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Monday, 28 March 2011

Tollgated Zambia? 2nd Edition

Its over two years now since government sounded the idea of introducing toll gates on pedicle road. As was reported at the time, rail operators were also pushing for a national wide introduction of toll gates to encourage modal switch to rail. The government has now come good, or bad depending on your view, with the introduction of the Tolls Bill 2011 - embedded below

The Bill has some good things. Particularly welcome is the creation of a specific Agency that would regulate toll roads. Its also good that the revenue pot from charging is being "ring fenced" for road related work. But three specific problems stood out which must be clarified.

First, the extent of toll roads. The way the Bill is currently drafted there's an expectation that a toll road can be imposed on any road : "The Agency may, on any road, border post, bridge, pontoon or other place - (a) operate toll points; and (b) erect and maintain such structures necessary for operating toll points. That is too broad sweeping.  It erodes the power of local councils to dictate what happens on local roads. I thought we were moving towards decentralisation. At present it sounds like a toll road can be erected right outside your house! Surely the current wording can't be right!

Secondly, the Bill is unclear in relation to regulation of Public Private Partnerships (PPP). Will the new Agency for example be directly involved in the public private partnership?  If so, how does that square with its basic role as a Regulator according to Article 4? The problem with PPP arrangements is that they are only useful where no Regulator exists because one cannot regulate a market in which they also operate (even if another part of government is the one part of the PPP arrangement).

Thirdly, over use of custodial sanctions. I was rather baffled with the new criminal custodial sanction introduced for giving false information to the Inspectorate. This may purely ideological, but I remain concerned regarding the rationale for some of the custodial sentences routinely introduced in many Bills, especially where fines would do the job. Our jails are full, although I recognise that it is a "maximum penalty". Monetary penalties are much more useful in this context. 

The Bill aside there problems with the current undefined policy of toll roads which government will need to resolve through consultation. Three points are worth making here.

First, before we start introducing toll roads we need to be clear on what the policy rationale is. This is the problem I have with the way policy is developed in our country. The government never publishes green papers for consultation as part of its policy development.

Secondly, as a general point, any toll roads must be properly targeted at the policy problem e.g. heavy congestion in urban areas, heavy damage by mining vehicles (without discrimination). So the charging mechanism has to be appropriately designed with efficiency and equity considerations built-in.

Finally, we must keep our eye on the possibility of adverse modal switch. In particular, there's a significant likelihood of modal switch to rail. It does not make sense to have a toll road policy when the rail system is in a state of disrepair. However, I do recognise that charging the mining companies for their freight would be great as it would address the external and disproportionate costs they impose on locals - plus act as a powerful incentive to invest in rail freight.

I hope we will see a policy paper from government on this before they start running to introduce toll roads - but I am not holding my breath. 
The Tolls Bill 2011

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