The Finance Act, 2022 has amended the RMLF Act to ensure that out of the levy collected for road maintenance, Sh3 per litre of petroleum sold is set for the roads annuity as well as other roads approved by Parliament.
“Section 3(2) of the Road Maintenance Levy Fund Act, 1993 is amended by inserting the words “to fund the construction of roads under the Road Annuity Programme and similar roads approved by the National Assembly” immediately after the words “Public Finance Management Act, 2012,” the Finance Act, 2022 states.
The Kenya Roads Board, which administers the fund, had targeted to collect Sh69 billion from RMLF in the year ended June 30, 2022.
The Roads Annuity Fund was established under the Public Finance Management (Roads Annuity Fund) Regulations, 2015 to provide capital to meet the national government’s annuity payment obligations for the development and maintenance of roads under the programme.
The changes to the law come barely three months after Parliament revealed that more than Sh47 billion collected under the Roads Annuity Fund between 2016 and last year was returned to the Treasury.
The Fund was established in 2016 to finance public-private partnership projects but the billions of shillings were returned to the Treasury despite contractors abandoning road projects across the country due to lack of funds.
The fund was set up as an alternative road financing plan to ease pressure on the exchequer.
The Treasury in 2019 amended the Road Annuity Fund regulations to allow surplus funds to finance other road projects procured outside the private-public partnership (PPP).
The Cabinet approved the identification of a maximum of 10,000-kilometre priority roads distributed across the country for construction and maintenance under PPP.
An audit report tabled before the National Assembly Special Funds Committee indicates that Sh47 billion that accrued in the annuity fund was wired back to the Treasury.
Infrastructure Principal Secretary Paul Maringa told the parliamentary committee that some projects had been identified and works were expected to start in May this year.
The annuity fund was only used to construct the 48km Ngong-Kiserian-Isinya and the 43km Kajiado-Imaroro roads since its existence in 2016.
Prof Maringa named the projects under the pipeline as Vihiga-Kakamega-Bungoma-Busia, Illasit-Rombo-Njukini-Taveta, Modogashe-Habaswein-Samatar and Rhamu-Mandera.
Pending bills
He cited delays in the actualisation of projects under the new concept, adding that many contractors and financiers were not ready to come on board.
“Owing to the slow take off, the fund had accumulated cash in excess of the planned absorption,” Prof Maringa told Parliament in March.
He said the Sh47 billion sent back to Treasury was meant to pay pending bills for various road projects.
