The Association of Road Contractors (ARC) has proposed an increase in fuel levy and road tolls to raise more funds to finance road construction in the country.
That, the association said, would help government to raise additional revenue to settle its indebtedness to road contractors in the country and also shore up the revenue in the Road Fund.
Currently, government charges GH¢0.07 levy on a litre of fuel, while the road toll ranges between GH¢0.50 to GH¢4.50.
Mr. Joseph Ebo Hewton, the National Chairman of the ARC, who made the appeal at a stakeholders’ workshop on the 2016-2018 Budget in Accra yesterday, noted the government could rake additional $500 million yearly into the Road Funds if the fuel levy and road tolls were reviewed upwards.
He said Tanzania last year raised $483 million dollars from fuel road toll levy and Ghana could raise more than that amount due to increase in road traffic in the country.
The National Chairman called for more than a hundred per cent hike in the fuel levy from the current GH¢0.07 to GHc0.28p.
Besides, he also suggested for the road toll to be increased by hundred per cent in the 2016 budget.
Mr. Hewton explained that per the current fuel levy and the road toll, government could not raise enough revenue for the road construction in the country.
Currently, he said, government owed road contractors across the country GH¢200 million due to the financial challenges facing the economy.
In addition, he said, government also owed contractors on cocoa roads GH¢100 million and appealed to government to settle the debts as “soon as possible” to enable contractors to return to work on those projects.
Mr Hewton said the non-payment of such arrears to contractors was killing the road construction industry and collapsing the businesses of the players in the sector.
He said players in the road sector were reeling under compound interest rates because of their inability to pay, on schedule, monies borrowed from the bank.
According to Mr Hewton, the delay in paying for road contracts was responsible for the shoddy road works in the country.
“Road construction is not like building a house where you can continue at any time. When an uncompleted road project delays, the road deteriorates and the cost increases, which makes the contractor not to deliver quality work,” he said.
“Road contractors borrow from banks to pre-finance road contracts awarded them on cocoa roads, and the government is owing contractors GH¢100 million”, he stated.
The Minister of Roads, Alhaji Inusah Fuseini, responding to the government indebtedness to the ARC, said government was on course in paying the arrears owed the contractors.
“We have settled a substantial amount of the road arrears. Of course, it is work in progress and Ministry of Finance will pay contractors immediately money comes into government coffers”, he said.
Alhaji Fuseini said the arrears in road contracts had come about because of the increase in road projects in the country.
According to him, the road network in the country had currently increased from 36,000 to 71,000 kilometres, which required more funding to pay for those roads.
The Deputy Minister of Finance, Ato Forson also in his response, said government was considering the proposal to increase fuel levy and the road toll, saying last year it decided not to increase the fuel levy and the road toll in order not to burden the tax payers.
On the road arrears, he said, government was working feverishly to clear those arrears to enable contractors complete work on stalled road projects.
Henceforth, government had decided not to start any new road projects which had not been budgeted for Mr. Forson said adding that contractors from now onwards would have to be issued with commencement certificate before they could start any road project.
By Kingsley Asare &