Thu | Aug 17, 2017

Road repairs impacted by withdrawal of gas tax

Published:Thursday | November 20, 2014 | 11:00 AM
Clement Watson

CHIEF EXECUTIVE Officer (CEO) of the Road Maintenance Fund (RMF) Clement Watson has said the diversion of the gas tax from the Fund in April, this year, has impacted its ability to effectively finance road maintenance.

Watson told members of the Infrastructure and Physical Development Committee of Parliament on Tuesday that the RMF has only been allocated $1.2 billion, which represents revenues from motor vehicle licensing.

Noting that the RMF usually gets an additional $1.3 billion from the gas tax, Watson said this allocation is now going to the Consolidated Fund.

"The RMF got zero tax this year," said Watson, indicating that its $1.2 billion from licensing fees was insignificant when compared with the National Works Agency's (NWA) estimate of $4 billion that is needed to carry out road maintenance and related projects.

The NWA is responsible for identifying the needs in terms of road repairs and maintenance and undertake the works with financing from the RMF.

However, the NWA is also constrained by law to repair only main roads with funding from the RMF.

This triggered a spirited debate among committee members who bemoaned the poor condition of non-main roads in various communities.

Restricted to main roads

NWA CEO E.G. Hunter said his agency was prohibited by law to repair non-main roads with financing from the RMF.

Committee member Derrick Smith questioned how the RMF would operate without adequate funds to finance road projects.

Hunter explained that Transport and Works Minister Dr Omar Davies was aware of the situation and has requested information on the number of repairs done to non-main roads in the last three to four years.

He suggested that Davies was attempting to address the problem at the policy level.

In a Gleaner interview, Watson pointed out that the RMF had borrowed US$340 million from the China EX-Im Bank to fund the Jamaica Development Infrastructure Project. He pointed out that the RMF wrote to the Ministry of Finance and explained that it would not be able to repay the interest on the loan or principal beginning 2015. However, Watson said the ministry took over the repayment of the loan and diverted the gas tax from the RMF.