed for maintenance and asset replacement at the end
of the network life. From the base scenario, annual maintenance and asset replacement
costs are US$156.8 million and US$223 million respectively. The annual life cycle cost
of the national road network therefore amounts to US$602 million. This is the amount
required, at least for the next 10years, to pay for current network improvement works
and subsequent maintenance and network replacement costs. At the end of the 10th year
when payment for the initial cost of clearing backlog is completed, the life cycle cost
reduces to US$414.5 for the rest of the network life.
21
The next step is to estimate user contributions and domestic funds dedicated for roads.
The purpose it to assess the extent to which existing user contribution and actual
allocated domestic funds cover the expected life cycle costs of the road network.
Domestic funds for the road sector have mainly come from fuel levies, vehicle
registration, vehicle inspection, toll and transit fees. In addition, the road sector also
received annual budget allocations from the consolidated fund.
Figure 6 Input parameters for estimating domestic funds
2.3 User contributions and domestic funds
User contributions are all funds generated directly or indirectly from road user charges
and domestic fund are all funds from domestic sources, which are directly allocated to
the road sector.
22
Figure 7 User contribution and domestic funds
As illustrated by Figure 7, user contribution comes exclusively from road user charges
(including fuel levy, which is also considered a road user charge). The major sources of
road user contributions in Ghana are the (1) fuel levy (2) vehicle registration fees (3)
vehicle inspection fees (4) international transit fees and (5) road/bridge/ferry tolls. The
objective of the government is to ensure that allocated user charges cover at least annual
maintenance costs (MRT, 2005, p.21). This objective has been constrained by the low
political support for review of user charges. These user charges are legislated and
always require parliamentary approval for review, but this political consensus is often
difficult to reach. Apart from fuel levy, which has benefited from some increases in
recent years to account for inflation and increasing road maintenance costs, the other
user charges have not seen any review since year 2000. Due to non-increment, coupled
with the decline in value of the domestic currency, the real value of user charges in year
2005 has decreased by about 25-32% of year 2000 figures (MRT, 2003).
Fixing of user charges take into account the damaging effect of vehicle types on the
country’s road network. They are therefore set based on axle loadings, with heavy
vehicle paying relatively higher fees. The same vehicle classification system is used for
fixing all types of user charges (see Table 6).
Road user
charges not
allocated to
roads
Domestic funds User contributions
Consolidated
funds
ROAD
FUNDS
23
Table 6 Vehicle classification and population in Ghana
Category Description Vehicle
Population
Motorcycles 112 400
Cars Taxis, private cars (saloon or estate) 427 300
Pick-up/Small buses Pick-up, landrover, jeep, buses with seating
capacity up to 25 persons 48 800
Large Buses Buses with seating capacity > 25 persons 107 400
Light Trucks 2-axle trucks with single rear wheels 37 500
Medium Trucks 2-axle trucks or tanker with twin rear wheels 16 600
Heavy Trucks 3-axle (or more) trucks or tankers 13 700
Total 763 700
Source Own compilation from DVLA (2006)
2.3.1 Fuel levies
Fuel taxes contribution to the economy is not limited to road financing alone, it is also a
source of revenue for other sectors. In the past, fuel received heavy state subsidies by
amounts exceeding total revenue from fuel taxes. In 2004, whiles the total road fund
revenue was only about US$ 100 million, fuel subsidy for the same year amounted to
about US$200 million (Energy Ministry, 2005). Since the implementation of the
petroleum deregulation policy, which began in 2003, subsidies for fuel have been
largely reduced. Furthermore, ex-refinery prices are determined by an independent body
and are based on such factors as prevailing world market oil prices and refinery costs.
As can be expected, deregulation led to increases in ex-pump prices. By April 2006, ex-
pump fuel prices in Ghana were nearly 500% of year 2000 prices (see Figure 8 below).
With the removal of subsidies, fuel taxes now represent a “true” source of revenue both
for the roads sector and for the national economy.
24
43 45
33 30
19 23
47 43
65
84
53
38
32
20
28
53 49
74
93
0
10
20
30
40
50
60
70
80
90
100
1991 1993 1995 1998 2000 2002 2003 2004 2005 2006
Year
USD cents/litre
Diesel
Super Gasoline
Figure 8 Trends in fuel prices in Ghana
Source: own compilation from GTZ (2005, p.15) and NPA (April 2006)
The fuel levies are legislated and charged per litre of fuel purchased. The total revenue
that can be generated is therefore dependent on the amount of the fuel tax and the level
of fuel consumption by all vehicles. In estimating the fuel tax revenues, two types of
fuel levies are distinguished; that is the “road fund fuel levy” and actual “user
contribution” through extra fuel taxes.
The fuel levy, which is factored into the ex-pump fuel price, is usually collected and
paid directly by the oil companies directly into the Road Fund.
The road fund fuel levy is that component of fuel tax which goes directly into the road
fund and used exclusively for financing roads. User contribution, on the other hand, is
the amount of fuel tax in excess of normal sales taxes. The analogy here is that, if fuel
should be sold under normal market conditions just like “mineral water”, with no
specific fuel related taxes added, then any tax amount in excess of normal sales taxes
can be viewed as road users “extra” contribution to the economy. The essence of this
distinction is that, by just looking at the road fund fuel levy to “judge” the extent to
which road users are “paying their way” we will be underestimating road users’ actual
contribution to road funding in the country. In other words, road users may be paying
more for using the road network than what the road fund levy revenue is telling us.
In this section, the road fund revenue will be estimated and compared with the actual
user contribution. To estimate this user contribution, it is necessary to distinguish
between “normal” and “extra” fuel taxes. It is these extra taxes, which represent users’
actual contributions. The road fund component of the domestic funds is obtained from
the road fund fuel levy.
25
In Ghana, fuel taxes and margins constitute 46% of ex-pump prices. The sources of the
taxes and how these tax revenues are used are discussed below:
Unified Petroleum Price Fund (UPPF): This fund was initiated by the Government as a
means to motivate transporters to travel to rural and distant locations, outside a radius of
200 km from the refinery. The fund has the following objectives:
• To ensure regular supply of petroleum products to all parts of the country,
• To ensure that prices of petroleum products include an element that represents
the estimated cost of distribution, and
• To achieve a petroleum products distribution system that is efficient.
A UPPF Management Committee consisting of various stakeholders from the transport
industry are responsible for the collection and disbursement of the fund. To benefit from
the fund, the Oil Marketing Companies (OMC) presents a report each month detailing
total trips made in excess of 200km from the refinery. The committee sets the unit cost
of transporting fuel, based on which the OMCs are paid.
Cross-subsidy levy: Here, super gasoline is charged an additional levy, which is used to
subsidise prices of other petroleum products e.g. kerosene and premix fuel. This levy
will be phased out at the final stage of the deregulation process. At this point there will
be no cross-subsidisation at the ex-refinery level. Rather, government taxes on specific
products will be varied to ensure the appropriate level of subsidy for each product.
Debt recovery levy: Revenue from this levy goes directly to the Tema Oil Refinery
(TOR). The fund is used to pay for TOR’s accumulated debt arising from past fuel
subsidisation. This levy will be removed once the debts are completely paid.
Road Fund levy: Revenue from road levy is directly channelled into the road fund,
which is administered by a Road Fund Board and is used mainly for financing road
maintenance activities.
Deregulation mitigating levy: The purpose of this levy is to generate revenue for
mitigating the socio-economic impact of the upward price adjustment of petroleum
products on the general public, especially the poor. The fund is distributed among the
various ministries and government agencies (as part of their annual budget allocations)
for provision of social services targeted at the poor. The fund is currently used for
subsidizing mass transport (metro buses), capitation grant and low-income housing.
Gross margin: This margin consists of both the dealer and marketer’s margins.
BOST margin: Revenue from the BOST margin is paid directly to TOR and the Bulk
Oil Storage and Transportation Company (BOST) to fund the development of needed
26
capacity for providing the required (six weeks) supply reserve. It currently supplies only
a two-week reserve.
Table 7 shows the petroleum pricing mechanism used in Ghana and how user
contribution is estimated from the various fuel taxes. The pricing mechanism for Ghana
is illustrated using data obtained from IMF (January 2004).
The ex-refinery prices are calculated using the world market crude oil prices
with mark-ups for insurance, transportation, suppliers’ commission, refinery
costs and other related charges. The supplier commission, which is often the
outcome of tendering and negotiations, is US$ 12.87 per ton. The suppliers
insurance is US$0.36 per ton. Other related charges including offloading, in
transit losses, demurrage, financial costs, storage, in-plant losses, operation
margin etc are pegged at 13.9% of Costs, Insurance, and Freight (CIF). In the
fuel pricing mechanism illustrated in Table 7, world market price of diesel and
gasoline used were respectively US$77 and US$75 per barrel (June 2006).
Table 7 Description of fuel taxes and margins (September 2006)
Fuel tax /margins Gasoline
US$ cents/ litre Diesel
US$ cents/ litre
Ex-Refinery Current Price (1) 46.65 55.21
Excise Duty Specific 7.85 9.95
Cross-Subsidy Levy 5.47 (3.00)
Primary Distribution Margin 0.48 0.48
BOST Margin 0.96 0.96
UPPF Margin 3.06 3.06
Gross Margin 7.11 7.11
"Normal" taxes & margins (2) 24.93 18.57
Debt Recovery Fund Levy 5.47 5.47
Road Fund Levy 6.56 6.56
Energy Fund Levy 0.05 0.05
Exploration Levy 0.11 0.11
Deregulation Mitigating Levy 4.84 0.00
"Extra" taxes (3) 17.03 12.19
Ex-pump price (4) = (1)+(2)+(3) 88.61 86.01
User contribution = (4)-(1)-(2)= (3) 17.03 12.19
Source Own compilation and analysis with data obtained from NPA (September 2006) and IMF
(January 2006). Exchange rate US$ 1=GHC 9,145
From Table 7 the total user contribution, which is all “extra” taxes, is US$ 17.03 cents
for gasoline and US$ 12.19 cents for diesel. It is also equivalent to the ex-pump price
less ex-refinery price and “normal” taxes and margins. The road fund fuel levy is
27
currently fixed at US$ 6.6 cents. This implies that only about a half of what users
contribute, in terms of extra fuel taxes, go to fund roads.
The next stage is the estimation of annual fuel consumption. With fuel having limited
alternative use in Ghana aside the transport industry, it is convenient to assume that
vehicles use all premium and diesel produced. Moreover, since fuel taxes are fixed into
the ex-depot prices, consumers’ pay the taxes even if the purchased fuel will be used for
other purposes. There is current no fuel tax refund for none transport use of fuel in
Ghana.
Annual gasoline and diesel consumption in Ghana is about 1.6 million metric tonnes
with about two-thirds been gasoline. The estimated user contribution and revenue from
road fund fuel levy is presented in Table 8.
Table 8 User contribution and road fund revenues from fuel taxes
Fuel type Consumption
[2005] Revenue from
road fund fuel levy User contribution
from fuel
Levy Revenue “Extra taxes” Revenue
Metric tons US$-cents US$m US$-cents US$m
Gasoline 652 400 6.56 57.3 17.03 148.8
Diesel 961 000 6.56
72 3
12.19 134.4
Total 1 613 400 129.6 283.2
Source: MRT, 2005 and TOR, 2006.
2.3.2 Vehicle registration fees
In addition to vehicle import duties, imported vehicles are charged a one-time
registration fee. This fee is collected by the custom agency and paid directly into the
road fund. On average, about 50,000 vehicles are imported annually into the country.
Even though the number of registered vehicles continues to increase consistently,
revenue is still low due to declining real value of the registration fees.
28
Table 9 Registered vehicles and current user charges
Vehicle category Registration
fee per vehicle
(US$)
Number of
Vehicles registered
in 2005
Total revenue
US$m
Motorcycles 5.6 15 150 0.08
Cars 22.0 29 600 0.65
Pick-up/Small buses 33.0 8 700 0.29
Large Buses 43.9
5 600
0.25
Light Trucks 55.6 2 500 0.14
Medium Trucks 72.2 960 0.07
Heavy Trucks 131.8 1 380 0.18
Total 63 870 1.66
Source Own compilation from MRT (2004). Exchange rate US$ 1=GHC 9000
2.3.3 Vehicle inspection fees
Vehicles in Ghana are required to undertake a compulsory semi-annual vehicle
roadworthiness test. Revenue from vehicle inspection is therefore based on the level of
compliance. The current level of compliance is only 40%. To add to this constraint,
current fees are low in real terms, as they have not been reviewed since 1998. (See
Table 10 for current inspection fees and estimated annual revenue)
Table 10 Inspected vehicles and user charges in 2005
Vehicle category Inspection fee
per vehicle
(US$)
Vehicles
inspected in 2005 Total
revenue
US$m
Motorcycles 2.2 89 900 0.20
Cars 2.2 341 800 0.75
Pick-up/Small buses 3.3 39 000 0.13
Large Buses 3.8 85 900 0.33
Light Trucks 3.3
30 000
0.10
Medium Trucks 4.4 13 300 0.06
Heavy Trucks 11.0 11 000 0.12
Total 610 900 1.69
Source: Own compilation from MRT (2004). Exchange rate US$ 1=GHC 9000
Other constraints on revenue mobilisation from vehicle inspection are (MRT, 2004,
p.43):
• incomplete database of registered vehicles, retired vehicles or vehicle due for
inspection,
29
• almost complete reliance on voluntary inspection by vehicle operators due to
inadequate enforcement and,
• testing of vehicle before registration does not attract any inspection fee.
2.3.4 Tolls and international transit fees
Tolling of roads, bridge and ferries is another important road user charging instrument.
It is a direct charge for the use of specific facilities designated as toll roads or bridges.
The fee is based on the axle load configuration of vehicle. In Ghana, only about 4% of
the national trunk roads currently tolled. The Ghana Highway Authority, on behalf of
the government, has contracted private companies to collect tolls (on roads, bridges and
ferries) and pay a fixed monthly amount to the road fund. The road fund board
determines the toll rate to be charged by the private companies. All toll revenues are
channelled directly into the Road Fund.
International transit fees operate in a similar way. The only difference is that custom
agents collect the transit fees at the border, instead of private companies, and pay
directly to the road fund. Domestic and foreign vehicles of the same class pay the same
transit fees. The transit fees and tolls charged depend primarily on vehicle axle loading.
Due to non-increment current transit fees and tolls are very low compared to
international standards. Table 11 estimates revenues from international transits and
tolls.
Table 11 Annual toll road trips and international transits with user charges
Toll revenues International transit
revenues
Vehicle
category Fee
(US$-
cents
)
No. of
trips Total
revenues
Fee
(US$-
cents
)
No. of
transits Total
revenue
Motorcycles 2.2 3 237 400 0.07
Cars 5.5 12 308 700 0.68 2.2 179 500 0.39
Pick-up/Small 8.8 1 405 300 0.12 2.4 76 900 0.19
Large Buses 14.3 3 094 500 0.44 4.4 59 700 0.26
Light Trucks 19.8 1 079 200 0.21 2.6 20 500 0.05
Medium Trucks 19.8 479 300 0.09 4.4 9 200 0.04
Heavy Trucks
44.0 395 600 0.17 5.5 7 200 0.04
Total 22 000 000 1.80 353 000 0.98
Source: Own compilation from MRT (2004). Exchange rate US$ 1=GHC 9000
Notes: Number of toll road trips and international transits were estimated from year 2005 toll
and international transit revenues. Assumption: total toll road trip is distributed in the
same proportion as existing vehicle categories.
30
2.3.5 Total domestic funds and user contribution
Having identified all relevant road revenue sources and discussed the inputs for
estimating the annual road revenue, Table 12 shows the model results of domestic funds
and road user contributions. Detailed calculation of the total road fund revenue and user
contribution can be found in Appendix D.
Table 12 User contributions and total domestic funds for Ghana
Sources Domestic funds User contribution
Fuel 129.60 283.30
Vehicle registration 1.66 1.66
Vehicle inspection 1.69 1.69
International transits 0.98 0.98
Tolls 1.80 1.80
Consolidated funds 49.40
Total 185.13 289.43
As can be observed, total user contribution is about US$290 million but domestic fund
allocated to roads is only US$185 million. In assessing the extent to which users are
users are contributing to road financing, policymakers must be aware of the fact that
over 45% of what they actually pay are not allocated to roads.
2.3.6 Total road costs and available domestic funds
Due to limited financial resources, road budget allocations are often far less than needed
funds for both new investment and maintenance costs. As can be observed in Table 13,
current domestic fund budget is can cover 53% of needed maintenance costs and 47%
of annual replacement costs. Periodic maintenance appears to be the most heavily
under-funded. The available budget is able to cover only 41% of the expected costs. If
the cost of clearing existing backlog is included, then Ghana’s existing domestic fund
budget is only able to cover 31% of annual road sector expenditure.
31
Table 13 Comparison between total road costs and available domestic funds
Road activities Total
costs
Available
domestic
funds
Ratio of
domestic funds
to total road
costs
US$m US$m %
(a) Routine Maintenance 33.6 37.5 112%
(b) Periodic Maintenance 120.8 41.0 35%
(c) Total maintenance 154.4 78.5 53%
(d) Replacement 212.5 99.4 47%
(e) Administration 18.3 7.4 41%
Total costs (interest rate=0%) 385.2 185.2 49%
Total costs (extended 602.0 185.2 31%
(a)Main roads 208.6 78.2 37%
(b)Urban roads 54.4 48.7 91%
(c)Feeder roads 103.9 47.9 50%
(d)Administration 18.3 10.4 57%
Total (interest rate=0%) 385.2 185.2 49%
Total costs(extended scenario) 602.0 185.2 31%
Source own analysis and compilation with data obtained from MRT (2005)
Trunk roads constitute only 26% of the total network size but accounts for 54% of total
annual road life-cycle costs. Due to inadequate financial allocation, only 37% of the
estimated annual cost of US$208.6 million for trunk roads is allocated.
32
3 ROAD FINANCING PERFORMANCE INDICATORS
3.1 Objectives
How do we measure the extent to which sector objectives have been realised? How do
we assess the performance of the road administration in the achievement of these
objectives? To ensure that results of the model are useful to policymakers and the road
administration, performance indicators that are measurable, comprehensive and holistic
are developed. The indicators are tools for measuring the road sector performance in
terms of revenue generation and allocation and the extent to which these funds cover
estimated life cycle costs of the network. To be objective and relevant, the performance
indicators ought to be broad enough to capture the essential concerns of the government
and road administration (Talvitie, 1998, p.25). They should also be flexible enough for
use across different country contexts, and specific enough to be measured.
To summarise, performance indicators developed in this chapter is intended to assist the
road administration to:
• assess the degree to which road sector programmes have achieved their intended
objectives,
• assess the efficiency in the road administration in implementing sector policies,
• develop alternative means of achieving financial objectives – for example by
considering alternative sources of user revenues or cost minimisation strategies,
and to
• make comparison between different countries – i.e. through benchmarking and
providing opportunities for sharing experiences.
Since the purpose of developing performance measurement tools is to monitor
performance and reveal areas of road asset management that require improvement, it is
important that the appropriate indicators are identified. The road administration should
use its vast experience and data collected over the years to identify relevant
performance indicators. Perhaps the most important criteria for the selection of
indicators are that they should be both relevant to the country context and measurable at
reasonable costs.
Two sets of performance indicators are discussed in this section, namely; key and
secondary indicators.
33
3.2 Key performance indicators
3.2.1 Definition
Based on the objectives of the thesis, the definition of key performance indicators for
the road sector includes the three main measurement parameters, namely; user
contribution, domestic funds and total road costs. The key indicators therefore examine
specific performance measurements such as allocated domestic funds as share of users’
actual contribution, and domestic funds in relation to estimated road life-cycle costs.
For example, user contribution in relation to total road costs measures the extent to
which road users are contributing to the financing of road network life cycle costs. It
also attempts to ask the questions; are current user charges high enough to recover
expected costs? Will user charges have to be increased? Should government consider
alternative sources of revenue?
The indicator – domestic funds in relation to total road costs – is concerned about the
funds allocation issues. It asks the question; how much of domestic financial resources
are invested in roads? It measures a country’s effort in financing its road network. It
indirectly measures the extent of donor support required for a sustainable financing of
the network. Finally, by comparing this indicator with user contribution it is possible to
estimate the extent to which the road sector cross-subsidizes other sectors of the
economy.
Table 14 defines and describes these key performance indicators.
34
Table 14 Key performance indicators
Performance
Indicator Description Purpose Considerations Source
User contribution in
relation to total road
costs
The expected user
contribution (to the
economy) in comparison
with total road costs.
To what extent are user
contributions covering estimated
total road costs?
Total user contribution
expressed as percentage of
total road costs.
Own
contribution
Domestic funds as
share of total road
costs
The expected funds from
domestic sources in
comparison to total road
costs.
Is the country able to fund
estimated road life-cycle costs
solely from the allocated
domestic funds?
Total domestic funds
expressed as a percentage of
total road costs.
Own
contribution
Domestic funding as
share of user
contribution
The proportion of user
contributions that actually
goes to fund roads.
What is the extent of cross-
subsidization between the road
sector and other sectors?
Total road fund revenue
expressed as a percentage of
total user contributions
Own
contribution
35
3.2.2 Results
This indicators measure the extent to which existing user contributions and allocated
domestic funds cover estimated life cycle costs of the road network.
Table 15 Key performance indicators
Performance indicator Ghana
User contribution in relation to
(a) routine maintenance costs 862%
(b) total maintenance costs 194%
(c) total costs (base scenario) 76%
(d) total costs (extended scenario) 48%
Domestic funds in relation to
(a) routine maintenance costs 551%
(b) total maintenance costs 124%
(c) total costs (base scenario) 49%
(c) total costs (extended scenario) 31%
Domestic funds as share of user contribution 54%
User contribution
From Table 15, existing user contributions in Ghana are sufficient to cover all expected
maintenance costs but can fund only up to 76% of the estimated total road costs. This
implies that if government decides to allocate all revenues from road user charges to the
road sector, these user contributions are sufficient to finance up to 76% of expected road
costs. Moreover, if the cost of clearing existing maintenance is included, then user
contribution can cover only up to 46% of total road costs.
This funding gap means existing user charges do not sufficiently cover the cost of the
road network and government must develop strategies to address this funding shortfall.
Domestic funding
On domestic funds as share of user contribution, the results show that only 54% of what
road users in Ghana contribute is eventually allocated for road financing. This also
implies that 46% of what road users in Ghana are contributing actually goes to subsidize
other sectors of the Ghanaian economy. Again, existing allocated domestic funds are
sufficient to fund road maintenance, but are only able to finance 49% of the total costs
in Ghana. If the costs of clearing current maintenance backlogs are included, domestic
funds are only able to cover 30% total road costs in Ghana.
36
3.3 Secondary performance indicators
3.3.1 Definition
The secondary indicators (described in Table 16) measure indirect impacts of road
sector under funding and also help in appropriately interpreting the key indicator figures
and to make cross country comparisons. For example, if country A has a higher user
contribution as share of total road costs than country B, it may not necessary mean that
road users in A are paying higher user charges compared to B. it may fair comparison it
will be important to consider the various parameter which affect values of the key
parameters. Countries with say a low level of motorisation may still have a higher user
contribution if user charges are higher. This implies that the key parameter does not
consider what individual users are paying but rather the aggregated amount. Again,
countries with huge network size, because of say dispersed population, will have
relatively higher network life cycle costs with must be must be financed by few users.
Network size and level of motorisation will therefore make significant differences in
indicator values measure at the macro and the micro levels.
Some examples of the secondary indicators used are road density and road costs in
relation to annual GDP, user contribution per vehicle, total road costs per vehicle and
total road costs per citizen.
37
Table 16 Secondary Performance Indicators
Performance
Indicator Description Purpose Considerations Source Benchmark
(target)
Road density Road length per land
area
To measure the extent of
a accessibility by road
Total network size divided by the
country’s land area. Measured in
km/km2
Own
contribution
N/A
User contribution
per vehicle
The average expected
user contribution (to
economy) from each
registered vehicle
To estimate the expected
(and relative)
contributions from each
vehicle
The user contribution per vehicle
is the annual expected
contribution from each vehicle
Own
contribution
N/A
User contribution as
share of GDP
The total amount road
user contribution to the
economy, measured in
relation to annual GDP
To estimate road users
contribution to the
economy
The user contribution per GDP is
the annual expected contribution
from road users as a percentage of
annual GDP
Own
contribution
N/A
User contribution
per capita
The average expected
revenue from each
citizen
To estimate expected
revenue when population
size is known
The user contribution per capital
is the annual average expected
revenue contribution from each
citizen
Own
contribution
N/A
38
Performance
Indicator Description Purpose Considerations Source Benchmark
(target)
Allocated domestic
funds as share of
GDP
Total annual funds from
domestic sources as
share of annual GDP
To monitor the extent of
national self-support to
network preservation
Domestic funds allocated to the
road sector expressed as a
percentage of GDP
Own
contribution
N/A
Road maintenance
costs as share of
GDP
The ratio between
estimated cost of road
maintenance and GDP
To measure the road
maintenance burden on
government
Total road maintenance costs as
percentage of GDP. Useful for
cross-country comparison
Heggie I.G.
(2004)
0.5-1.0 %
Total road spending
as share of GDP
The ratio between
annualised life cycle cost
of road and GDP
To measure the road
costs burden on
government
Estimated road costs as
percentage of GDP. Useful for
cross-country comparison
Heggie I.G.
(2004)
1.0-2.0 %
Affordable (or
maintainable)
network
The percentage of road
network, which can be
effectively managed or
maintained.
To estimate the network
size that can be
effectively managed by
the Road Authority.
Represent the proportion of the
national road network which can
be adequately maintained from
available funds
Own
contribution
N/A
39
3.3.2 Results
The second set of indicators, previously defined and described in Table 16 in
Appendix B, examines more general performance indicators, which can assist
stakeholders in properly interpreting the results of the key indicators (see Table 17 for
results of secondary performance indicators).
Table 17 Secondary performance indicators for Ghana
Performance indicator Ghana Unit
Road density 0.21 km /km2
User contribution per vehicle 379.0 US$/year
User contribution as share of GDP 3.3 %
User contribution per capita 13.8 US$/year
Domestic funds as share of GDP 2.1 %
Road maintenance costs in relation to total road costs 39.3 %
Road maintenance costs as share of GDP 1.7 %
Total road costs as share of GDP 4.3 %
Affordable network (with domestic funds) 35.7 %
Affordable network (with user contribution) 76.2 %
User contribution
If a government policy requires that road costs be solely financed from user charges,
then with the same network size and comparable costs, countries with higher levels of
motorisation can expect to have relatively lower user charges. To what extent should
users contribute to financing an oversized network? Will it be economically justifiable
for road user to pay for roads, which have been oversupplied?
Road maintenance costs
Road maintenance is an important component of a road-financing plan. The cost-
revenue model indicates that to ensure that maintenance is not under funded, road
maintenance funds should be about 39%. In other words, for maintenance to be fully
carried out in Ghana, on an annually basis, government must allocate 1.7% of annual
GDP for road maintenance. The total road cost as share of GDP is 4.3%. This figure
will be higher if the costs of clearing existing maintenance backlogs are included.
Currently government annual road budget allocation from domestic sources to the
road sector stands at 2.1% of GDP – which is roughly 50% of what is actually
required. Current maintenance spending is 0.9% of GDP. Table 18 compares
maintenance spending among selected developing countries.
40
Table 18 Road maintenance spending in relation to GDP
Source: International Road Fund 2000. World Road Statistics, Geneva.
Affordable (or maintainable) network size
Supposing domestic funds are the only sources of funds for the road sector, then this
means that based on existing level of domestic funding, only 36% of Ghana’s road
network is “affordable”. On the other hand, if user contributions are the sole source of
sector financing and if all were allocated to the road sector, then up to 76% of
Ghana’s road network is maintainable with current user contributions.
Another indicator, which measures the burden of road costs on a country, is road
density. As can be expected, countries with higher road densities (measured in
km/km2) will have relatively greater road funding burden compared with countries
Year Maintenance
expenditure
US$ million
GDP in
1998 Maintenance as
share of GDP
Africa:
Benin 1996 6 2 300 0.25
Burkina 1996 9 2 600 0.33
Kenya 1996 202 11 580 1.74
Lesotho 1996 13 790 1.64
Malawi 1996 7 1 690 0.41
SA 1996 720 133 500 0.54
Tanzania 1996 43 8 000 0.54
Average 0.78
Latin America:
Bolivia 1996 58 8 590 0.67
Costa Rica 1996 32 10 480 0.30
Ecuador 1997 89 18 360 0.48
Average: 0.49
Asia:
Korea 1996 1 780 320 750 0.56
Thailand 1996 878 111 300 0.79
Average 0.67
Eastern Europe:
Croatia 1998 100 21 750 0.46
Czech 1998 240 56 380 0.42
Hungary 1998 305 47 800 0.64
Latvia 1998 76 6 400 1.19
Lithuania 1998 58 10 700 0.54
Poland 1998 1 100 158 600 0.70
Slovakia 1996 240 20 360 1.17
Slovenia 1998 320 19 500 1.64
Average 0.84
41
with lower road densities. Higher road density means greater accessibility, but it also
implies higher required road investment and maintenance costs. It is therefore
important for a country to strike an appropriate balance between the need to increase
accessibility - by building more roads – and reducing life cycle costs by keeping to an
affordable (or maintainable) network size.
3.4 Trend analysis: required funds, available funds and reliance on
donor funds
Total funds released to the road sector have been on average US$ 200 million per
annum. On average government has contributed some US$ 110 million and the donors
some US$ 90 million on an annual basis (Danida, 2000).
Trend analysis over the past decade shows that funding for the road sector has been
very unpredictable. There has been a consistent disparity between required road sector
funds and actual realised (or available) funds. During the implementation of
Government’s Highway Sector Investment Programme (HSIP1 for the period 1996-
2000), average annual releases for the road sector amounted to US$200 million. These
annual releases declined to US$115 million on average for the period (2001-2003).
Table 19 Comparison of required, approved and released funding (1996-2003)
Year Required
funds Approved
funds Released
funds % Required
funds released
1996 284 264 204 72
1997 310 238 233 75
1998 402 244 220 55
1999 375 208 219 58
2000 357 216 135 38
2001 280 110 95 34
2002 295 205 109 37
2003 402 223 143 36
Average 338 213 170 50
Evaluation of the HSIP for the period 1996-2003 indicates that, due to limited
available funding, only 63% of required sector programmes were approved and only
50% of the required funds were finally released (see Table 19). As can be observed,
1 The HSIP was developed by the MRT with donor agencies in 1996 on finding a common approach to
road maintenance and development. The objective was to address a common programme, remove
duplicity and multiplicity of efforts and achieve a common goal of improving road infrastructure in the
country (Source: MRT, RSDP Review Report 2003)
42
the released funds have been declining both in value and as share of required funds.
This shortage of funding, together with high rate of inflation, resulted in deferred
execution of both road maintenance and road development programmes. The shortfall
also indicates that projects with very high economic returns are not been undertaken
because of lack of liquidity (MRT, 2004).
Another trend worth discussing is the extent to which the road sector reliance on
donor grants and loans. Even though road funds releases are increasing and taking a
larger share of total available funds, the sector still depends very much on donor
support to meet both road maintenance and asset replacement requirements (see
Figure 9).
98 97 112
74 60
13 32 49
106
75 98 45
93
24
19
26
22
41
31
37
63 52
51
63
51
72
89
0
50
100
150
200
250
1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
Released funds (US$ millions)
Road funds Consolidated funds Donor funds
Figure 9 Road sector financing trends in Ghana (1996-2003)
Donor support for the implementation of the Road Sector Development Programme
(RSDP, 1996-2003) was about US$530million, representing about 40% of total funds
released during the period.
For the planned programme 2002-2004, donor contribution secured was
US$877million (about 70% of estimated total road sector budget). This target was not
achieved, a situation which resulted in backlog of road maintenance for that period.
The financial status of the RSDP (2002-2004) as of June 2004 is shown in the Table
20 below. The table also shows the main donors, and their contributions, over the past
decade (MRT, 2003).
43
Table 20 Financial analysis of the RSDP as of June 2004
Funding Source Secured Fund
(US$m)
Commitments
(US$m)
Disbursements
(US$m)
Consolidated Fund2 114 60 51
Road Fund3 230 281 -
HIPC 999
AfDB 133 53 19
BADEA 17 14 8
AFD 22 25 12
Chinese Govt. 28 28 -
Danida 66 9 10
DFID 60 35 28
Dutch Government 27 - -
Ecowas 6--
EU 100 61 18
IDA 238 176 62
JICA 93 93 5
KfW 58 58 16
Opec Fund 21 17 12
Saudi Fund 11 - -
Total Fund 1 203 918 249
Source: MRT (March 2005). First Quarter Report. (Electronic Version) Accra: Ministry of
Roads and Transport, Ghana.
To elaborate, by mid-2004 cumulative donor fund commitments and disbursements
amounted to only 56% and 40% of secured donor funds respectively (from Table 20).
Although donor funds have been critical in financing past needed road improvements,
existing level of disparities between secured, committed and actual disbursed donor
funds clearly indicates that government cannot (or must not) rely on donor pledges for
long-term financial planning of the road sector. Discussions with road administrators
in the country appear to suggest that government is aware of the fact that a long-term
measure to sustainably fund the road sector is taking steps to increase the Road Fund
share of total sector budget. There is a consensus that, to finance the road sector on a
sustainable basis it must be made less dependent on donor support. In order to meet
increasing road funding needs, government plans to expand the user-pays concepts
generate more funds from road users.
2 Funding provided for the period 2002-2004
3 Funding provided for the period 2002-2004
44
The next chapter discusses the current state of highway tolling, in the context of
private sector participation initiative in infrastructure financing in the country. It
particularly reviews existing shortcomings with toll management and operations
systems, legal framework and suggests ways of improving on existing tolling
operations in the country.
45
4 STATE OF HIGHWAY TOLLING IN GHANA
Due to dwindling budgetary allocation for routine and periodic maintenance of roads
in Ghana, the Government under the Ghana Road Fund Act 1997 endorsed road
tolling as one of its major sources of revenue. Toll revenues currently constitute about
2.5% of total Road Fund revenue. Unfortunately, tolling as a source of Road Fund
revenue is not properly developed. With the implementation of current policies on
tolling of roads in Ghana this share is expected to increase.
In Ghana, only the Accra-Tema Motorway and selected bridges and ferry crossings
were initially tolled under the Toll Decree, NRCD 153 (1973)4. With further
developments in the road sector from the 70’s through to the 90’s came the need to
expand the principle of “fee-for-service” towards the cost of road maintenance and
reconstruction of roads across the country. Since 1999 approximately 280km of
additional highways have been tolled.
The Ghana Road Fund Board is responsible for collecting tolls on selected
roads/bridges on the national road network, depending on traffic levels, the condition
and importance of the infrastructure. The Ghana Highway Authority and some private
firms collect the tolls on behalf of the Board.
4.1 Existing legislative framework
The Public Works Department was responsible for toll collection at the inception. The
responsibility was transferred to the Ghana Highway Authority on its creation in 1974
under NRCD 298. This function has been retained under the GHA Act, 1997 (ACT
540).
The Tolls Decree (1972) empowered the then commissioner of Works and Housing to
make regulations by Legislative Instruments declaring any road, bridge and ferry to be
tolled, fix the tolls to be levied and to exempt any class of motor vehicles from the
payment of such tolls.
The current legal basis for private sector involvement in the development toll roads
are the Ghana Investment Promotion Centre (GIPC) Act, 1994 (Act 478) and the
Ghana Highway Authority Act, 1997 (Act 540). The GIPC Act provides that non-
Ghanaians may invest and participate in any operations in Ghana. By virtue of this
provision, BOT road projects may be lawfully undertaken.
4 Ministry of Roads and Transport, Government’s Policy on Tolling of Roads, Ghana, January 1997.
p.1.
46
The GHA Act specifically empowers the Authority, subject to cabinet’s approval, to
negotiate concession agreements with private sector entities to enable them finance,
build and operate selected trunk roads as toll roads.
The draw back in the legal framework of the provisions for private sector participation
is that the policies (MRT, 2003)5 are still very general in outlook and do not appear to
provide any specific guidelines, processes and procedures by which road projects may
be undertaken under the various financing schemes.
4.2 Toll road network
The key criteria for selection of roads for tolling is the traffic level, which gives an
indication of possibility of regrouping investments made within an agreed concession
period for the operation of the facility. Irrespective of the total length, each toll road
has only one toll point.
Table 21 Existing toll roads and the locations
Name of Road Location of toll
station No. of toll
Points Length
(Km)
1 Accra – Tema Tema
Accra 1
1 20
2 Kumasi – Sunyani Tabere, Ashanti Region
Bechem, Brong Ahafo R. 1
1 129
3 Kumasi- Mampong
- Ejura Aboaso, Ashanti Region
Kyeremfaso, Ashanti R. 1
1 85
4 Tema – Akosombo Afienya, Greater Accra 1 75
Total 309
Source: GHA (2004, p.1). Report on Traffic Studies on the 13 No. Road /Bridge Sites for the
Ghana Road Fund. Ghana Highway Authority.
5 Ministry of Roads and Transport, Government’s Policies on Tolling of Roads, Draft Policy Paper,
MRT, Ghana; January 2003.
47
Table 22 Existing toll bridges and their locations
Name of
bridge Location of toll station Number of toll
points
1 Adomi Atimpoku, Eastern Region 1
2 Sogakope Sogakope, Volta Region 1
3 Kade Kade, Eastern Region 1
4 Assin Praso Assin Praso, Central Regions 1
5 Adiembra Adiembra, Ashanti Region 1
6 Ankobra Ankobra, Western Region 1
7 Jumoro Jumoro, Western Region 1
8 Bamboi Bamboi, Northern Region 1
9 Asukawkaw Asukawkaw, Volta Region 1
Source: GHA (2004, p.1). Report on Traffic Studies on the 13 No. Road /Bridge Sites for the
Ghana Road Fund. Ghana Highway Authority.
With appropriate policies that involve the private sector, Ghana can expand its
existing toll road network and serve as a good source of road funding in the country.
Some developing countries have successfully developed toll road concessions of
which Ghana can share in their experiences.
Table 23 below summarizes the scope of toll road provision in selected countries in
comparison with Ghana. The trend towards increased tolling of road is very clear. Toll
roads in these countries form a significant proportion of their expressway network and
plays important role in intercity and international trade. It has also been an important
source of revenue for funding road construction and road maintenance activities.
48
Table 23 Toll road network size in selected countries
Country Total
road
network
Total
expressway
network
Tolled
road
network
Tolled
roads Tolled
roads
km km km (% total) (%
Argentina
500 000 10 400 9 800 1.96 94
Brazil 1 980 000 - 856 0.04 -
Chile 79 800 - 3 0.00 -
France 966 000 14 900 6 300 0.65 42
Hungary 156 600 440 57 0.04 13
Indonesia 260 000 530 530 0.20 100
Italy 314 360 6 400 5 550 1.77 86
Japan 1 144 360 15 100 9 200 0.81 61
Korea,Rep. 77 000 1 880 1 880 2.44 100
Malaysia 94 000 1 700 1 130 1.20 66
Mexico 303 260 5 700 5 680 1.87 100
South Africa 525 000 1 440 825 0.16 57
Spain 343 200 7 200 2 250 0.66 31
Ghana 40 190 30 30960.77 100
Sources Heggie and Vickers (1998). Commercial Management and Financing of Roads. Technical
Paper No. 409. World Bank, Washington, D.C., USA.
4.3 Private sector participation
Considering the proportion of the road network in poor condition, roughly 40% by
2003 (MRT, 2004), it will take the Government of Ghana, even with development
partner support, a very long time to clear existing backlog of required maintenance
works. The need for private sector support in road transport financing and
management is therefore crucial for road network preservation and economic growth.
The following concurrent events have strengthened the justification for the
involvement of the private sector in the development and tolling of roads in Ghana:
• Shortfall in traditional sources of revenue,
• growing popularity and acceptance of the fee-for-service concept and
• the trend to privatise services
Management and operation of tolls has been the responsibility of the public sector
since the inception of tolling in the country in 1963. The Accra-Tema motorway is the
6 Only 30km of the road network is expressway. Some truck roads (total of about 280km) have also
been tolled in addition to the 30km expressway.
49
first highway in the country to be tolled. The Ghana Highway Authority collected
tolls on the Accra-Tema motorway and other highways, which were subsequently
tolled, but the process was plagued with many problems. Some of the problems
encountered with the public collection arrangement were:
• laxity in ensuring that all users of the facility pay approved pays,
• leakages in revenue collected and
• ineffective monitoring and control systems
Due to the above shortcomings with the public sector toll collection, the need to
involve the private sector became more imminent. In 1999, a pilot scheme of
involving the private sector in the collection of toll was introduced. In this scheme,
individual private companies could bid for toll collection contracts. The contract
basically allows the private sector to collect tolls at the various toll plazas and then
pay a fixed monthly amount into the Road Fund Account.
The involvement of the private sector in toll collection led to about 50% increase
(including agency overheads) in revenue generation on Accra-Tema Motorway alone.
Government intends to fully explore the possibility of the private sector participation
in the development of toll roads in an effort to access additional funds for improving
the road network. The major schemes identified (MRT, 2003) are
• Build, Operate and Transfer (BOT and its derivatives
• Rehabilitate, Operate and Transfer (ROT) and its derivatives
• Maintain, Operate and Transfer (MOT) and it derivatives and
• Toll Collection Only
4.4 Toll collection contracting
The existing practice of involving the private sector in the management and operation
of road toll collection is through competitive tendering. The main objective has been
to maximize toll collection to meet routine and periodic maintenance. The Ghana
Road Fund Board selects candidate roads for tolling based on set guidelines that
include road quality and traffic volume. The scope of the services to be provided in a
Toll Collection Only contract typically includes:
• Management and collection of approved tolls on the toll roads;
• Payment of agreed monthly amount into the Road Fund Account;
• Provision of needed security for the safety of the collection and
• Maintenance of the toll facility.
The bid defines the responsibilities of parties and calls for submission of both
technical and financial proposals from prospective bidders. The contracts are awarded
50
for a two-year renewal option, with negotiation of the monthly fee at the break point.
The contract states the fee for each class of vehicle and the expected monthly
remittance to the Road Fund Board for each candidate road.
Table 24 Existing toll collection companies and contracted annual remittances
Infrastructure type Toll collection
company Annual remittance
(US$)
Roads
Accra – Tema Crown Channel 280 000
Tema – Accra Sedan Ventures 325 000
Kumasi – Sunyani Oti Yeboah 200 000
Sunyani – Dormaa – Ahenkro Kapkkon 79 000
Kumasi – Mampong - Ejura Seidu Mahama 135 000
Kintapa – Tamale - Bolgatanga Alolo Brothers 167 000
Tema – Akosombo Crown Channels 122 000
Bridges
Adomi K.D.V. Lexicon 90 000
Beposo Abba Bild. Centre 173 000
Dunkwa-On-Offin Top Target 20 000
Sogakope Prime Stars 96 000
Total 1 687 000
Source PricewaterhouseCoopers, (March 2004). Preparation of the Economic, Financial,
Technical and Administrative Framework for Road Concession Projects in Ghana,
Inception Report, Ministry of Roads and Transport, Ghana. p.19.
4.5 Toll management and operation
4.5.1 Tolling Method
Manual collection method is currently used on all toll roads in Ghana. The drawback
is that it is slow and has been one of the major causes of congestion on toll roads in
the country especially the Accra-Tema Motorway. It has also been a source of road
accidents. There have been cases where vehicles ran into tollbooths as well as
bumper-to-bumper accidents as vehicles queue at toll points.
4.5.2 Ticketing
Tickets are printed by the GHA. They are in the denominations of ¢200, ¢500, ¢800,
¢1000 and ¢2000. Combinations of these tickets are also used. For example, ¢500
and ¢800 for vehicles that have to pay ¢1300. Crown Venture, operators of the Accra-
51
Tema Motorway operates three (3) work shifts; these are; 7am-1pm, 1pm-7pm and
7pm-7am. Toll Collection is done everyday of the year.
Crown Venture has put in place measures to minimize revenue leakages. These
include “Stop Checks” by security staff at the toll points to ensure that drivers pay.
There are also random checks on Collectors. The relative better service conditions
offered by the private operators to their collectors appear to have helped minimize
pilfering of toll revenues as was commonly associated with GHA management.
4.5.3 Safety and security
It is the responsibility of the operator to ensure safety of motorist, pedestrians and
vehicles in and around the immediate environs of the toll points as well as provide a
service patrol along the toll road. Crown Ventures Toll operators have Workman
Compensation Insurance with State Insurance Company (SIC) for their staff.
The company has employed security agents to ensure the safety of toll collection
personnel. There have also been attempted cases of armed robbery at toll points in the
past.
4.5.4 Toll rates
The toll rate to be paid by each category of vehicles is set by the Ghana Road Fund
Board. The operators are required to display a copy of the approved toll rates in a
conspicuous location within the toll point for the information of all motorists at all
times. The vehicle categorization for tolling purposes is done by the Board. The Board
also determines which classes of vehicles are exempted from paying tolls.
There is currently no road pricing formula being used in the determination of tolls.
They are very low compared to international standard and are the same for all roads
and bridges irrespective of the condition or level of service provided by these
infrastructure. There are periodic percentage adjustments, but prices have not been
adjusted since 1997 even though consumer price index has increased by
approximately 135% between 1997 and 2005.
There is need to research into and apply road pricing in Ghana, so that prices reflects
cost of actual road use. Tolls are levied on a single point basis, with most roads and
bridges having only one toll plaza, irrespective of their length. Existing tolls are not
distance related. It is intended that on the longer roads toll plazas should be spaced at
intervals of about 50km, depending on junction layout. but considering existing low
levels of toll rates, it does not appear economical to invest in the provision of more
toll plazas.
52
5 PUBLIC PERCEPTION SURVEY ON HIGHWAY TOLLING IN
GHANA
Funding for highways come from the Consolidated Fund, the Road Fund and donor
assistance. However, total revenues from these sources are not adequate for meet the
financial requirement of highway network expansion and maintenance. Currently,
road and bridge tolls account for less than 5% of total road funds for only
maintenance activities. To bridge the existing gap between available funding and
needed highway improvement and maintenance in the country, the Ghana Road Fund
is putting in place the system expansion of toll roads involving the use of various
concession schemes. To ensure sustainability of any road concessioning policy, it is
imperative to assess the level of support from stakeholders in the transport industry -
especially highway users. A toll road policy cannot be successful in the long run
without sufficient public support, which should be reflected in road users’
willingness-to-pay. This chapter reports on a public perception survey conducted in
Tema in April 2006.
5.1 Survey background
The target group of this survey was the users of the Accra-Tema Motorway. Accra is
the capital of Ghana and Tema is the country’s industrial hub and one of two harbour
cities in the country. This toll road was selected because it is currently the only
motorway in the country and has the required features that make it suitable for a
typical concession scheme. This 20-kilometre dual-carriage has Portland cement
concrete surfacing and daily traffic in excess of the required 15,000 vehicles threshold
for typical BOT concession projects.
The purpose of the survey was to inform road users about a set of road tolling policies
designed to improve road transport operations and help refinancing of highways in
Ghana, and to estimate respondent support for those policies. After receiving some
information about these policies, respondents were polled on whether they would
support a tolling scheme that will require them ‘to pay more for better roads’. The
subject of the survey was public support for improved toll road operations in Ghana.
The specific objectives of the survey were the following:
• Assessment of level of public satisfaction with existing tolling operations,
• Public expectations from government and toll road operators,
• Public willingness-to-pay higher tolls and
• Public recommendations for improved road transport service delivery
53
The survey intends to achieve two important goals; firstly, the Ghana Road Fund
Board can use the results of this survey to plan an information campaign to increase
awareness of and support for tolling, and secondly the results can also be used to
better inform and shape road tolling policies in Ghana by addressing road users
concerns.
5.2 Survey description
The survey target group was private car drivers resident in Tema who use the Accra-
Tema Motorway. The survey sample was a stratified random sample of adults above
18 years. Adults who own or use private cars but do not use the Accra-Tema
Motorway were screened out. The excluded drivers might be expected to be more
supportive of any tolling policy, as they will not be paying into the system. The
survey initially included the public transport drivers. However, taxi and trotro (mini
bus) drivers contacted preferred presenting a common opinion through their “Station
Masters”. Their views will therefore be discussed under Survey Results but will not
be analysed statistically.
The interviews were conducted with the assistance of four students from the
University of Ghana. Respondents were selected and contacted at random in their
homes and at various car parks. The questionnaires were uncomplicated and required
straight forward answers. The average survey length was 15 minutes.
There were a total of 23 questions in the survey and a total of 115 completed
interviews. The survey was conducted in the English language but some respondents
gave answers to some questions in a local Ghanaian language (Twi). All the
interviewers speak perfect Twi and therefore had no difficulties explaining questions
in the Twi language so as to get the required responses. Furthermore, many
Ghanaians speak Twi, especially those living along the middle and southern belt of
the country. Some interviews were refused, but the cooperation rate7 was
approximately 90%. The high cooperation rate was perhaps due to the fact that
respondents were interviewed under a relaxed atmosphere of their homes or at their
workplaces. Generally respondents were willing to be interviewed; it appeared many
of the respondents saw the interview as a special opportunity to express their opinion
on an important national issue. Transportation is a very important subject for residents
of Tema, especially for workers who travel in and out each day to work in Accra
7 Cooperation rate is defined as the quotient of total completed interviews and the total viable contacts
that qualify as respondents.
54
using the country’s only motorway. Actually, for most residents of Tema who work in
Accra, there is no viable alternative route to the motorway. The existing alternatives,
“Beach Road” and “Spintex Road”, are single carriageways, which are often
congested especially during the morning and afternoon peaks.
There were few instances of item non-response. The items with the highest non-
response rate were time-savings using motorway compared with the alternative routes
and household income. Though most respondents believe they make significant
saving by using the motorway, only 45% could easily estimate their average travel
times on the motorway and on other alternative routes. Again, 19% of respondents
were unable to provide information relating to their household income. There appear
to be two classes of people in this group. One group consists of people who were
perhaps not willing to provide any income related information because they felt it was
very personal. The other group consist of people who worked in the informal sector
and by the nature of their jobs it is difficult to estimate a monthly household income.
The survey questionnaire consisted of three main parts. The first part elicited from
respondents standard demographic information: age, gender, household size, car
ownership, employment status and income. However, income was the last question
asked in the survey because of the very personal nature of it. The second part of the
survey asked fairly detailed questions about the respondents travel behaviour such as
trip purpose, frequency of travel, travel mode, use of toll roads and existence of
alternative routes. Both demographic and respondents travel characteristics were to be
useful in estimating respondents’ toll payment obligations and also explaining the
observed voting patterns elicited by the survey.
The final set of questions, drew from respondents their opinion on issues such as road
congestion, road safety, toll evasion, preferred toll management and financing options
and willingness to pay.
5.3 Survey results
The issue of public perception of existing level of tolls is very crucial for correctly
assessing users support for a new policy that will require toll rate increases. Most
respondents (85%) think current toll levels are “just ok” compared with 13% who
believe existing toll rates are either “high” or “too high”. On the contrary, transport
administrators interviewed claim existing toll rates are very low because there have
55
not been any increases since 1997 even though consumer price index has increased by
more than 130%.
In order to measure willingness to pay higher tolls, respondents were asked to state
the highest toll they were willing to pay. To ensure a common understanding,
respondents were made to select the toll rate beyond which they are more likely to
consider using a public transport or a non-tolled alternative route to their destinations.
Since respondents were not assured of any improvement on the existing road as a
precondition for toll increases, the stated tolls represent the highest tolls users wish to
pay taking into account the existing level of service of the road. Only 22% of
respondents were more likely to change to public transport or use an alternative non-
toll route should there be any increases in current toll rate. At least 60% were more
likely to accept up to 100% increases in existing toll rate and approximately 6% could
afford 10 times current rates. It was also observed that respondents who initially said
existing rates were either “low” or “very low” were willing to pay at least twice the
current rates. Finally, 21% of those who think existing toll were “just ok” to “very
high” were less likely to accept higher tolls.
Students and the unemployed, perhaps because of their low economic status, appear
less likely to accept any toll increases. About a third in these groups was also less
likely to support any toll increases and may consider changing travel mode or route
should there be any increases in tolls. Again, people who use the motorway to get to
their work places were more likely to accept toll increases. This is because they are
likely to value getting to work on time than those visiting or shopping. There was no
clear correlation between household size and willingness to pay. It could be expected
that users with bigger household sizes already have high expenditure and may be less
willing to spend more on transport.
Furthermore, 44% of respondents did not have alternative routes to their
destinations. There were no significant differences in support for toll increases
between users with alternative routes and those without alternatives routes. It is more
likely that because they have no other option, apart from travelling by public
transport, users without alternative routes to their destinations will more likely accept
future toll increases. Considering the fact that these alternative routes are often
congested during peak hours, they will be less likely options for workers – who may
value getting to work on time. About 80% of all respondents claim they save between
50% to over 100% of their time by using the motorway.
More than half of the respondents spend between ⊄200 000 (US$22) and ⊄1million
(US$110) on vehicle maintenance. This excludes the cost of fuel and other operating
costs. Moreover, approximately 15% of households spend over US$220 on vehicle
56
maintenance. The average monthly spending on vehicle maintenance for all
respondents is ⊄ 750 000 (US$82). Considering the fact that 80% of all households
have only one vehicle, this monthly spending can be taken as the average maintenance
spending per vehicle. These levels of household spending on vehicle maintenance,
though high for a developing country, is not surprising since most vehicles on
Ghanaian roads are “used” or “second hand” vehicles imported mainly from Western
European countries. As can be expected, these used and often over-age vehicles easily
breakdown and require frequent replacement of parts. Due to high custom duties,
costs of vehicle spare parts in Ghana are high.
Support for higher tolls appears less correlated with income and trip frequency.
Nearly 65% of all respondents were frequent toll road users (that is, they make at least
three return trips per week). It was also observed that employees undertake more trips
than other socio-economic groups. Over 60% of employees make at least three return
trips per week using the motorway. This also implies that employees have the highest
toll payment obligations compared with other users. Current tariff system does not
provide any discounts for frequent toll road users. Support for toll policies are more
likely to increase among employees and local residents (who are frequent users of the
toll road) should there be a discount policy that significantly reduce their weekly or
monthly toll payment obligations. Many respondents have recommended for the
implementation of a discounted weekly or monthly motorway pass or some forms of
discount policies or exemptions for those living along toll roads as they are less able
to avoid the use of the toll road.
Again, in order to indirectly measure users support for any future road concession
scheme, which would obviously require payment of tolls higher than what is currently
been charged, respondents were asked to suggest how highways in the country
should be financed. Approximately 70% believe the cost of highways should be
finance using toll revenues. About 14% agree to the use of Consolidated Funds and
another 6% of respondents support financing highways with fuel taxes. Only 3%
favour highway financing using donor funds. Some respondents support the use of
revenues from toll roads to finance the maintenance of those roads. Many of those
who oppose the concept of tolling, in its entirety, appear to do so because the revenues
collected are not reinvested on those roads. They claim the Accra-Tema Motorway,
for example, since it construction in the mid 1960s has not seen any major
improvement though tolls have been collected from users over these years. Workers,
both employees and self-employed, and frequent toll road users were more likely to
support tolls as a source of highway financing, because they appear to benefit most
from the quality of service of existing toll roads.
57
Asked to choose between toll management using the public and the public/private
partnership, 49% of respondent support a public management system compared with
40% in support of a public/private partnership. 12% had no preference for either
management systems. Support for public management system was high among older
individuals (40-60years), students and the unemployed. If respondents had been
informed about recent increase in toll revenue collection due to private sector
participation, support for partnership was more likely to be higher. The generally high
support for public management system is perhaps because many respondents
perceived private sector participation to be synonymous with toll rate increases.
The type of highway to toll is another important issue respondents were made to state
their preferences. Overall, 50% agree that drivers should pay tolls on both existing
and new highways with 26% supporting tolling of new highways only. Approximately
23% were more likely to support tolling of existing roads only. Employees and users
who save more time using toll roads were more likely to support tolling of existing
roads only. All respondents appear to support one form of tolling or another.
Another issue of great concern to respondents was the high level of road accidents on
the Accra –Tema tolled motorway. There was consensus on the causes of accidents on
the motorway. Approximately 78% of respondents believe driver behaviour is to
blame for most accidents on the motorway. These driver behaviours, which often lead
to road accidents, include careless overtaking, over speeding and drink driving. Other
causes of accidents on the motorway relate to vehicle condition (14%), road condition
(6%) and road environment e.g. poor lightening (2%).
To address government concerns on the use of unauthorised routes along the 20-km
motorway, respondents were polled to suggest reasons for this phenomenon.
Respondents appear fairly divided on the possible reasons; traffic avoidance 28%,
driver indiscipline 20%, and “shortcut” 29%. Considering the fact that the motorway
has no bypasses, drivers looking for shortcut route to their residence or workplaces
along the toll road are more likely to use unauthorised routes.
Another issue of concern among respondents was congestion on the motorway
especially during the morning and evening peak periods. Most respondents (49%)
think increasing the number of booth at the plazas will more likely control congestion
on the motorways. 35% support the use of electronic tolling as a more effective
congestion control measure. Another 19% believe congestion can be more likely
controlled if users are charged higher peak hour tolls.
58
5.4 Conclusions from survey results
There is common understanding on the important issues that affect the performance of
road tolling among residents of Accra and Tema. The results show that road users are
more likely to support tolling of both existing and new roads, higher tolls, and public
management of toll roads and financing of highways using toll revenues. It is also
anticipated that implementation of road concession scheme would address existing
problems relating to urban congestion, and road safety.
59
6 INTERNATIONAL EXPERIENCE: ROAD CONCESSION IN
SOUTH AFRICA
6.1 Background
6.1.1 Institutional framework and road network
The South African National Roads Agency Limited (NRA) is an independent,
statutory company responsible for the development, maintenance and management of
South Africa's 7,000 km national road network comprising over R30 billion in assets,
excluding land (NRA, 2005). The South African Government is the sole shareholder
and owner of the Agency.
The planning, construction and maintenance of roads and bridges, other than those
falling under the NRA or local governments, is the responsibility of the provincial
governments. The figure below shows the entire road network size in South Africa.
Only national roads and some provincial roads are currently suitable for tolling.
Figure 10 South Africa toll and non-toll road network size
Source: Alli, N. (1999). The South Africa Model for State and Private Toll Roads. A
PowerPoint presentation at the Annual Road Management Seminar: Innovative
Maintenance Contracting Practices. World Bank, Washington, D.C.
60
Figure 11 Primary road network and responsible agencies
Source: Alli, N. (1999)
Due to poor funding allocation, about 38% of provincial and 17% of national roads
are assessed as being in poor or very poor condition. This situation has resulted in
substantial backlog of both road maintenance and rehabilitation and about half (the
non-tolled) network older than its design life. The existing backlog of maintenance
would require between R25 (US$4.2) and R35 (US$5.8) billion to clear (DOT, n.d.).
Apart from funding inadequacy, the current high share of network in poor condition is
also the result of abnormal spatial development pattern from apartheid policies.
6.1.2 Financing national roads
The budget of the NRA is derived from various sources. These include levies on
petrol and distillate fuels, loans granted to or raised by NRA, income from tolls
charged, income earned in terms of joint ventures, fines and penalties. The main
source of funding for non-toll national roads is the annual national budget, which is
allocated by the National Treasury but must be approved by Parliament. Unlike the
current trend in many developing countries, the South African constitution prohibits
revenue earmarking (i.e. devoting certain revenue to be spent on specific sectors of
the economy). All road fund revenues go directly to the National Treasury, which is
then distributed among the different economic sectors. The road fund budget is used
for the following purposes:
• Routine, periodic and special maintenance and provision of support to increase
road safety, and
Blue = National Road Agency
Red = Provincial
61
• Improvement of the network, rehabilitation and reconstruction, upgrading and
provision of new facilities.
Current annual expenditure on road maintenance is only R4.6 billion, though NRA
estimates an amount of R11 billion as required annual road maintenance expenditure
to keep the network in good condition (DOT, n.p.).
6.1.3 Why South Africa opted for road tolling
Road tolling in South Africa started as far back as the 1700’s when the then governor
of the Cape Colony collected tolls to effect repairs to the roads. Tolls were also levied
on roads in the former provinces of Natal and Orange Free State up to the end of the
19th century. The first modern toll road was established in 1983 in the Tsitsikamma
province (NRA, n.d.).
The South Africa National Road Agency outlines the following as its primary
objectives of introducing road tolling (Alli, 1999, p.12):
Reduce government role in the economy: this is in line with South Africa government
policy of increasing private sector involvement in the economy and for the
government to focus more on the establishment and maintenance of the needed
institutional and regulatory frameworks for private sector activities.
Mobilizing needed private sector finance: road concessioning has enabled the
government to fund more projects outside it own financial resources. By relying on
loans from private financial institutions or designing completely non-recourse project
financing schemes, the NRA has been able to finance about 20% of the national road
network through the private sector. About 90% of private finance come from domestic
sources.
Allow off-balance sheet financing for government: with road concessioning, NRA is
now able to undertake expensive road construction project off-balance sheet. By
financing some toll roads ‘off balance sheet’, the NRA can avoid showing the debt
borrowings for the project on its books and hence avoid breaching any borrowing
covenants. According to Clifford Chance (1991) and Nevitt (1995) by developing a
project off-balance sheet, government also preserve its borrowing capacity for other
projects, which cannot be developed on a stand-alone basis.
Foster innovation: competition among difference toll companies to win toll contracts
foster innovation in tolling technology, financing options and management of toll
facilities.
62
Finally, full concessioning allow for optimum apportionment of risks. Road
concession ensures an efficient risk allocation. Through the concession design,
government is able to allocate to the private sector those risks the private sector is best
able to manage. In a well-planned road concession scheme, specific risks are allocated
to parties best able to manage them. For example, it is common for government to
take care of political, traffic and construction risks while the private sector manages
financing risk.
To illustrate the distinguishing features of concession projects, Table 20 makes a
comparison between concessions and conventional (state) financed schemes.
63
Table 25 Comparison between concession and conventional schemes
Item Concession Conventional
Speed Fast, but may require many
initial inputs from designers for
tender purposes, particularly if
the road design is poorly
defined.
Slower, but can lead to a better
quality of design as all options can be
investigated more thoroughly in
stages.
Public
Acceptance Difficult, particularly where
local communities are affected.
Funds are normally available to
address issues optimally.
Less user resistance but still
problematical where property issues
and noise are concerned. May not
have adequate funds to address all
issues optimally.
Cost Apparently more expensive than
government funding in view of
risk transfer to Concessionaire,
but generally lower quality
construction. If risks are too
great then financing will be
difficult.
Can become expensive if client does
not have appropriate standards that
are well controlled. Meaningful cost
comparisons can only be made by
means of a public sector comparator
where value for money and risk
pricing are some of the important
determinants.
Maintenance Very good transfer of
maintenance obligations to an
effective team. Need well-
structured and clear
maintenance specification, but
funding constraints should not
be an issue.
Maintenance quality depends on types
of maintenance contractual models as
well as the capability and motivation
of public sector, and above all,
availability of funding.
Construction Few controls and self-approvals
can result in poor quality IA and
Concessionaire can play a key
role in ensuring quality.
Good quality provided contract
documentation and contracting
environment is well managed and
controlled.
Expansion Able to plan for expansion and
improvements in an
environment of definitive
funding.
All funding and future expansions are
planned in an uncertain environment
leading to planning inefficiencies or
deferred maintenance and network
deterioration.
Source: Alexander, P., Burger D., Esterhuysen, G., Smit, J., and Taute, A., (2004). Cost and
Quality Issues in Road Concession Contracts. A paper presented at the 8th
Conference on Asphalt Pavement in South Africa. Sun City, North West Province,
South Africa.
64
6.2 Available toll road financing mechanisms
Three main types of ownership options are identified in South Africa, namely; state,
partial and full concessions. The classification is based on the extent of government
support required to carry out the toll project. The existing toll network consisting of
both state and concession toll roads is shown in Figure 12.
Figure 12 State and concession road network
Source: NRA, (2005b). Declaration of Intent 2005-2008. South African National Roads
Agency, Pretoria, South Africa.
6.2.1 State financing
Under this option, government provides financing for the project implementation from
its own resources or borrows money from the private sector. All risks (both project
and financing) accrue to government. This option is used when either traffic levels are
not high enough to attract private sector participation, private sector is less developed
or do not have the needed resources for such long term investments. State road tolling
may also be employed when country (political, economic) conditions are not
attractive for both local and foreign investors.
The sources of funding for South Africa state toll road construction, maintenance and
operation are long-term debt, short-term debt and soft loans.
65
1. Long-term debt (from capital market): the capital market is the market for
securities, where companies and governments can raise long-term funds. The
capital market includes the stock market and the bond market. It consists of
the primary market, where new issues are distributed to investors, and the
secondary market, where existing securities are traded.
2. Short-term debt is obtained from the money and secondary markets. As shown
in Figure 13, secondary loans are a major and increasing source of funding for
state toll projects in South Africa.
All funding for toll roads has come from the domestic market (Alli, n.d.)
Figure 13 Sources of funds for state toll roads
Source NRA, (2005b). Declaration of Intent 2005-2008. South African National Roads
Agency, Pretoria, South Africa.
The South African government in 2000/2001 approved a loan guarantee of up
to R6 billion on behalf of NRA. This meant that NRA could borrow up to this
amount from the capital and money markets for the sole purpose of financing
toll roads in South Africa. With existing interest rate at 8%, it is estimated that
the Agency will require loan guarantees of about R10 billion by 2019 (NRA,
2004). As of March 2005, about R5.7 billion of government guarantee has
been utilised. The long-term objective of the government is to limit state
guarantee for state financed toll roads to R10 billion. Considering the
increasing funding requirement for toll road development and financing, the
Agency will have to find ways of obtaining additional sources of funds or
pursue other financing schemes which will require limited state guarantee.
3. The third source of funding for state toll roads is the road fund debt. This
revenue comes from fuel tax.
66
6.2.2 Partial concessioning
Here private sector debt is employed for the project financing. The “concessionaire”
shares the risk with government. Risk sharing is negotiated between the parties, but
the private sector typically bears the design, construction and maintenance risks. This
option is most suitable when:
• there is less public support for completely private ownership of road
infrastructure
• government requires private sector debt to fund road infrastructure, whiles
public sector still maintain ownership
• government wants to share project risks with private sector, by allowing the
private sector to carry those risks it can best manage
6.2.3 Full concessioning
In full concessioning, a private sector entity is granted a concession by a
governmental entity to design, build, and/or operate transport services or
infrastructure for a specified period. The concessionaire is typically responsible for
raising the finances required to carry out the project. At the end of the concession
period, the facilities and their operation may be transferred to the host government,
depending on the nature of the contract. The concessionaire will typically take care of
forming a Special Purpose Project Company, also called Special Purpose Vehicle
(SPV).
The SPV usually consists of the consortium shareholders who may be investors or
have other interests in the project (such as contractor or operator). The SPV is created
as an independent legal entity, which enters into contractual agreements with a
number of other parties in a project finance deal. A typical project finance structure is
shown by Figure 14.
67
Figure 14 Special purpose vehicle
Source: Roth, G. (1996). Roads in a Market Economy. Hants, England: Avebury.
A typical special purpose vehicle for a toll road project will include the following
major interest groups (Estache and Strong, 2002):
1. Host government: except in the case of unsolicited bid, it is usually the
government who identifies the need for provision of certain road
infrastructure, prepares the needed feasibility studies and approach the private
sector for funding of the project.
2. Concessionaire: he obtains a right to build, finance and operate a particular
road infrastructure. It will be the responsibility of the project sponsors to form
a SPV to act as the concessionaire. The relationship between the sponsors
needs to be clearly defined and will usually be set out in a shareholders’
agreement. The SPV might have other equity investors, such as development
finance institutions or the government. “The SPV will be capitalized by the
sponsors in agreed proportions, normally on the terms set out in an agreement
that deals not only with the sponsors' initial capital investments but also with
any further obligations with respect to future contribution obligations”.8
8 These may be supported by guarantees of parent or affiliated companies of the sponsors.
68
3. Lending banks: most project finance funding to date has been in the form of
commercial debt. The percentage of the anticipated project cost that
commercial banks will be prepared to lend will vary depending on such issues
as the size and sector of the project, the projections and sources of project
revenues, and the banks’ evaluation of the other risks of the project. The banks
usually lend directly to the SPV (Estache and Strong, 2002). Before extending
finance for projects, the economic feasibility and financial viability of the
project in relation to the macro economic conditions prevailing at the time of
conceptualisation of the project and also the likely scenario that may prevail
during the normal life span of the project is established. The project should be
able to withstand reasonable levels of variation in crucial parameters, which
should be established by sensitivity analysis of the cash flows.
Currently, the NRA has implemented three (3) full concession road projects. The
Agency is now in the process of preparing six (6) additional projects to be
implemented by 2008 (see Table 26).
Table 26 Existing and planned concession toll roads in South Africa, 2004-2008
Project Status Length Capex
N3 Cedara-Heidelberg Underway 420 km R 2200 m
N4 Witbank-Maputo Underway 350 km
N4 Platinum Underway 124 km
N1 Huguenot Tunnel – Second bore Planned R 550m
N1 South and R30 Welkom- Bloemfontein Planned 196 km R 444m
N2 Tsitsikamma Extension Planned 14 km R 199m
N3 Pieternaritzburg to Durban Planned 85 km R 881m
N17 East Toll Road Extension Planned 180 km R 629m
Guateng Network Planned 329 km R 4 565m
N2 Knysna Toll Highway Planned 23 km R 519m
Various bridges Planned R 900m
Source: NRA, (2005). Annual Report 2004/2005. South African National Roads Agency, Pretoria,
South Africa. p.24. Exchange rate US$ 1.0 = R 6.0
6.3 Unsolicited bidding process
Many countries do not have any policy for considering unsolicited bids. Nevertheless,
it is important to have proper procedures in place for handling such bids and reach
fast, objective decisions on them. In order to take advantage of private sector funding,
innovation, efficiency and skills (NRA, 2005, p.30), the South Africa government, in
69
addition to its existing conventional tendering process, has introduced a policy on
unsolicited bidding. This policy allows the private sector to propose potentially viable
road concession projects for the road agency’s consideration.
The procedures of the South African National Road Agency (SANRA) in respect of
unsolicited bids are follows (PWC, March 2004):
• The concessionaire identifies a road and assesses its suitability for a particular
private sector participation (PSP) option.
• The concessionaire prepares a proposal and submits to SANRA agency for
consideration.
• SANRA is under no obligation to accept the proposal, and is not responsible
for its initial costs.
• If SANRA is interested in the proposal, the sponsor (or the concessionaire)
will be designated the Scheme Developer. This is announced publicly.
• There will be a Scheme Developer Agreement between SANRA and the
sponsor covering the scope of work, rights and responsibility of both parties,
liabilities for costs and budgets up to the tender stage.
• SANRA is allowed to seek third party advice at its own cost whilst the scheme
is being developed. The sponsor becomes liable for these costs only if he fails
to complete the Scheme Development work
• The Scheme must be accepted by SANRA before it can proceed to the tender
stage.
• The tender documents will normally be prepared by the sponsor
• The sponsor will be allowed to bid, but will not be given any preference in the
evaluation of bids.
• Best and final bids will be invited from the two preferred bidders, plus the
sponsor if he is not one of them.
• The sponsor will not be involved in the evaluation of bids, and will not be
given access to information in any of the competing bids
• SANRA is under no obligation to award the contract to the original project
sponsor
• If the sponsor is unsuccessful, Scheme Development costs (up to the budget)
will be reimbursed by the successful tenderer
• If the project is aborted at any stage, the Scheme Development costs up to the
budget will be reimbursed by SANRAL
The following proposed concession projects have been developed through the
unsolicited bidding process.
70
Table 27 Proposed concession projects from unsolicited bids
Proposed concession projects Costs (US$´ million)
The N1/N2 Windlands Toll Highway (142km) 983
The N2 Wild Coast Toll Highway (540km) 1 217
R300 Cape Town Ring Road (68km) 1 133
Source NRA (2005, p.30). Declaration of Intent 2005-2008. South African National Roads
Agency, Pretoria, South Africa.
6.4 Evaluation of toll road projects
Traffic demand is the most important factor influencing the decision to toll a road or
not. When proposed toll roads do not have sufficient traffic volume to ensure they are
self-financing or financially viable, options have to be developed to take care of the
financing deficits. Most South African toll roads under state or partial concession
arrangement are not self-financing. This is because volumes of traffic and/or toll rates
are not sufficient to cover required costs.
The approach that is used in assessing the financial viability of these roads for tolling
is called “the loans supportable by revenues” concept. This concept is currently used
in respect of state toll roads. The loan supportable by revenue (LSR) is the present
value of the amount of loans that can be serviced and redeemed over the selected
evaluation period at a selected interest rate. The approach involves the estimation of
present value of toll revenue from the proposed toll rate and the expected traffic level
on the toll road. The net revenue is determined by subtracting estimated operation and
maintenance costs. The LSR, in the case of state toll roads, is determined by
discounting the predicted net toll revenue of a project to present worth at a 4% per
annum interest rate for a 20- or 30-year evaluation period.
“The net revenues are then used to float revenue bonds on the domestic capital
market. The difference, if any, between the initial capital costs of the toll road and the
value of these revenue bonds, is then provided by government in the form of a soft
loan from the Treasury” (Heggie, 1998). The LSR concept, simply asks the question,
how much loan can be supported by future revenue? By the definition of the LSR
concept, a project that is viable may not necessary be self-financing. For a project to
be self-financing, the LSR should be greater than the initial net capital cost.
To summarise the LSR concept,
• Estimate the annual toll revenue during the life of the project
• Determine the net annual toll revenue by subtracting the operation and
maintenance costs from annual revenue
71
• Determine the NPV of the toll revenue over the project life
• Estimate the initial net capital cost of the project
• The LSR is then the difference between NPV of the toll revenue and the
project’s initial net capital costs (ICC).
What happens if the project is not self-financing, or in other words, what if the LSR is
less than ICC? The government has to consider other sources of funding to take care
of the deficit. The existing policy on tolling in South Africa allows for supplementary
funding from the national road fund in the form of long-term loans. Since the
inception of road tolling in South Africa road fund loans have contributed up to about
50% of toll road financing
6.5 The N3TC toll project
This section presents a case study on the performance of one of the South Africa’s
concession projects. It provides a brief overview of the nature of the concession, by
discussing the roles and responsibilities of the concession parties, challenges during
the first five years of the concession and some observed critical success factors. The
data and issues raised and discussed were obtained from interviews with officials of
NRA and N3TC in South Africa in August 2006. Apart from N3TC toll projects;
there are two other concession projects in South Africa. These are the Bakwena
(Platinum Corridor Concessionaire (Pty) Limited and the Trans Africa Concession
(Ivins, 2005).
6.5.1 The concession
N3 Toll Concession (N3TC) is a single purpose company, with many stakeholders,
which has entered into a concession agreement with NRA. The concession started in
1999 and is the first road concession project, which is privately financed and operated,
in South Africa. The agreement allowed N3TC to design, construct, finance, toll and
maintain the four-lane N3 Highway between Cedara, KwaZulu-Natal and Heidelberg,
Gauteng in South Africa. N3TC was required to construct and maintain a safe and
efficient world-class highway, suitable for all categories of road users, which will
provide benefits that exceed alternative routes. The economic objectives of the N3 toll
project are:
• to reduce the travelling time from KwaZulu Natal to Gauteng by one hour and
to ensure a faster, safer and efficient transport link between the country’s
economic hob, Gauteng, and the KwaZulu Natal province
72
• to de-congest the N3 and hence ensure free-flow of freight and passenger
traffic, and
• to reduce transport costs for freight and passengers. This will also lead to
reduction in cost of goods and services.
Figure 15 Map of N3 toll route
Source Ivins, T., (2005). The N3 Toll Concession: The 418km Challenge. A presentation at
IBTTA Transportation Summit, Nice, France.
This 30-year concession contract, involving 418km of N3 highway from Cedera to
Heidelberg (see Figure 15), allowed N3TC to design, construct, operate, maintain and
transfer the facility in a predefined condition to NRA after expiration of the
concession period. The N3 bears an annual freight of about 30 million tons, “from sea
level to 1600 m halfway along the route over the van Reenen Mountain pass” (Ivins,
2006, p.2).
6.5.2 Financing N3TC and current financial performance
At the inception of the N3TC project, the concessionaire was faced with the crucial
challenge of how to finance the concession. First, the concessionaire had to liquidate
73
an existing debt owed by the South African government with respect to the existing
highway. This debt had to be funded at the commencement of the concession. The
R1.38 billion (US$230 million) was equivalent to four and half times the annual toll
revenue at the project commencement. To meet this debt payment required, N3TC
was allowed to increase the initial toll rates by 29% at the commencement of the
concession (Ivins, 2004, p.4). Considering the fact that toll rate had previously not
been sufficient to redeem highway development debt, the next challenge for the N3TC
was how to win public support and ensure that at least existing traffic levels were
maintained despite the initial toll rate increase.
The initial construction works, expected to be completed between 30 to 36 months
and at a predefined standard, cost R500 million- an amount equivalent to about one
and a half annual revenue projection. Putting the projects initial debt, construction
cost and other financing cost obligations together, an initial capital requirement of R
2.2 billion was required to get the concession off the drawing board. This total capital
expenditure is equivalent to seven times the estimated annual revenue. Total project
debt amounting to R1.9 billion was raised on a limited recourse9 basis. This brought
the financing structure to 83% debt and 17% equity. N3TC then entered into various
agreements involving pavement design and construction at fixed priced contract for a
duration of 10 years. With the key adjudication criteria been toll rate, there was
pressure on all bidders to have the lowest toll rate.
What was N3TC financing strategy to mitigate the effects of the above financial
challenges? The company raised more than 60% of debt as inflation-linked bonds10
with favourably negotiated grace period (Ivins, 2004, p.7). The characteristic
advantage of the inflation-linked bond is that it allows for adjustment in toll rates and
other revenue parameters on the basis of the same consumer price index (CPI).
On the equity side, N3TC shareholders provided guarantees. The shareholders
include, Murray and Roberts Limited, Grinader Construction Limited, Kobi-
Infrastructure (Proprietary) Limited, Africon Infrastructure (Proprietary) Limited and
John Muller and Associates cc. According to N3TC, 20% of the equity came from the
institutional investors including the South African Infrastructure Fund, Old Mutual,
9 Unlike non-recourse project finance, limited-recourse project finance permits creditors and investors
some recourse to the sponsors. This could take the form of a pre-completion guarantee during a
project's construction period, or other assurances or some form of support for the project. Creditors and
investors, however, still depend on the success of the project as their primary source of repayment.
10 Inflation-linked bonds (also called linkers) are bonds whose principals are indexed to inflation,
hedging inflation risks
74
and Futuregrowth. The remainder came from loan commitments made by the Rand
Merchant Bank (Lead financial Arrangers for N3TC), the Development Bank of
Southern Africa, the BOE Bank Limited, the European Investment Bank and various
CPI-linked lenders.
In addition, established contracting companies held 40% of the equity in N3TC with
the remaining 40% held by various empowerment groups. In all, two types of
instruments were issued to serve the interest of N3TC’s shareholders. These were
Convertible Redeemable Unsecured Loan stock units (CRUL’s) and Subordinated
Convertible Debentures (SCD’s)11. The SCD’s constituted 15.2% of the equity
contribution.
The financial performance of N3TC over the past seven years of operation is
remarkable.
The Internal rate of return (IRR) was well in excess of forecast at financial close. The
IRR increased by 2.2% or 220 base points to bring the current real equity IRR to
15.6%
Debt Service12 and Loan Life Coverage Ratios (see Table 32) targets have largely
been met.
Table 28 Current and target ratios for coverage ratios
Coverage ratio Current ratio Target ratio
Debt Service Coverage Ratio (DSCR) 1.1 1.3
Loan Life Coverage Ratio (LLCR) 1.2 1.5
Source Ivins, T., (2005). The N3 Toll Concession: The 418km Challenge. A
presentation at IBTTA Transportation Summit, Nice, France.
Shareholder value: with higher traffic volume than initially anticipated and
corresponding increase in toll revenues, shareholder value increased three-folds
within five years; this development which encouraged shareholders to increase their
share holding within the period.
11 These forms of equity were utilised in order to make payments to shareholders earlier than would
have been possible under the normal dividend distribution process, due to the accumulated deficit,
resulting from the high early expenditure in the early years of the concession period (Ivins, 2005).
12 Debt Service coverage ratio is the ratio of net operating income to debt payments on a piece of
investment real estate. The higher this ratio is, the easier it is for a company to borrow more money
from it lenders. Loan Life Coverage Ratio, on the hand, is concerned with the vitality of the project for
the time period of the loan life.
75
Refinancing: the current financial performance of N3TC has positively enhanced its
credit rating. Within the past five years N3TC’s crediting rating increased from A- to
A. Project stability is however satisfactory for re-gearing thereby increasing the Debt:
Equity ratio to release cash to shareholders (Ivins, 2004, p.9).
6.5.3 Traffic growth and revenue
Traffic growth is key parameter for revenue generation. The concessionaires’ ability
to fulfil debt obligations and to increase shareholder value is based on the projects
ability to increase levels of traffic volume and corresponding revenue targets. N3TC
public support was at its lowest level when it had to increase existing toll rates by
29% finance the existing infrastructure. As could be expected, increase in toll rate
meant traffic attraction to the new toll road will be low.
Mitigation measures: in a move to address the concerns, and sometimes aggressive
attitudes of interest groups, and to increase public support for the project, the
company embarked on a massive education and awareness campaign. The first step
was to repackage and market the project benefits to the public. The education
involved informing the public that the benefits of the projects were worth the costs (or
the increase in toll rates). Secondly, because the project used an open system, a
measure that allows vehicles to enter or exit toll roads to non-toll roads without
having to pass through a tollgate, the second step was to reduce the possibilities of
traffic diversion. Other measures included improving the conditions of alternative, but
less economic routes and also reducing delays resulting from road accidents.
Traffic and revenue performance: evaluation of the project performance between
1999 and 2005 shows a more than expected traffic and revenue growth. Project
contract life revenue (R20.2 billion) is currently 21% higher than projection (24.4
billion) at financial close. The increase is attributed mainly to higher than expected
growth in traffic volume of heavy vehicles in the traffic mix. The proportion of heavy
vehicles in the traffic mix increased from 19% (1999) to 25% (2005). Currently 55%
of total revenue comes from heavy vehicles. This increase in contribution from heavy
vehicles is expected to be sustained for the entire project life. The attraction of N3
corridor traffic to the N3 toll road has improved from 88%, at the commencement of
the concession, to 94%. A 6% improvement meant additional revenue of R32 million
per annum (Ivins, 2004, p.8).
6.6 Perceived shortcomings in existing road concessioning schemes
Existing perceived inefficiencies with road concessioning in South Africa relate to
both scheme design and implementation. Public concerns have been raised on two
76
major aspects of road concessioning in the country, namely; unsolicited bidding
progress and the setting of tariffs.
6.6.1 Unsolicited bidding process
The existing tendering procedure in South Africa is competitive and notably free of
corruption. Few large firms dominate the construction sector.
The shortcoming in the unsolicited bidding process is that the process allows
oligopoly firms to form consortia and bid for almost all concession projects in
the country. These phenomena create the perception that these firms control
the entire national road assets. The high cost of preparing effective
counterproposals often excludes many smaller firms from the bidding process.
At the end of the day oligopoly firms win most of the projects, making the
process appear less competitive (Leiman, n.d., p.2).
6.6.2 Toll setting format
It has been argued that existing toll rates in South Africa do not accurately take into
account vehicles axle loading. Heavy vehicle pay proportionately less tolls compared
to motorcars. This implies that existing tariff structure makes lighter vehicles
subsidize heavy vehicles. Among the same class of vehicles there is no distinction
between fully loaded and empty running vehicles. No matter the extent of loading,
vehicles of the same class pay the same toll. It is believed that some truck companies,
in their bid to save on toll payments, simply overload their vehicles in order to make
fewer trips. There are currently no weighing bridges at the plazas so these overloading
cannot be detected. The South African National Road Agency, the governmental
institution responsible for the management of national roads and also for setting of toll
rates for all vehicle classes appear to be aware of this problem. Toll rates for heavy
vehicles have been purposefully sets low to encourage haulers to use the highways
instead of secondary roads. The Agency believes the cost of damage cause by heavy
vehicles using secondary roads far exceed the costs of cross-subsidies these vehicle
received. But the efficiency question here is whether light vehicle drivers ought to
bear the cost of these subsidies. One fundamental principle of road pricing is that road
users pay only the cost attributable to their use of the road infrastructure and not more
than that. If government for any reason decides to subsidize heavy vehicles, it is fair
for the government to bear these costs and not to shift it to other road users.
77
6.6.3 Open system
There is currently no electronic tolling in place in South Africa. Tolls are collected at
plazas located at various points along the toll roads. Because tolls are paid only when
a car crosses a tollbooth, drivers are able to divert onto a secondary road and can
avoid paying the tolls. The impacts of these are two folds. Apart from lose of revenue
to the toll companies; this phenomenon often leads to urban congestion. Another
problem is that these secondary roads are often not designed for heavy vehicles.
Plying heavy vehicles on these secondary roads can reduce the life span of these
roads. Until area tolling is implemented, traffic diversion will continue to be a major
constraint to road tolling this country.
6.7 Lessons
The major lessons from the review of the South Africa road concessioning experience
are:
1. Road concessioning schemes can be implemented in Africa, but the required
conditions must be met. South Africa has a well-developed financial market,
investor friendly business environment, experienced and well resourced world-
class construction industry, stable political climate and an efficient legal
system (PricewaterHouseCoopers, 2004, p.89).
2. Initial public opposition does not mean concession projects will not be
acceptable in the long run. Experience show that when users begin to realise
the benefits of toll roads e.g. time savings and reduction in vehicle operation
costs, their support for the scheme increases.
3. A workable legal framework is a necessary prerequisite for a successful
implementation of a road concession scheme. South Africa has a strong legal
system and a very transparent adjudication process which is a necessary
requirement for attracting private sector participation in financing long-term
assets such as road infrastructure.
78
7 PREPARING A ROAD CONCESSION SCHEME FOR GHANA
7.1 Possible organisational options
There are various ways of designing concession schemes. The main difference
between the schemes is the extent of private (and public) sector involvement. The
most widely used organisation options in road concessioning are discussed in this
section.
Build, Operate and Transfer (BOT): the main feature of this scheme is that the private
sector agrees to build the road, operate the facility and return it to the government at
the end of the agreed concession period – which is typically 30 years. The
concessionaire carries not only traffic risks but also financing risks. The scheme is the
most popular in the infrastructure-financing world, as it offers government the
opportunity to develop expensive road projects off-balance sheet. Typically, the
concessionaire will be responsible for arranging financing for the project, the initial
construction of the facility, and collection of the revenue and take care of operation
and maintenance of the facility until the end of the project life.
Rehabilitate, Operate and Transfer (ROT): this is similar to BOT. Here the
concessionaire enters into an agreement with the host government to finance the
rehabilitation of an existing road, toll the facility and return it to the government at the
end of the concession period. The concessionaire carries all project risks.
Maintain, Operate and Transfer (MOT): under this option, the concessionaire enters
into an agreement with the host government to finance the maintenance (usually
routine and periodic), toll the facility and return it to the government at the end of the
contract period.
Turnkey: in highway development, turnkey involves the government entering into
contractual agreement with the private sector for the provision of a highway facility.
The private sector is usually responsible for the design and construction (with
associated risks) of the highway. The private sector must arrange financing on it own.
Once the construction is completed the road is handed over to the government. The
government then makes an agreed lump-sum payment to the private sector. The public
sector bears the planning and traffic risks. Under turnkey, it is possible to have a
follow-up agreement that allows the private sector to provide other services like
testing, training and logistical support necessary for efficient operation of the facility.
At the end of the construction period and facility handover, the turnkey contract may
be extended (also called turnkey plus) to include management contract. This will often
79
occur when government is satisfied with the performance of the private sector and if
the private sector is still interested in the project.
Maintenance management contracts (MMC): this contract scheme involves the
concessionaire taking over the maintenance management of a state toll road for a
given period. Here, the government is still responsible for ownership and investment
decisions.
Corridor management: is a concession process “that applies access management
principles to highway corridors in an attempt to balance the competing needs of traffic
service, safety, and support for land development” (CTRE, 2004, p.1). The primary
objectives of corridor management are to ensure mobility and safety of highways. A
typical corridor management scheme includes the following measures (CTRE, 2004,
p.2):
• The location and spacing of interchanges with other public roadways
• The location and spacing of at-grade intersections with other public roadways,
including traffic signals and other traffic control devices
• The location and configuration of medians and median breaks
• The location and spacing of private driveways
• Alternative access ways, such as frontage and backage roads
• The location and design of dedicated left and right turning lanes
• Coordination of the transportation facility with surrounding land development,
land use planning, zoning, and internal traffic circulation system
Corridor management aims at striking efficient balance between access management
on the one hand and mobility and safety on the other hand.
After identifying the various PSP options the next step is to access the suitability of
each of the options. Common features of various private sector participation options
are shown in Table 29 below.
80
Table 29 Possible organisation options
Features MMC Turnkey MOT ROT BOT Corridor Management
Definition Maintain Design and build Maintain and operate Finance, rehabilitate,
and operate Finance, design,
construct & operate Finance, design,
construct, maintain,
operate
Direct cost
recovery from
users
No.
Payment from
govt. to operator
No
Fixed payment from
govt. to operator
Some degree of toll
sharing with govt. Concessionaire may pay
govt. or vice versa Govt. investment
usually required.
Ex-post subsidies not
uncommon
Govt. contributes
existing roads and other
investment usually
required
Scale of private
investment Very low Considerable for very
short term Low Medium High Medium /high
Private sector
risks Maintenance Design
Construction Traffic and revenue levels
Political
Financial
Rehabilitation
Traffic and revenue
levels
Political
Financial
Design
Construction
Traffic and revenue
Levels
Political
Financial
Design
Construction
Traffic and revenue
Levels
Political
Financial
Public sector risks Design
Construction
Traffic and
revenue levels
Planning
Traffic and revenue
levels
Revenue
Macro
Some regulatory
Force Majeure
Some regulatory Planning
Macro
Some regulatory
Planning
Force majeure
Macro
Some regulatory
Typical contract
size ($) Small Medium/high
US$50-$800m Small/medium Medium/high Very large
US$100m-$1b Medium/large
US$90-$300m
Typical traffic
volume (ADT) <1 500 2 500 – 6 500 6 500 – 15 000 >15 000
Minimum size
concession
required
Small/local
construction firm Small/local
construction
firm
Construction firm with
management skills Large construction firm
with management skills Consortium including
major construction firms Consortium often with
construction firms
Typical duration 2-10 years Defined construction 2-10 years 10-20 years 30years 30years
Source World Bank Institute (2000). Privatization and Regulation of Transport Infrastructure: Guidelines for Policymakers and Regulators. World Bank,
Washington D.C.
81
7.2 Potential concession projects
The following traffic levels have been recommended for undertaking the respective schemes
(Kerali, 2002):
BOT schemes: ADT of 15 000 and above
ROT schemes: 6 500 < ADT < 15 000
MOT schemes: 2 500 < ADT < 6 500
Toll Collection Only: ADT > 1 500
The Ghana Highway Authority acting through its Planning Division undertook a desk study,
mobilized and conducted a field survey of traffic counts at thirteen (13) bridge and road toll
sites. It intended to assess their suitability for privatisation (including various schemes like
BOT, ROT and MOT) by considering revenue that could be expected from these toll sites.
The traffic survey was also aimed at assisting the Board in its decision to review monthly
remittances expected from the toll companies.
Table 30 Traffic survey on selected existing toll roads/bridges
No. Site Type Region ADT 2004 Remarks
1 Adiembra Bridge Ashanti 1 555 Adequate for tolling
2 Tabere Road Ashanti 4 486 ;;
3 Bechem Road Brong Ahafo 2 066 ;;
4 Kade Bridge Eastern 2 434 ;;
5 Adomi Bridge Eastern 4 015 ;;
6 Sogakape Bridge Volta 2 859 ;;
7 Asukawkaw Bridge Volta 57 Inadequate for tolling
8 Assin Praso Bridge Central 1 457 Adequate for tolling*
9 Ankobra Bridge Western 1 261 Adequate for tolling*
10 Jumoro Bridge Western 135 Inadequate for tolling
11 Aboaso Road Ashanti 4 789 Adequate for tolling
12 Kyeremfaso Road Ashanti 1 633 Adequate for tolling
13 Bamboi Bridge Northern 317 Inadequate for tolling
Source: GHA (2004, p.3). Report on Traffic Studies on the 13 No. Road /Bridge Sites for the Ghana
Road Fund. Ghana Highway Authority.
Note *These roads have been accepted for tolling though their traffic volumes fall below the 1,500
threshold recommended by Kerali.
Based on the cost road of construction and maintenance, a tolling rate of 5 US cents per km
for Light Vehicles and 12 US cents for Heavy Vehicles is considered minimum for the
operation of the various schemes. The Road Fund Board’s objective is to expand the current
toll road network. Taking into consideration the existing traffic levels, the following road
links are also been considered for tolling under various concession options.
82
Table 31 Selected roads for various tolling schemes
BOT
(ADT>15,000)
ROT
6,500<ADT<15,000
MOT
2,500<ADT<6,500
Tetteh Quarshie-Mallam
(ADT=27 000)
Mallam – Kasoa
(ADT=8 200)
Tema – Akosombo
(ADT=4 885)
Tetteh – Pantang
(ADT=25 000)
Konongo – Kumasi
(ADT=9 382)
Sunyani – Berekum
(ADT=5 084)
Achimota – Nsawam
(ADT=17 100)
Anwiankwanta – Kumasi
(ADT=4 321)
Source: MRT (January 2004, p.3)
In the case of BOT and ROT investments, road improvement financed by the private investor
might be required before concessioning can begin.
7.3 Road concession performance measurement criteria
The goal of the road administration or any road concessionaire is to ensure that toll roads
meet certain minimum standards that can guarantee the achievement of requirement revenue
targets.
In assessing the performance of toll projects some measurement tools are needed to verify
whether or not initial projection or assumptions underlining the design of the concession have
been fulfilled or achieved. Some of the key parameters include traffic volume, maintenance
and operation costs and financing.
This subsection identifies some indicators for measuring the performance of future concession
roads in Ghana. The key measurement parameters include concession profitability, debt
repayment and returns to stakeholders. The following concession performance indicators have
been identified and detailed descriptions of some of the indicators are provided in Table 32.
The benchmarks are obtained mainly from a review of South Africa toll projects and other
international road concession experiences.
• Working capital
• Debt service coverage
• Loan service coverage ratio
• Project life coverage ratio
• Internal rate of return
• Debt service projection
• Debt-equity ratio
• Debt-asset ratio
• Return on assets
• Return on equity
• Ratio of heavy and light weight
vehicles
• Extent of overloading
83
Table 32 Performance indicators for toll roads
Performance
Indicator Description Purpose Source Benchmark
(target)
Debt service
coverage ratio
(DSCR)
The ratio of pre-finance cash flow
after tax to the amount of interest
payment and principal repayment for
the period
To monitor the ability of project cash
flow to pay (annual) project debt
obligations
N3TC, South
Africa
1.3
Project life coverage
ratio (PLCR)
The ratio of the present value (PV) of
cash available for debt service over
the entire project lifetime to the
outstanding debt
To monitor the ability of the project
cash flow to pay it debt during the entire
project life
GREENTIE
(n.d.)
>1.5
Loan life coverage
ratio (LLCR)
The ratio of the present value (PV) of
cash available for debt service (during
the repayment period) to the
outstanding debt
To monitor the financial vitality of the
project for the time period of the loan
N3TC, South
Africa
1.5
Working capital
(WC)
The difference between a companies
current assets and short-term liability
To monitor a company’s efficiency i.e.
its ability to meet short-term debt
payment obligations
Chilean Toll
Roads
10%
Internal rate of
return (IRR)
The interest rate at which discounted
cash flows equal zero
To measure project financial viability
IRR>cost of capital project is viable
SANRAL,
South Africa
>15
84
Performance
Indicator Description Purpose Source Benchmark
(target)
Debt ratio The ratio of long term to short term
debt
To measure project’s short term debt
payment obligation in comparison to
long term debt
SANRAL,
South Africa
80% long term,
20% short term
Equity ratio The ratio of sponsor equity to non-
sponsor equity contribution to the
project
To measure the level of sponsor
commitment to project.This is an
important parameter for securing debt
SANRAL,
South Africa
40% sponsors,
60%non-sponsors
Debt-equity ratio A measure of a company's financial
leverage calculated by dividing long-
term debt by stockholder equity
To measure the volatility of project
revenue resulting from interest
payment.
SANRAL,
South Africa
80% debt,
20% equity
Private sector
investment index
Proportion of annual road expenditure
secured from the private sector
To monitor the attraction of private
sector investment
SANRAL,
South Africa
0.85
Return on
construction
expenditure
The weighted internal rate of return of
total construction expenditure per
annum
To monitor the predicted economic
benefits to the community from road
agency capital programmes
SANRAL,
South Africa
IRR> 15%
Expenditure
efficiency index
The percentage of annual expenditure
on overhead costs
To monitor the efficiency of road
agency
SANRAL,
South Africa
<5%
Asset preservation
index
The ratio between expenditure and
increase in pavement layer asset value
To monitor the efficiency of road
agency
SANRAL,
South Africa
85
Performance
Indicator Description Purpose Source Benchmark
(target)
User satisfaction
index
Index of users’ qualitative evaluation
of satisfaction with national road
network
To provide a qualitative indication of
users’ perception of the national road
network
SANRAL,
South Africa
Application of toll
income
How will toll revenues be allocated? For corporate financial planning
purposes.
SANRAL,
South Africa
70%debt service
30% operation &
maintenance
86
7.4 Sector and cross-sector policies in favour of highway concession
in Ghana
There are a numbers of sector and cross-sector issues that need to be addressed in road
transportation in Ghana. The observation is that though the responsibility of road
infrastructure provision lies with the Ministry of Roads and Transport, it is important
that other sectors which are directly or indirectly affected by the road provision are
not left out in road transport policy planning. These sectors include finance,
environment, works and housing, industry, tourism, local government and rural
development.
A good scenario demanding the need for an integrated approach to road transport
planning is illustrated by lessons from the poor performance of the Hungary
motorway projects. A review of the Hungary M1/M5 toll projects revealed that,
traffic flow and revenues did not meet projections for two main reasons. First, the
transport planners failed to access any possible correlation between spatial
development and demand for intercity trips. With increasing level of urbanisation,
goods and services were brought closer to the people, hence reducing demand for
intercity travels. Secondly, national road pricing policies could not be applied to those
motorways, which were later designated as European highways. All other relevant
sectors need to be consulted and their views considered in developing a sustainable
road concession policy.
Sector policies must also address the issue of integration of the different
transportation modes in the country. Example, with the proposal to build an inland
port in Kumasi (Ghana’s second largest city after Accra) and the laying of oil
pipelines from the Tema oil refinery to the Northern region, it would be important to
access how these developments could affect general traffic flow and traffic
redistribution within the country.
7.5 Reaching the urban poor with private road transport
infrastructure
The urban poor generally have low willingness- and ability-to-pay for road
infrastructure use. Considering the current economic situation of the country where
nearly 40% of the population live below the poverty line, charging optimal toll (that
which reflect the true cost of a trip) might exclude the urban poor from the use of road
infrastructure. To attract needed public support, especially among pro-poor rights
groups, it is important that the toll system be politically, socially and economically
‘fair’. The notion of fairness here concerns the need for government to ensure that in
87
its bid to inject private participation in infrastructure provision, the right of citizens’
access to basic infrastructure are not jeopardised.
There is therefore the need to strike a balance between equity (right of citizens to
access basic infrastructure) and efficiency (the need to recover cost). There are
various approaches through which government can meet this equity-efficiency
objective in its bid to carter for the urban poor.
One, government must ensure that existing non-tolled roads are kept in good
condition for use by those who might be tolled-off the toll roads. Pursuing such a
policy would leave both those tolled and those not tolled all better of. Two,
government could consider the policy of cross-subsidy to take care of the urban poor.
An approach to ensure that the poor really benefits from this policy would have to be
investigated and pursued. Since the urban poor mostly travel by mass public transport,
an approach would be for government to subsidise tolls for high-occupancy public
transports such as “trotro” and buses.
88
8 CONCLUSION AND RECOMMENDATIONS
Roads are indispensable catalysts for the socio-economic development of any country
since they provide citizens with needed access to social services and economic
opportunities. Despite these important functions roads play, the road sector in Ghana
still remains grossly under funded -resulting in a large share of road networks in poor
conditions. Under funding or deferred needed maintenance have severe future cost
implications. Failing to provide needed maintenance at the appropriate time generally
leads to expensive reconstruction costs. These additional costs are estimated to be
37% of the road network life cycle costs in Ghana.
This thesis has developed a cost-revenue model for assessing the extent to which
existing revenues from user charges cover the estimated life cycle costs of the road
network. Although road users’ contribution forms a significant source of road
budgets, they are still not sufficient to cover the expected total road costs. The current
funding constraints are partly due to under allocation of funds to the road sector.
Furthermore, only about one-half of what users contribute, in the form of road user
related charges, is actually allocated to the road sector. This implies that nearly one-
half of revenues generated from road user charges go to cross subsidize other sectors
of the economy. This disparity between user contributions and allocated domestic
funds lead to an underestimation of the extent to which road users are contributing to
the road sector or the national economy.
How can we ensure adequate funding for the road sector? This thesis has reviewed the
concept of road concessioning as a possible option of involving the private sector in
the financing of needed road investments in Ghana. The findings indicate that a
successful road concession scheme in Ghana will require public support, sound
economic management, strengthening of the existing legal framework and serious
measures to tackle corruption.
A public perception survey conducted as part of this thesis shows that there is
consensus among road users on the important issues that affect the performance of
road tolling in the country. The survey results show that road users are more likely to
support the following measures: (1) unconditional tolling of both existing and new
highways (2) charging of higher tolls on existing tolls roads (4) public management of
toll roads and (5) financing of highways using toll revenues. It is also anticipated that
implementation of road concession scheme would address issues relating to urban
congestion and road safety.
Traffic levels on most highways in Ghana are generally low, though some roads have
high enough traffic volume for a possible concession scheme. It is there recommended
89
that concessioning be done on project-by-project basis starting the high traffic roads.
Evaluation of selected highways in the country has identified some projects for
possible Build-Operate-Transfer (BOT), Rehabilitate-Operate-Transfer (ROT) and
Maintain-Operate-Transfer (MOT) concession schemes.
Overall, the focus of road transport infrastructure project financing in Ghana must not
just be aimed at getting investment costs off government shoulders, but rather seen as
a means of undertaking safe, efficient and competitive road projects and making road-
users accept the payment of economic prices for the services provided instead of the
tax payer. In the Ghanaian context, project finance makes a lot of sense because of
declining donor support coupled with government’s inability to generate and allocate
sufficient funds to meet the nation’s growing road infrastructure demand.
90
REFERENCES
Alexander, P., Burger D., Esterhuysen, G., Smit, J., and Taute, A.,. (2004). Cost and
Quality Issues in Road Concession Contracts. A paper presented at the 8th
Conference on Asphalt Pavement in South Africa. Sun City, North West Province,
South Africa.
Alli, N. (1999). The South Africa Model for State and Private Toll Roads. A PowerPoint
presentation at the Annual Road Management Seminar: Innovative Maintenance
Contracting Practices. World Bank, Washington, D.C.
CEPA, 2004. Pricing Petroleum Products in Ghana – The Automatic Pricing Formula.
Selected Economic Issues, No. 5. Centre for Policy Analysis, Accra-Ghana.
Retrieved on October 25, 2006 from
http://www.cepa.org.gh/archives/research-working-papers/2003/Issues-Paper-
Series-5.doc
Clifford Chance, (1991). Project Finance. London, UK.
CTRE (2004). Corridor Management Pilot Project. Center for Transportation Research
and Education, IOWA State University, USA.
DFR, (2004). Road Sector Development Programme Meeting with Development
Partners. A presentation by the Department of Feeder Roads in Accra, Ghana.
DOT (n.d.). Road Infrastructure Strategic Framework for South Africa. Retrieved
September 21, 2006 from: http://www.transport.gov.za/library/docs/rifsa/fund.html.
DVLA, (2005). Population of Vehicles Registered in Ghana by Category. Driver and
Vehicle Licensing Authority, Accra-Ghana. Retrieved on November 3, 2006 from:
http://www.mrt.gov.gh/statistics/DVLA/dvla_vlicence2005.pdf
Energy Ministry (2005). Petroleum Sector Reform. Ministry of Energy, Ghana.
Retrieved on June 10, 2006 from http://www.energymin.gov.gh/deregulation.htm
Estache, A. and Strong, J., (July 2000). The Rise, the Fall, and the Emerging Recovery
of Project Finance in Transport: World Bank Institute. Washington D.C.
European Commission, (2006). The EU-Africa Partnership on Infrastructure:
Transport. Retrieved on October 20, 2006 from:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52006DC0376:
DE:HTML
FEWS NET (Famine Early Warning Systems Network), (December 2004). FEWS
Angola Price and Market Situation Report Dec 2004. Retrieved on November 3,
91
2006 from:http://www.reliefweb.int/rw/RWB.NSF/db900SID/MHII-69P2YQ?Open
Document.
GHA, (2005). Cost per Kilometre of Key Road Works. Unit Cost Estimates from the
Ghana Highway Authorize, Accra-Ghana.
GIPC, (n.d.). Infrastructure Projects for Private Sector Participation. Ghana
Investment Promotion Council, Accra-Ghana. Retrieved on May 22, 2003 from:
http://www.gipc.org.gh
GTZ (2003). International Fuel Prices. Publication on fuel prices worldwide, Germany
Technical Cooperation, Eschborn, Germany.
GTZ (2005). International Fuel Prices. Publication on fuel prices worldwide, Germany
Technical Cooperation, Eschborn, Germany.
Heggie, I.G. and Vickers, P. (1998). Commercial Management and Financing of Roads.
Technical Paper 409, World Bank, Washington. D.C.
Heggie, I.G., (2004). Preparing a Road Financing Plan. Course Notes for Senior Road
Executive program at the University of Birmingham, UK. Retrieved on October 16,
2006 from http://www.worldbank.org/eca/trans/roadfinancing/en/add-resources.htm.
ILO, (n.d.). Chapter 3 Road Maintenance Definitions and Practice. Retrieved on
September 22, 2006 from http://www.ilo.org/public/english/employment/recon
/eiip/asist/asistap/download/rmdandp.pdf.
IMF, (January 2004). Ghana Petroleum Pricing Formula. International Monetary Fund.
Retrieved on October 25, 2006 from
http://www.imf.org/external/np/loi/2004/gha/01/061504.pdf
Ivins, T., (2005). The N3 Toll Concession: The 418km Challenge. A presentation at
IBTTA Transportation Summit, Nice, France.
Kerali, H., (2002). Presentation made in Kumasi-Ghana at the 2002 Donor Conference
Leiman, T (n.d). Efficiency and Road Privatisation: Bidding, Tolling and the User Pays
Principle. Retrieved on September 20, 2006 from:
http://www.tips.org.za/events/papers/Leiman.PDF
MRT (January 2003). Draft Policies and Discussion Papers on Axle Load Control, Fuel
Levy and Tolling of Roads. Ministry of Roads and Transport, Ghana.
____ (2001). Annual Report (Electronic Version) Accra: Ministry of Roads and
Transport, Ghana.
____ (2002). Annual Report (Electronic Version) Accra: Ministry of Roads and
Transport, Ghana.
92
____ (2003). Annual Report: Progress Report as at December 2003. (Electronic
Version) Accra: Ministry of Roads and Transport, Ghana.
____ (March 2005). First Quarter Report. (Electronic Version) Accra: Ministry of
Roads and Transport, Ghana.
____ (2005). Annual Report: Progress Report as at December 2005. (Electronic
Version) Accra: Ministry of Roads and Transport, Ghana.
____ (2005b). Draft Final Annual Report. (Electronic Version) Accra: Ministry of
Roads and Transport, Ghana.
Nevitt, P. and Fabozzi, F. (1995). Project Financing. Euromoney Publications.
NPA, (April 2006). Revision of Petroleum Product Prices. The National Petroleum
Authority, Accra-Ghana.
NPA, (September 2006). Revision of Petroleum Product Prices. The National
Petroleum Authority, Accra-Ghana.
NRA, (2004). Horizon 2010: The Strategic Vision of the South African National Roads
Agency Limited for the year 2010. Pretoria, South Africa.
____ (2005). Annual Report 2004/2005. South African National Roads Agency,
Pretoria, South Africa.
____ (2005b). Declaration of Intent 2005-2008. South African National Roads Agency,
Pretoria, South Africa.
____ (n.d.). Road Conditions. Road Safety and Toll Roads –FAQ’s. National Roads
Agency. Retrieved August 23, 2006 from:
http://www.arrivealive.co.za/pages.asp?mc=road&nc=tollroads.
NRFA, (December, 2004). Five-Year Business Plan April 2004 to March 2009. Third
Draft. National Road Fund Administration. Windhoek, Namibia.
PriceWaterhouseCoopers, (March 2004). Preparation of the Economic, Financial,
Technical and Administrative Framework for Road Concession Projects in Ghana.
Inception Report, Ministry of Roads and Transport, Ghana.
Roth, G. (1996). Roads in a Market Economy. Hants, England: Avebury.
Talvitie, A., (1998). Performance Indicators for the Road Sector. World Bank, 1818 H
Street, N.W. Washington D.C. 20433, U.S.A.
TOR, (2006). Operations & Processes - Crude Oil Supply. Retrieved on May 20, 2006
from:http://www.torghana.com/page.htm?PageID=3&ChapterID=56&mysubfilla=3
2 &page=ops.gif
93
Wikipedia (2006). Inflation-linked bond. Definition retrieved on September 20, 2006.
World Bank Institute (2000). Privatization and Regulation of Transport Infrastructure:
Guidelines for Policymakers and Regulators. World Bank, Washington D.C.
Howe, J. and D.F. Bryceson (1993). Women and Labour-Based Road works in Sub-
Saharan Africa. Labour-Based Technology: A Review of Current Practice.
Proceeding of the regional seminar on labour-based road technology, held on
September 27 – October 1 in Harare, Zimbabwe, organised by the Institute of
Engineers. Geneva: ILO.
World Bank (n.d). Developing Rural Transport Policies and Strategies. A Draft World
Bank Technical Paper. Available from: www.worldbank.org/transport/
rural_tr/p&s_docs/ruralp&s.pdf (Accessed 18 April 2006)
Porter, G. (1999) A gender perspective on transport and accessibility in off-road areas:
the case of women traders in Gomoa, coastal Ghana - in Balancing the Load –
(Electronic Version). Proceedings of the Asia and Africa Regional Seminars on
Gender and Rural Transport. London: International Forum for the Rural Transport
and Development.
Scott, C. (2000). Transport and Rural Poverty Reduction. Presentation at the Transport
and Poverty Alleviation Workshop, World Bank, Washington D.C., 13 June 1999.
World Bank, (n.d.). Toll Roads and Concessions. World Bank, Washington, D.C.
Retrieved September 28, 2006 from:
http://www.worldbank.org/transport/roads/toll_rds.html.
94
APPENDIX A: PERSONS CONTACTED
Mr. Boama Djan Director of Planning, Ghana Highway Authority
Prof. Udo Gaspary IP-Consult, Stuttgart, Germany
Dr. Frank Weiler Transport Sector Economist, KfW - Frankfurt, Germany
Mr. Armin Wagner Transport Policy Advisor, GTZ Eschborn, Germany
Dr. Sascha Thielmann Infrastructure Policy Advisor, GTZ Eschborn, Germany
Mr. Con Roux Marketing Manager, N3TC Project, South Africa
Mr. Koos Smit Executive Engineering, South Africa National Road
Agency (SANRAL), Pretoria, South Africa
Dr. Gerhard Metschies Senior Transport Advisor, Germany
95
APPENDIX B: ROAD NETWORK LIFE CYCLE COSTS
Table 33 Detail calculation of annual road network life cycle costs
Road Class Network
Condition Network
Needs Network
Length [2003] Cost of clearing backlog Annual maintenance costs Asset Replacement
costs Total Annual
Costs
Routine Periodic R+P
km % US$/km US$m US$m/yr US$/km/yr US$m/yr US$/km US$m Years US$m/yr US$m/yr US$/km US$m/yr US$m
TRUNK ROADS 12 690 26% 1 271 127.1 13.3 425.0 61.8 75.0 137.6 339.7
Asphalt & PCC 1 600 13% 86 8.6 1.8 176.4 14.7 16.5 26.7 51.9
Poor Reconstruct 10
0
7% 500.00
0
52 5.2 1 15
0
0.1 110 00
0
11.
5
12 1.
0
1.1 500 00
0
1.
7
8.
0
Fair Overlay 31
0
19% 110.00
0
34 3.4 1 15
0
0.4 110 00
0
33.9 12 2.
8
3.2 500 00
0
5.1 11.
7
Good 1 19
0
74% 1 15
0
1.4 110 00
0
131.1 12 10.9 12.3 500 00
0
19.9 32.2
Bituminous 4 730 37% 336 33.6 4.9 108.9 12.1 17.0 47.3 98.0
Poor Reconstruct 99
0
21% 300 00
0
29
8
29.
8
1 04
0
1.
0
23 00
0
22.9 9 2.
5
3.
6
300 00
0
9.9 43.3
Fair Resurface 1 66
0
35% 23 00
0
3
8
3.
8
1 04
0
1.
7
23 00
0
38.1 9 4.2 6.
0
300 00
0
16.
6
26.3
Good "Do nothing" 2 08
0
44% 1 04
0
2.2 23 00
0
47.9 9 5.3 7.
5
300 00
0
20.
8
28.3
Gravel 6 360 50% 848 84.8 6.5 139.9 35.0 41.5 63.6 189.9
Poor Reconstruct 4 04
0
64% 200 00
0
809 80.9 1 02
0
4.1 22 00
0
88.9 4 22.2 26.4 200 00
0
40.4 147.
7
Fair Regravel 1 81
0
28% 22 00
0
4
0
4.
0
1 02
0
1.
8
22 00
0
39.
7
4 9.9 11.
8
200 00
0
18.
0
33.
8
Good "Do nothing" 51
0
8% 1 02
0
0.
5
22 00
0
11.2 4 2.
8
3.3 200 00
0
5.1 8.4
URBAN ROADS 4 060 8% 396 39.6 7.3 107.2 15.2 22.5 31.3 93.4
Asphalt & PCC 410 10% 62 6.2 0.8 34.5 2.9 3.7 5.6 15.5
Poor Reconstruct 13
0
32% 404 40
0
53 5.3 1 90
0
0.3 83 60
0
11.
0
12 0.9 1.2 404 40
0
1.
8
8.3
Fair Overlay 11
0
26% 83 60
0
9 0.9 1 90
0
0.2 83 60
0
9.
0
12 0.
7
1.
0
404 40
0
1.
5
3.3
Good "Do nothing" 17
0
42% 1 90
0
0.3 83 60
0
14.
5
12 1.2 1.
5
404 40
0
2.3 3.9
Bituminous 1 520 37% 122 12.2 2.9 42.0 4.7 7.6 11.5 31.3
Poor Reconstruct 49
0
32% 227 30
0
111 11.1 1 90
0
0.9 27 60
0
13.4 9 1.
5
2.4 227 30
0
3.
7
17.2
Fair Resurface 40
0
26% 27 60
0
11 1.1 1 90
0
0.
8
27 60
0
10.9 9 1.2 2.
0
227 30
0
3.
0
6.1
Good "Do nothing" 64
0
42% 1 90
0
1.2 27 60
0
17.
6
92.
0
3.2 227 30
0
4.
8
8.
0
Gravel 2 130 52% 212 21.2 3.6 30.7 7.7 11.3 14.2 46.7
Poor Reconstruct 1 58
0
74% 133 00
0
21
0
21.
0
1 70
0
2.
7
14 40
0
22.
7
45.
7
8.4 133 00
0
10.
5
39.
8
Fair Regravel 19
0
9% 14 40
0
3 0.3 1 70
0
0.3 14 40
0
2.
8
40.
7
1.
0
133 00
0
1.3 2.
6
Good "Do nothing" 36
0
17% 1 70
0
0.
6
14 40
0
5.2 4 1.3 1.9 133 00
0
2.4 4.3
FEEDER ROADS 32 610 66% 448 44.8 13.0 149.1 38.8 51.8 43.6 140.2
Bituminous 1 210 4% 45 4.5 0.6 19.7 2.2 2.8 5.7 13.0
Poor Reconstruction 29
0
24% 141 30
0
41 4.1 47
0
0.1 16 20
0
4.
7
90.
5
0.
7
141 30
0
1.4 6.2
Fair Surface 23
0
19% 16 20
0
40.447
0
0.1 16 20
0
3.
7
90.4 0.
5
141 30
0
1.1 2.
0
Good "Do nothing" 69
0
57% 47
0
0.3 16 20
0
11.2 9 1.2 1.
6
141 30
0
3.3 4.
8
Gravel 17 770 54% 311 31.1 8.4 112.4 28.1 36.4 26.6 94.2
Poor Reconstruction 9 24
0
52% 30 00
0
27
7
27.
7
47
0
4.3 6 30
0
58.4 4 14.
6
18.9 30 00
0
13.9 60.
5
Fair Regravel 5 33
0
30% 6 30
0
34 3.4 47
0
2.
5
6 30
0
33.
7
4 8.4 10.9 30 00
0
8.
0
22.3
Good "Do nothing" 3 20
0
18% 47
0
1.
5
6 30
0
20.2 4 5.1 6.
6
30 00
0
4.
8
11.4
Earth 13 630 42% 93 9.3 4.1 17.0 8.5 12.6 11.2 33.1
Poor Reconstruct 7 09
0
52% 12 30
0
8
7
8.
7
30
0
2.1 1 30
0
8.9 2 4.4 6.
6
12 30
0
5.
8
21.1
Fair Reshape 4 09
0
30% 1 30
0
5
0.
5
30
0
1.2 1 30
0
5.1 2 2.
6
3.
8
12 30
0
3.4 7.
7
Good "Do nothing" 2 45
0
18% 30
0
0.
7
1 30
0
3.1 2 1.
5
2.3 12.30
0
2.
0
4.3
Total 49 370 100% 2 115 211.5 33.6 681.4 115.8 149.4 212.5 573.4
Adm. Costs (5%) 105,8 10.6 1.7 34.1 5.8 7.5 10.6 28.7
Total with adm. 2 221 222.1 35.3 715.5 121.6 156.8 223.1 602.0
96
APPENDIX C: ROAD FUND REVENUES AND USER CONTRIBUTION
Table 34 Annual road fund revenue
Notes Assumptions (1) cars, motorcycles consume premium and pick-ups, buses and trucks consume diesel. (2) Approximately all refined premium and
diesel oils are consumed by vehicles. Exchange rate US$ 1= GHC 9000.
Vehicle
population Vehicle
registration rev. Vehicle inspection
revenues Road fund fuel levy
revenues International
transit revenues Toll revenues Road
fund
Vehicle
type No. of
veh Regd.
veh. Fee Rev. Vehicles
inspected Fee Rev. Road
levy Consum
ption Rev. Int.
transits Fee Rev. trips Toll
rate Rev Total
[2005] US$ US$m US$ US$m US$/litre Metric
Tonnes US$m US$ US$m US$ US$m US$m
Motor
Cycles 112 400 15 150 5.6 0.08 89 900 2.2 0.20
3 237 400 0.02 0.07
Cars 427 300 29 600 22.0 0.65 341 800 2.2 0.75
0.07 633 400 57.3 179 500 2.2 0.39 12 308 700 0.05 0.68
60.2
Pickup
/Light Bus 48 800 8 700 33.0 0.29 39 000 3.3 0.13 76 900 2.4 0.19 1 405 300 0.09 0.12
Heavy Bus 107 400 5 600 43.9 0.25 85 900 3.8 0.33 59 700 4.4 0.26 3 094 500 0.14 0.44
Light
Trucks 37 500 2 500 55.6 0.14 30 000 3.3 0.10 20 500 2.6 0.05 1 079 200 0.20 0.21
Medium
Trucks 16 600 960 72.2 0.07 13 300 4.4 0.06 9 200 4.4 0.04 479 300 0.20 0.09
Heavy
Trucks 13 700 1 380 131.8 0.18 11 000 11.0 0.12
0.07 928 500 72.3
7 200 5.5 0.04 395 600 0.44 0.17
75.7
Total 763 700 63 870 1.66 610 900 1.69 129.7 353 000 0.98 22 000 000 1.80 135.8
97
Table 35 Annual total road user contributions
Notes Assumptions (1) cars, motorcycles consume premium and pick-ups, buses and trucks consume diesel. (2) Approximately all refined premium and
diesel oils are consumed by vehicles. Exchange rate US$ 1= GHC 9000
Vehicle
population Vehicle
registration rev. Vehicle inspection
revenues Road fund fuel levy
revenues International
transit revenues Toll revenues Road
fund
Vehicle
type No. of
veh Reg.
veh. Fee Rev. Vehicles
inspected Fee Rev. Road
levy Consum
ption Rev. No. int.
transits Fee Rev. No. of
trips Toll
rate Rev Total
[2005] US$ US$m US$ US$m US$/litre Metric
Tonnes US$
m US$ US$m US$ US$
m US$m
Motor
Cycles 112 400 15 150 5.6 0.08 89 900 2.2 0.20
3 237 400 0.02 0.07
Cars 427 300 29 600 22.0 0.65 341 800 2.2 0.75
0.17 633 400 148.8
179 500 2.2 0.39 12 308 700 0.05 0.68
151.7
Pickup
/Light Bus 48 800 8 700 33.0 0.29 39 000 3.3 0.13 76 900 2.4 0.19 1 405 300 0.09 0.12
Heavy Bus 107 400 5 600 43.9 0.25 85 900 3.8 0.33 59 700 4.4 0.26 3 094 500 0.14 0.44
Light
Trucks 37 500 2 500 55.6 0.14 30 000 3.3 0.10 20 500 2.6 0.05 1 079 200 0.20 0.21
Medium
Trucks 16 600 960 72.2 0.07 13 300 4.4 0.06 9 200 4.4 0.04 479 300 0.20 0.09
Heavy
Trucks 13 700 1 380 131.8 0.18 11 000 11.0 0.12
0.12 928 500 134.4
7 200 5.5 0.04 395 600 0.44 0.17
137.8
Total 763 700 63 870 1.66 610 900 1.69
283.3 353 000 0.98 22 000 000 1.80 289.4
98
APPENDIX D: QUESTIONNAIRES FOR TOLL ROAD USERS
Questionnaire number_________________________________
Questionnaire administered by __________________________
Respondent’s location_________________________________
Date______________________________________________
1) Your Gender
Male Female
2) Age
Below 18 18-25 26-40 40-60
3) Household size
one or two three to five five to 10 more than 10
4) Number of vehicles in Household
one two three four five >five
5) Employment status
Student
Unemployed
Employee
Self-employer
Retired
Other
6) Vehicle Type
motorbike car pickup/van small bus
7) Which of these toll roads do you often use? (select only one)
Tema-Accra Tema-Akosombo Ksi-Sunyani Ksi-Mampong-Ejura
8) Usual trip purpose
school work shopping visit religious Other (specify)_________
9) What is the average travel time (in hours) from origin to destination?
10) Number of return trips?
at least four return trip per week
one return trip per week
two return trips per week
three return trips per week
one return trip in two week
one return trip per month
11) How would you describe the existing toll rate?
Very low low just ok high very high
99
12) Which of the following, in your opinion, is/are the primary cause(s) of accidents on this
road?
driver behaviour(e.g. over-speeding)
road condition (e.g. potholes)
vehicle condition (e.g. bad brakes)
road environment (no streetlights)
broken-down vehicles on road
Other
13) Which of the following will most effectively control congestion on this road?
increase number of booths
charge higher peak hour toll rates
introduce electronic tolling
Other (specify)
14) Why do some drivers use unauthorised routes along this road? (only for Tema-Accra
Motorway users)
Avoid toll payment
Short-cut to residence/workplace along route
Avoid traffic congestion
Indiscipline
Other(specify)
15) Is there an alternative route to your destination if you decide not to use this toll-road?
Yes No
16) What is the average travel time (in hours) to destination using the alternative route?
17) Please select the highest toll rate you will be willing to pay on the toll road? (Beyond this
toll rate you might consider using a public transport or the non-tolled alternative route to your
destination)
1,000
1,500
2,000
2,500
3,000
4,000
5,000
Other
18) How much do spend per month on vehicle maintenance? (excluding cost of fuel)
less than 200,000
200,000 to 500,000
500,000 to 1m
1 to 2million
2 to 5million
more than 5million
19) How should highway construction and maintenance be financed?
Fuel tax
Tolls
Consolidated fund
Donors
Other(specify)
20) Who should manage highway toll projects?
Public alone Public/Private partnership No preference
100
21) Which category of highways could be tolled?
new highways existing highways both none
22) What is your monthly household income (in Cedis)?
less than 0.5million
0.5-1m
1-2m
2-5m
5-10m
10-15m
15-20m
more than 20m
23) Any suggestions for improvement in road tolling operations in Ghana?
101
APPENDIX E SUMMARY OF SURVEY DATA
SN Age House -
hold
size
Number of
household
vehicles
Employment
status Vehicle
type Trip
purpose Number of
return trips Causes of
accidents
Congestion
control
measure
Use of
unathorised
routes
Existence
of
alternative
routes
Highest
toll
willing to
pay
Time savings
using toll road
Vehicle
maintenance
costs
How should highways
be financed? Who should
manage toll roads?
Which
highways
should be
tolled?
Household
income
1 <18 > 10 3 retired car work atleast four
time a week Road Condition other avoid traffic yes 1000 No time
savings 200 - 500 tolls public new 2 - 5
2 18 - 25 5 - 10 2 student car work thrice a week Road Environment booths other no 500 NA 500 - 1000 tolls public both < 0.5
3 26 - 40 5 - 10 2 unemployed car visit thrice a week Driver Behaviour electronic indiscipline yes 5000 No time
savings 200 - 500 tolls public both 2 - 5
4 26 - 40 5 - 10 5 self employed car work atleast four
time a week Driver Behaviour other other no 500 NA 500 - 1000 tolls PPP new 2 - 5
5 18 - 25 3 - 5 2 student pick up work once a week Driver Behaviour booths shortcut yes 1000 No time
savings NA tolls public both 5 - 10
6 40 - 60 3 - 5 1 self employed car work atleast four
time a week Driver Behaviour booths other no 500 NA 200 - 500 tolls no pref both 0.5 - 1
7 26 - 40 NA 3 self employed small bus work once a week Driver Behaviour other other no 1000 NA <200 tolls public existing < 0.5
8 26 - 40 > 10 3 self employed car work once a week Driver Behaviour booths shortcut no 500 NA 500 - 1000 Consolidated funds public new < 0.5
9 18 - 25 3 - 5 1 self employed car work atleast four
time a week Driver Behaviour peak toll avoid traffic no 1500 NA 500 - 1000 Consolidated funds PPP both 2 - 5
10 26 - 40 > 10 2 self employed car work thrice a week Driver Behaviour other shortcut no 500 NA 500 - 1000 tolls public both 2 - 5
11 26 - 40 3 - 5 1 Employee car other atleast once a
month Driver Behaviour other avoid traffic no 1000 NA ">5000" Consolidated funds public existing 2 - 5
12 18 - 25 5 - 10 1 unemployed car work atleast four
time a week Road Condition booths avoid traffic no 500 NA ">5000" tolls PPP both 1 - 2
13 40 - 60 3 - 5 2 self employed car work once a week Driver Behaviour electronic shortcut yes 1000 upto 50% time
savings 500 - 1000 all no pref both 5 - 10
14 26 - 40 > 10 3 self employed car work atleast four
time a week Road Condition booths shortcut no 1000 NA 200 - 500 tolls public both 0.5 - 1
15 26 - 40 3 - 5 1 self employed car work twice a week Driver Behaviour other avoid traffic no 1000 NA 500 - 1000 tolls public new 2 - 5
16 40 - 60 > 10 1 retired car work atleast four
time a week Driver Behaviour booths shortcut no 500 NA 500 - 1000 tolls public both 5 - 10
17 26 - 40 > 10 1 self employed car work atleast four
time a week Driver Behaviour other shortcut no 1000 NA 500 - 1000 tolls public none 2 - 5
18 18 - 25 5 - 10 1 self employed car work thrice a week Driver Behaviour booths indiscipline yes 500 upto 100%
time savings 200 - 500 tolls public both 2 - 5
19 26 - 40 > 10 1 self employed car work twice a week Road Condition other other yes 1000 upto 50% time
savings 1000 - 2000 tolls public new 2 - 5
20 26 - 40 5 - 10 1 retired car work once a week Road Condition booths other yes 1000 No time
savings NA Consolidated funds PPP existing 0.5 - 1
21 26 - 40 > 10 2 self employed car work twice a week Driver Behaviour electronic shortcut yes 2000 upto 50% time
savings 500 - 1000 Consolidated funds public both 1 - 2
22 26 - 40 5 - 10 2 self employed car work once a week Driver Behaviour electronic avoid traffic yes 1000 more than
100% time
savings 500 - 1000 tolls PPP both 2 - 5
23 18 - 25 5 - 10 1 Employee cargo work atleast once a
month Driver Behaviour electronic shortcut yes 1500 No time
savings 200 - 500 Fuel tax public existing 1 - 2
24 40 - 60 5 - 10 1 retired pick up work atleast four
time a week Vehicle Condition NA indiscipline yes 1000 NA 500 - 1000 tolls public new < 0.5
25 26 - 40 3 - 5 1 self employed car work once a week Vehicle Condition other avoid traffic no 1000 NA 500 - 1000 tolls PPP both 1 - 2
26 40 - 60 3 - 5 2 self employed pick up work thrice a week Driver Behaviour electronic avoid traffic no 1500 NA 200 - 500 Fuel tax PPP new 1 - 2
27 40 - 60 5 - 10 1 Employee pick up work twice a week Vehicle Condition electronic avoid traffic no 2000 NA 1000 - 2000 Fuel tax PPP new 1 - 2
28 18 - 25 3 - 5 3 Employee cargo work thrice a week Vehicle Condition electronic indiscipline no 6000 NA ">5000" Fuel tax public new 1 - 2
29 26 - 40 1- 2 1 Employee car work twice a week Driver Behaviour electronic indiscipline yes 500 upto 50% time
savings 500 - 1000 Fuel tax PPP new 0.5 - 1
30 40 - 60 3 - 5 1 unemployed car shopping atleast four
time a week Vehicle Condition electronic indiscipline yes 1000 upto 50% time
savings 200 - 500 Fuel tax public new NA
102
SN Age House -
hold
size
Number of
household
vehicles
Employment
status Vehicle
type Trip
purpose Number of
return trips Causes of
accidents
Congestion
control
measure
Use of
unathorised
routes
Existence
of
alternative
routes
Highest
toll
willing to
pay
Time savings
using toll road
Vehicle
maintenance
costs
How should highways
be financed? Who should
manage toll roads?
Which
highways
should be
tolled?
Household
income
31 26 - 40 5 - 10 1 Employee pick up work atleast four
time a week Vehicle Condition other shortcut no 1000 NA 200 - 500 tolls PPP existing < 0.5
32 26 - 40 3 - 5 NA unemployed cargo work atleast four
time a week Driver Behaviour booths shortcut yes NA upto 50% time
savings 200 - 500 tolls public both NA
33 26 - 40 3 - 5 1 self employed pick up work atleast four
time a week Driver Behaviour booths shortcut no NA NA 200 - 500 tolls public both < 0.5
34 40 - 60 5 - 10 2 self employed cargo work once a week Driver Behaviour electronic shortcut yes 4000 No time
savings 1000 - 2000 tolls no pref both NA
35 26 - 40 3 - 5 2 self employed small bus work atleast four
time a week Driver Behaviour booths shortcut no 1000 NA 500 - 1000 tolls public both 0.5 - 1
36 26 - 40 3 - 5 2 Employee big bus work atleast four
time a week Driver Behaviour booths shortcut yes 1500 more than
100% time
savings 500 - 1000 Donors PPP both 0.5 - 1
37 40 - 60 5 - 10 1 Employee small bus work atleast four
time a week Vehicle Condition booths avoid traffic no 1000 NA 200 - 500 tolls PPP new 0.5 - 1
38 40 - 60 5 - 10 2 self employed small bus work atleast four
time a week Driver Behaviour booths avoid traffic yes 1000 NA 200 - 500 Fuel tax public existing < 0.5
39 26 - 40 3 - 5 1 Employee small bus work atleast four
time a week Vehicle Condition booths avoid traffic yes 1000 upto 50% time
savings 200 - 500 tolls public both 0.5 - 1
40 40 - 60 3 - 5 NA Employee small bus work atleast four
time a week Driver Behaviour peak toll shortcut yes 1500 upto 50% time
savings 200 - 500 tolls public existing 0.5 - 1
41 26 - 40 > 10 3 Employee car work atleast once a
month Driver Behaviour booths avoid traffic yes 500 upto 50% time
savings <200 tolls public existing < 0.5
42 26 - 40 5 - 10 1 self employed car shopping once a week Driver Behaviour NA indiscipline yes 500 upto 100%
time savings 200 - 500 tolls public existing 2 - 5
43 26 - 40 1- 2 1 self employed car work atleast four
time a week Vehicle Condition other avoid traffic yes 1000 NA NA tolls public new NA
44 18 - 25 1- 2 1 Employee car work once a week Driver Behaviour booths avoid traffic yes 2000 upto 100%
time savings 200 - 500 Others PPP both < 0.5
45 26 - 40 3 - 5 1 Employee car visit thrice a week Driver Behaviour electronic indiscipline yes 500 upto 50% time
savings 200 - 500 tolls public both 5 - 10
46 40 - 60 5 - 10 2 self employed car work once a week Vehicle Condition booths avoid traffic yes 500 NA 500 - 1000 tolls public both 0.5 - 1
47 26 - 40 3 - 5 1 Employee car visit once a week Road Environment booths other yes 500 NA 1000 - 2000 tolls public both 5 - 10
48 26 - 40 3 - 5 1 Employee pick up work once a week Driver Behaviour electronic avoid traffic yes 4000 NA "2000-5000" tolls PPP both 1 - 2
49 40 - 60 3 - 5 1 Employee car work once a week Driver Behaviour electronic other yes 1000 upto 100%
time savings "2000-5000" Fuel tax public both 2 - 5
50 26 - 40 > 10 1 Employee car work twice a week Driver Behaviour booths shortcut NA 1000 NA NA Others no pref NA NA
51 26 - 40 3 - 5 2 self employed car work twice a week Driver Behaviour electronic shortcut yes NA upto 100%
time savings 1000 - 2000 Fuel tax PPP both 5 - 10
52 26 - 40 3 - 5 2 Employee pick up work once a week Driver Behaviour booths NA no 4000 NA ">5000" Consolidated funds public both 0.5 - 1
53 40 - 60 5 - 10 2 self employed car work thrice a week Driver Behaviour booths indiscipline yes 1000 NA 200 - 500 tolls public both 2 - 5
54 26 - 40 3 - 5 1 Employee car work atleast four
time a week Driver Behaviour booths shortcut yes 1000 upto 100%
time savings 500 - 1000 Fuel tax no pref both 5 - 10
55 26 - 40 1- 2 NA Employee pick up work twice a week Driver Behaviour NA avoid traffic no 1000 NA NA tolls no pref both 0.5 - 1
56 40 - 60 3 - 5 1 Employee small bus work atleast four
time a week Driver Behaviour NA NA yes 5000 more than
100% time
savings 500 - 1000 tolls public both 2 - 5
57 18 - 25 NA 4 Employee cargo work thrice a week Vehicle Condition NA indiscipline no 5000 NA "2000-5000" tolls public both 0.5 - 1
58 40 - 60 5 - 10 2 Employee car work atleast four
time a week Driver Behaviour booths indiscipline yes 1000 upto 50% time
savings 1000 - 2000 tolls public NA 2 - 5
59 40 - 60 5 - 10 2 Employee car shopping atleast once a
month Driver Behaviour electronic indiscipline yes 1000 upto 100%
time savings 200 - 500 tolls public both 2 - 5
60 18 - 25 3 - 5 2 student car school atleast four
time a week Driver Behaviour electronic indiscipline no 1000 NA 500 - 1000 Donors public both 0.5 - 1
61 40 - 60 1- 2 1 self employed pick up work atleast four
time a week Driver Behaviour electronic avoid traffic no 1000 NA 200 - 500 tolls no pref new 1 - 2
103
SN Age House -
hold
size
Number of
household
vehicles
Employment
status Vehicle
type Trip
purpose Number of
return trips Causes of
accidents
Congestion
control
measure
Use of
unathorised
routes
Existence
of
alternative
routes
Highest
toll
willing to
pay
Time savings
using toll road
Vehicle
maintenance
costs
How should highways
be financed? Who should
manage toll roads?
Which
highways
should be
tolled?
Household
income
62 26 - 40 3 - 5 1 Employee car work once a week Driver Behaviour NA NA NA NA NA NA Others no pref NA NA
63 40 - 60 5 - 10 3 Employee car work atleast four
time a week Driver Behaviour booths indiscipline yes 1500 No time
savings <200 Donors public both 0.5 - 1
64 26 - 40 1- 2 3 Employee car shopping twice a week Vehicle Condition NA avoid traffic no 5000 NA <200 Fuel tax public both 0.5 - 1
65 18 - 25 5 - 10 4 retired car work atleast four
time a week Driver Behaviour NA indiscipline yes 5000 NA 200 - 500 Others no pref both NA
66 40 - 60 3 - 5 1 Employee car work atleast four
time a week Driver Behaviour electronic shortcut yes 1000 upto 50% time
savings "2000-5000" tolls no pref both 2 - 5
67 18 - 25 1- 2 3 self employed car school twice a week Driver Behaviour electronic indiscipline yes 5000 more than
100% time
savings 1000 - 2000 tolls public new 1 - 2
68 40 - 60 5 - 10 3 self employed car work twice a week Vehicle Condition booths avoid traffic yes 5000 No time
savings 200 - 500 tolls public both 1 - 2
69 26 - 40 3 - 5 2 Employee big bus work atleast once a
month Driver Behaviour booths indiscipline no 1000 NA NA tolls no pref NA < 0.5
70 26 - 40 > 10 4 Employee car work once a week Driver Behaviour other avoid traffic yes 1000 upto 100%
time savings "2000-5000" tolls public both 0.5 - 1
71 40 - 60 > 10 4 Employee car work atleast four
time a week Driver Behaviour booths shortcut no 1000 NA <200 tolls PPP both 0.5 - 1
72 26 - 40 3 - 5 NA Employee car work atleast four
time a week Driver Behaviour booths avoid traffic no 1000 NA <200 tolls public both 0.5 - 1
73 18 - 25 1- 2 1 Employee car work atleast four
time a week Driver Behaviour NA other no NA NA 200 - 500 tolls PPP new 0.5 - 1
74 26 - 40 > 10 2 Employee car work atleast four
time a week Driver Behaviour electronic avoid traffic no 1000 NA 200 - 500 Fuel tax PPP both 1 - 2
75 40 - 60 5 - 10 4 Employee car work atleast four
time a week Driver Behaviour electronic shortcut no NA NA 200 - 500 Others PPP new 0.5 - 1
76 26 - 40 > 10 3 self employed car work atleast four
time a week Driver Behaviour other avoid traffic no 1000 NA 200 - 500 Others PPP both 1 - 2
77 18 - 25 3 - 5 3 Employee car work atleast four
time a week Driver Behaviour booths avoid traffic no 1000 NA 500 - 1000 Consolidated funds public existing 1 - 2
78 40 - 60 3 - 5 1 self employed car work atleast four
time a week Driver Behaviour electronic indiscipline no 1000 NA <200 tolls public both 1 - 2
79 40 - 60 > 10 2 self employed car work atleast four
time a week Driver Behaviour electronic shortcut no 1000 NA 500 - 1000 tolls PPP both 2 - 5
80 40 - 60 > 10 1 Employee car work once a week Driver Behaviour booths indiscipline no 1000 NA <200 Consolidated funds PPP new 1 - 2
81 26 - 40 > 10 1 self employed car work atleast four
time a week Driver Behaviour other shortcut no 1000 NA <200 Fuel tax public both 1 - 2
82 26 - 40 > 10 5 Employee car work twice a week Driver Behaviour booths indiscipline no 1000 NA <200 Fuel tax public new 0.5 - 1
83 18 - 25 > 10 1 Employee car work once a week Driver Behaviour electronic indiscipline no 1000 NA <200 tolls PPP new 0.5 - 1
84 18 - 25 > 10 1 Employee car work twice a week Driver Behaviour electronic avoid traffic no 1000 NA <200 tolls no pref both 0.5 - 1
85 26 - 40 3 - 5 3 self employed car work thrice a week Driver Behaviour electronic avoid traffic no 1000 NA <200 tolls PPP new 0.5 - 1
86 26 - 40 > 10 4 self employed car work atleast four
time a week Driver Behaviour other avoid traffic no 1000 NA <200 tolls PPP both 2 - 5
87 26 - 40 > 10 6 Employee car work twice a week Driver Behaviour electronic shortcut no 1000 NA <200 tolls PPP new 0.5 - 1
88 40 - 60 3 - 5 2 self employed car work atleast four
time a week Driver Behaviour electronic shortcut no 500 NA 200 - 500 tolls public both 2 - 5
89 40 - 60 3 - 5 1 self employed car work atleast four
time a week Driver Behaviour booths shortcut no 1000 NA 200 - 500 tolls public both NA
90 26 - 40 5 - 10 4 Employee car work thrice a week Driver Behaviour booths shortcut yes 500 upto 50% time
savings 500 - 1000 tolls PPP both < 0.5
91 40 - 60 5 - 10 2 self employed car work twice a week Driver Behaviour booths avoid traffic no 500 NA 500 - 1000 tolls PPP new 1 - 2
92 40 - 60 5 - 10 1 self employed car work atleast four
time a week Driver Behaviour booths shortcut no 500 NA 500 - 1000 tolls public new 0.5 - 1
104
SN Age House -
hold
size
Number of
household
vehicles
Employment
status Vehicle
type Trip
purpose Number of
return trips Causes of
accidents
Congestion
control
measure
Use of
unathorised
routes
Existence
of
alternative
routes
Highest
toll
willing to
pay
Time savings
using toll road
Vehicle
maintenance
costs
How should highways
be financed? Who should
manage toll roads?
Which
highways
should be
tolled?
Household
income
93 40 - 60 3 - 5 2 self employed car work thrice a week Driver Behaviour electronic shortcut no 1000 NA 200 - 500 tolls public both 1 - 2
94 26 - 40 3 - 5 2 self employed car work atleast four
time a week Driver Behaviour electronic shortcut yes 500 upto 100%
time savings ">5000" Fuel tax no pref new NA
95 26 - 40 5 - 10 2 Employee pick up work atleast once a
month Driver Behaviour other other yes 1000 upto 50% time
savings "2000-5000" tolls no pref existing NA
96 > 60 1- 2 1 Employee small bus work atleast four
time a week Driver Behaviour electronic other yes 1000 upto 50% time
savings "2000-5000" tolls PPP existing < 0.5
97 26 - 40 5 - 10 1 Employee small bus work atleast four
time a week Driver Behaviour booths indiscipline yes 1000 upto 50% time
savings "2000-5000" tolls PPP NA 1 - 2
98 26 - 40 > 10 1 Employee pick up work atleast four
time a week Driver Behaviour electronic NA yes 1000 NA "2000-5000" tolls PPP existing NA
99 NA 1- 2 1 Employee small bus work atleast four
time a week Driver Behaviour booths other yes 1000 more than
100% time
savings 500 - 1000 tolls PPP existing 0.5 - 1
100 26 - 40 3 - 5 2 Employee small bus work atleast four
time a week Driver Behaviour electronic other yes 1000 more than
100% time
savings 500 - 1000 tolls public existing 0.5 - 1
101 26 - 40 1- 2 6 Employee small bus work atleast four
time a week Driver Behaviour booths other yes 500 NA 1000 - 2000 tolls PPP existing NA
102 26 - 40 3 - 5 4 Employee small bus work atleast four
time a week Driver Behaviour booths other yes 1000 upto 50% time
savings 1000 - 2000 tolls PPP existing 0.5 - 1
103 26 - 40 1- 2 4 Employee small bus work atleast four
time a week Vehicle Condition NA other yes 1000 upto 50% time
savings 200 - 500 tolls PPP existing < 0.5
104 26 - 40 1- 2 1 Employee small bus work atleast four
time a week Driver Behaviour other NA yes 500 NA 500 - 1000 tolls PPP existing NA
105 26 - 40 1- 2 NA retired small bus work atleast four
time a week Driver Behaviour electronic other yes 1000 upto 50% time
savings 1000 - 2000 tolls PPP existing 0.5 - 1
106 18 - 25 3 - 5 3 Employee car work atleast four
time a week Driver Behaviour booths other yes 1000 No time
savings 1000 - 2000 tolls PPP existing NA
107 26 - 40 1- 2 2 Employee car work atleast four
time a week Vehicle Condition electronic avoid traffic yes 500 No time
savings 1000 - 2000 tolls PPP existing NA
108 NA 3 - 5 2 Employee small bus work atleast four
time a week Vehicle Condition booths other yes 1000 more than
100% time
savings 500 - 1000 tolls PPP existing NA
109 26 - 40 5 - 10 1 Employee small bus work atleast four
time a week Road Condition booths other yes 1000 upto 50% time
savings "2000-5000" tolls PPP existing < 0.5
110 40 - 60 3 - 5 3 Employee car work atleast four
time a week Driver Behaviour booths NA yes 1000 NA 1000 - 2000 Fuel tax PPP existing NA
111 26 - 40 1- 2 1 Employee small bus work atleast four
time a week Driver Behaviour booths other yes 1000 upto 50% time
savings 200 - 500 tolls PPP existing NA
112 26 - 40 1- 2 4 Employee small bus work atleast four
time a week Driver Behaviour other other yes 1000 upto 50% time
savings 500 - 1000 tolls public existing NA
113 26 - 40 1- 2 1 Employee small bus work atleast four
time a week Driver Behaviour other shortcut yes 1000 upto 50% time
savings 1000 - 2000 tolls PPP existing NA
114 40 - 60 5 - 10 3 Employee car work atleast four
time a week Driver Behaviour other other yes 500 upto 100%
time savings 200 - 500 tolls PPP existing NA
115 26 - 40 5 - 10 2 Employee car work atleast four
time a week Road Condition booths other yes 1000 NA 1000 - 2000 tolls PPP existing NA
105
APPENDIX F: SUMMARY OF SURVEY DATA
Gender
111 96,5 96,5 96,5
43,5 3,5 100,0
115 100,0 100,0
Male
Female
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
Age
1,9 ,9 ,9
17 14,8 15,0 15,9
61 53,0 54,0 69,9
33 28,7 29,2 99,1
1,9 ,9 100,0
113 98,3 100,0
21,7
115 100,0
<18
18 - 25
26 - 40
40 - 60
> 60
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
Household size
18 15,7 15,9 15,9
41 35,7 36,3 52,2
31 27,0 27,4 79,6
23 20,0 20,4 100,0
113 98,3 100,0
21,7
115 100,0
1- 2
3 - 5
5 - 10
> 10
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
Number of household vehicles
49 42,6 44,5 44,5
31 27,0 28,2 72,7
16 13,9 14,5 87,3
10 8,7 9,1 96,4
21,7 1,8 98,2
21,7 1,8 100,0
110 95,7 100,0
54,3
115 100,0
1
2
3
4
5
6
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
106
Employment status
32,6 2,6 2,6
43,5 3,5 6,1
40 34,8 34,8 40,9
62 53,9 53,9 94,8
65,2 5,2 100,0
115 100,0 100,0
student
unemployed
self employed
Employee
retired
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
Vehicle type
75 65,2 65,2 65,2
12 10,4 10,4 75,7
21 18,3 18,3 93,9
21,7 1,7 95,7
54,3 4,3 100,0
115 100,0 100,0
car
pick up
small bus
big bus
cargo
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
Trip purpose
105 91,3 91,3 91,3
43,5 3,5 94,8
32,6 2,6 97,4
21,7 1,7 99,1
1,9 ,9 100,0
115 100,0 100,0
work
shopping
visit
school
other
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
Number of return trips
19 16,5 16,5 16,5
15 13,0 13,0 29,6
12 10,4 10,4 40,0
63 54,8 54,8 94,8
65,2 5,2 100,0
115 100,0 100,0
once a week
twice a week
thrice a week
atleast four time a week
atleast once a month
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
107
Causes of accidents
76,1 6,1 6,1
21,7 1,7 7,8
90 78,3 78,3 86,1
16 13,9 13,9 100,0
115 100,0 100,0
Road Condition
Road Environment
Driver Behaviour
Vehicle Condition
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
Congestion control measure
47 40,9 44,8 44,8
36 31,3 34,3 79,0
21,7 1,9 81,0
20 17,4 19,0 100,0
105 91,3 100,0
10 8,7
115 100,0
booths
electronic
peak toll
other
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
Use of unathorised routes
31 27,0 28,4 28,4
22 19,1 20,2 48,6
32 27,8 29,4 78,0
24 20,9 22,0 100,0
109 94,8 100,0
65,2
115 100,0
avoid traffic
indiscipline
shortcut
other
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
Existence of alternative routes
63 54,8 55,8 55,8
50 43,5 44,2 100,0
113 98,3 100,0
21,7
115 100,0
yes
no
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
108
Highest toll willing to pay
23 20,0 21,1 21,1
66 57,4 60,6 81,7
65,2 5,5 87,2
32,6 2,8 89,9
32,6 2,8 92,7
76,1 6,4 99,1
1,9 ,9 100,0
109 94,8 100,0
65,2
115 100,0
GHC 500
1000
1500
2000
4000
5000
6000
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
Time savings using toll road
10 8,7 20,0 20,0
23 20,0 46,0 66,0
10 8,7 20,0 86,0
76,1 14,0 100,0
50 43,5 100,0
65 56,5
115 100,0
No time savings
upto 50% time savings
upto 100% time saving
s
more than 100% time
savings
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
Vehicle maintenance costs
15 13,0 13,9 13,9
33 28,7 30,6 44,4
30 26,1 27,8 72,2
15 13,0 13,9 86,1
10 8,7 9,3 95,4
54,3 4,6 100,0
108 93,9 100,0
76,1
115 100,0
GHC (million)
<0.2
0.2- 0.5
0.5 - 1.0
1.0 - 2.0
2.0 - 5.0
>5.0
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
109
How should highways be financed?
81 70,4 70,4 70,4
87,0 7,0 77,4
16 13,9 13,9 91,3
1,9 ,9 92,2
32,6 2,6 94,8
65,2 5,2 100,0
115 100,0 100,0
tolls
Consolidated funds
Fuel tax
all
Donors
Others
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
Who should manage toll roads?
55 47,8 47,8 47,8
46 40,0 40,0 87,8
14 12,2 12,2 100,0
115 100,0 100,0
public
PPP
no pref
Total
Valid Frequency Percent Valid Percent Cumulative
Percent
Which highways could be tolled?
1,9 ,9 ,9
25 21,7 22,7 23,6
30 26,1 27,3 50,9
54 47,0 49,1 100,0
110 95,7 100,0
54,3
115 100,0
none
new
existing
both
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
Household income
14 12,2 15,1 15,1
31 27,0 33,3 48,4
20 17,4 21,5 69,9
21 18,3 22,6 92,5
76,1 7,5 100,0
93 80,9 100,0
22 19,1
115 100,0
GHC (million)
< 0.5
0.5 - 1
1 - 2
2 - 5
5 - 10
Total
Valid
SystemMissing
Total
Frequency Percent Valid Percent Cumulative
Percent
