Why government wants to charge you for using roads
- The state has announced a return to the toll levies charged on road users as expenditure to development shrinks on an account of ongoing fiscal consolidation efforts to tame ballooning debt.
- Receding expenditure to infrastructure development has meant the involvement of the private sector in project financing which links back to toll levies, charged to compensate private investors for their contribution to state projects.
- Development expenditure in the ongoing financial year makes a total of Ksh. 596 billion against a total budget amounting to Ksh. 2.5 trillion.
The debate on tolls has once again lured its ugly head domestically following the announcement of a return to the heavily criticized road-levies.
Criticized the world over for its over-burdening and double-taxation aspects, the toll system is set to make a return prompted greatly by ongoing fiscal consolidation which has meant a cut back in government spending.
Development expenditure has taken the heaviest hit from the allocation dress down as government investments in infrastructure development recede.
According to the National Treasury, transport, which makes up about 50 percent of all development revenue, has been starved off cash prompting the state to adopt Private Public Partnerships (PPPs) in the transformation of Kenya’s road networks.
It is from the PPPs that the government has signaled the return of tolls on roads, a levy charged to meet the compensation of private investments in government infrastructure.
“The alternative is for the state to build, however, the government doesn’t have enough money to build roads. If we can’t collect additional revenues, this will mean a stop to road construction projects. We need to look at the benefit side calculated by a reduction in time travel between any given points,” Director General to the National Treasury’s Public Investments and Portfolio Management Engineer Stanley Kamau said.
He was speaking at the analysis of huge investments made in the transport sector organized by the Institute of Certified Financial Analysts (ICIFA) last Thursday.
Kamau estimated the funding deficit to transport infrastructure development at between Ksh.300 billion and Ksh.400 billion every year.
The toll levy is however not a replacement to the standing road maintenance levy which points to the tough times awaiting motorists and other road users who already see a significant share of their pump prices end up with the State in the form of taxes and levies to escalate concerns on double taxation.
Better roads and increased levies for Kenyans is an illustration of taking the pleasure with the pain as alluded to by the National Treasury Cabinet Secretary, Henry Rotich in his announcement of the setup of the National Toll Fund during his delivery of the Budget Policy Statement to Parliament in June 2018.
“Given the competing needs for our limited resources, we have had to make tough choices. We are clearly conscious of our limited fiscal space and we will be leveraging on the partnerships between the private sector and government,” said CS Rotich.
Among the roads earmarked for the toll-system installation exercise include; the Mombasa-Malaba-Busia highway, the Nairobi-Mau Summit road, the second Nyali Bridge in Mombasa and the Lamu-Garrissa-Isiolo road.
The projects have been listed on the National Treasury’s Public Private Partnership disclosure portal with the Kenya National Highways Authority (KeNHA) being among one in many road agencies with sights on the deal to run and maintain toll services.
State spending to development in the ongoing fiscal year is capped at Ksh.596 billion against a budget totaling to Ksh.2.5 trillion.
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