roads fund board annual report for fy 2013/14 · chairman’s statement on behalf of the roads fund...

RFB ANNUAL REPORT FOR FY 2013/14

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ROADS FUND BOARD ANNUAL REPORT FOR FY 2013/14

Aspiring to be the leading institution in road financing

Roads Fund

Board

Fin

ancin

g

Management

Monito

ring

Roads Fund

Board

Fin

ancin

g

Management

Monito

ring

THE UNITED REPUBLIC OF TANZANIA


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Vision, Mission and Core Values of the Board

Vision

To be among the best internationally recognized institutions in Roads Fund

Management

Mission

To provide sustainable funding for road maintenance to implementing agencies through

collection, disbursement and monitoring its utilization for social economic wellbeing of

the public.

Core Values

Integrity

We observe and maintain high standards of ethical behaviour and the rule of law.

Transparency

We are open, accountable and responsible to stakeholders

Teamwork

We will work as a team to achieve our objectives

Competence

We will depend on skills, knowledge, and experience in all fields of our operations

Innovation

We believe in creative ideas, technologies and practices to enhance quality,

effectiveness and efficiency in road maintenance financing

Professionalism

We execute our duties with respect to professional skills, ethics, standards and

guidelines.


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About the Roads Fund

The Roads Fund Board is a Government institution established by the Road and Fuel Tolls

Act CAP 220. The Fund was established to mobilise resources for roads maintenance. The

Board has nine members drawn from the public as well as the private sector. The mandate

of the Board among other things include:

ensuring that there is full collection of revenue;

timely disbursement of funds to implementing agencies; and

Monitor utilization of funds to ensure value for money.

The implementing agencies are: Ministry of Works (MoW), Prime Minister’s Office,

Regional Administration and Local Governments (PMORALG), and Tanzania Roads Agency

(TANROADS).

The sources of the revenue for the Roads Fund as enumerated by the Act are: fuel levy

imposed on diesel and petrol, transit fees which are imposed on foreign registered

vehicles, overloading fees which are charged to vehicles found overloaded at weighbridge

stations or from any other source at the rate or rates to be determined by Parliament

from time to time.

Section 4 (3) and (4) of the Act sets out lawful uses of the monies from the Fund account

whereby not less than ninety percent (90%) should be used for maintenance and

emergency repairs of classified roads and not more than ten percent should be used for

roads development works. The Fund also finances related administrative costs for such

road works provided that they are planned to be executed in Mainland Tanzania and

respective budget approved by the Parliament. Section 5 (8) states that “All costs with

regard to the Board shall be defrayed from the Fund. After deducting Roads Fund

Administration costs, the legal provision for the use of the Fund is being executed by

allocating the funds in the proportions elaborated hereunder:

1% retained by PMORALG for administrative costs;

29% allocated to LGAs for road development and maintenance;

7% allocated to MoW for development projects; and


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63% allocated to TANROADS for road maintenance.

The classified roads network which are financed by the Roads Fund for the year ended

June 2014 is about 87,241km. Out of this length, national roads managed by TANROADS

is about 35,000 km and the rest, that is 52,241km are district, urban and feeder roads

being maintained by the Local Government Authorities.


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Pictorial Board

Members

Presentation

Leopold B. Kabendera Representing Association of Tour

Operators

Dr. James M. Wanyancha Chairman

Ambassador Herbert Mrango The Permanent Secretary,

Ministry of Works

Mr. Willigis Oswald Representative from Tanzania

Confederation of Co-operatives

Mr. Joseph O. Haule Secretary

Mr. Fulgence Bube Representing Truck Owners

Association

Eng. Peter Chisawillo Representing Tanzania Chamber of

Commerce, Industries and Agriculture

Alhaj Ramadhani Khijjah The Permanent Secretary,

Ministry of Finance

Mr. Jumanne A. Sagini The Permanent Secretary,

PMORALG

Eng. Ven K. Ndyamukama

A Senior Civil Servant from the

Government


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Mrs. Rose Masenga Deputy Manager Finance &

Administration

PICTORIAL RFB

MANAGEMENT TEAM

PRESENTATION

Mr. Joseph O. Haule Roads Fund Manager

Eng Ronald Lwakatare Deputy Manager Technical Services

Mr. Eliud Nyauhenga Deputy Manager Resource Mobilisation

Mr. Ayub James

Internal Auditor


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TABLE OF CONTENT

Vision, Mission and Core Values of the Board .......................................................... iii

About the Roads Fund ................................................................................................... iv

Acronyms and Abbreviations ....................................................................................... ix

Letter of Submittal .......................................................................................................... x

Chairman’s Statement .................................................................................................... 2

The Manager’s Statement .............................................................................................. 5

Departmental Performance Review ............................................................................ 8

PART ONE: REPORT OF THE DIRECTORS ................................................................. 12

PART ONE: REPORT OF THE DIRECTORS ................................................................. 13

RFB Financial Statements and Auditors Opinion .................................................... 36

PART TWO: PERFORMANCE OF THE MINISTRY OF WORKS ................................. 56

Auditors’ Opinion on Financial Statements of the Ministry of Works ................ 26

PART THREE: PERFORMANCE OF PMORALG ............................................................ 34

Auditors’ Opinion on Financial Statements of PMORALG ..................................... 46

PART FOUR: PERFORMANCE OF TANROADS ........................................................... 50

Auditors’ Opinion on Financial Statements of TANROADS ................................... 58

PART FIVE: TECHNICAL AUDITORS REPORT ........................................................... 69


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Acronyms and Abbreviations ADB African Development Bank ARMFA African Road Maintenance Funds Association ATTI Appropriate Technology Training Institute BoD Board of Directors DANIDA Danish International Development Agency DROMAS District Roads Management System DMFA Deputy Manager –Finance and Administration DMTS Deputy Manager –Technical Services DMRM Deputy Manager –Resource Mobilization EWURA Energy and Water Utilities Regulatory Authority EU European Union EAC East Africa Community EATTFP East Africa Trade and Transport Facilitation Project FY Financial Year HIA Head of Internal Audit GOT Government of Tanzania IRF International Road Federation JICA Japan International Cooperation Agency LBT Labour-Based Technology LGA Local Government Authority MC Municipal Council MoFP Ministry of Finance and Planning MTI Morogoro Training Institute MTEF Expenditure Framework NAO National Audit Office NBS National Bureau of Statistics PIARC World Road Association PMMR Performance-based Management and Maintenance of Roads PMORALG Prime Minister’s Office Regional Administration and Local Government PIC Petroleum Import Coordinator PIARC World Road Association RFB Roads Fund Board RMMS Road Maintenance Management System RMI Road Maintenance Initiative RUC Road User Charge RFM Roads Fund Manager SADC Southern Africa Development Coordination TRA Tanzania Revenue Authority TPA Tanzania Port Authority TANROADS Tanzania National Roads Agency USD United States of American Dollar WB World Bank WPU Women Participation Unit


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Letter of Submittal

ROADS FUND BOARD

Hon. Prof. Makame Mbarawa (MP),

Minister for Works, Transport and Communication,

P.O. Box 9423,

DAR ES SALAAM

On behalf of the Roads Fund Board and in pursuance to Section 5 (6) and (7) of the Road

and Fuels Tolls Act, Cap 220; I have the pleasure to submit the Annual Report for the

year ended 30th June 2014.

The report presents the performance of the Roads Fund Board and Implementing

Agencies together with their respective Independent Auditor’s Opinions. It also presents

the Summary of Technical Auditor’s Report.

I submit,

Joseph O. Haule Chairman of the Board

Roads Fund

Board

Fin

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Management

Monito

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Roads Fund

Board

Fin

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Management

Monito

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THE UNITED REPUBLIC OF TANZANIA


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Chairman’s Statement

On behalf of the Roads Fund Board, it is my pleasure to present the Annual Report and

Financial Statements covering the Roads Fund operations for the Financial Year 2013/14.

The Report is submitted in accordance with Section 5(6) of the Roads and Fuel Tolls Act,

Cap 220.

During the year 2013/14 the Government approved adjustment of fuel levy rate from

Tshs200 to 263 per litre of petrol or diesel. It also approved the Board’s request to

introduce motor vehicle inspection fee as a new source of revenue to the Roads Fund.

The collection of motor vehicle inspection fee is yet to commence as it is at a preparatory

stage. At the moment, Motor Vehicle Inspection Fees are collected by the Police under

the Ministry of Home Affairs and transferred to the Ministry of Finance and Planning.

I would like to thank the Government for this commendable and strategic decision which

aims at building internal capacity to maintain and preserve the road assets. This decision

is expected to increase revenue collection and therefore enhance the capacity of

Implementing Agencies to maintain roads under their jurisdiction. The road condition will

improve and therefore reduce travel time, increase road safety and reduce vehicle

operating costs which will contribute significantly to the economic development of the

country.

Mr. Joseph O. Haule, Chairman


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The total revenue collected in FY 2013/14 amounted to Tshs641.2 billion which accounted

for 6.5% of total revenue and 6.8% of tax revenue of the Central Government. This is a

remarkable commitment and reflects the seriousness of the Government towards the

roads maintenance agenda.

However, I would like to underscore the fact that, we still face a daunting challenge to

achieve the desired level of roads maintenance. Currently, the Roads Fund can only meet

53% of road maintenance requirements. Therefore, there is a significant length of road

network left unattended which could deteriorate to a level that may need major

rehabilitation or reconstruction which will be extremely expensive. This situation needs

to be addressed by broadening of the revenue base and increasing sources of revenue

for the Fund.

The Board is in the process of undertaking a study to explore more new sources of

revenue for the Fund based on regional and international best practices to be proposed

to the Government for consideration. Such sources may include: weight distance

charges, commercialization of road reserve; re-introducing Goods Vehicle Licence Fees

and introduction of motor vehicles insurance levy. The study will be financed by the

African Development Bank (AfDB).

During the year under review, the performance of TANROADS was good in terms of

quality of works as well as absorption capacity. The performance of Local Government

Authority was inadequate which could be associated with institutional arrangement and

legal framework. I would call upon the Government to consider carrying out reforms in

the Prime Minister’s Office, Regional Administration and Local Government for the purpose

of improving capacity and management of district, feeder and urban roads. The

Government may wish to establish Rural Roads Agency comparable to TANROADS.

The Board is developing the Fund’s Five Year Strategy Plan (2014/15 -2018/19) that builds

on the success and challenges of the Three Year Board’s Strategic Plan that covered the

period 2011/12–2013/14. The Strategic Plan will be used as a management tool in

monitoring road maintenance performance and ensuring that action plans are


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implemented on timely basis in order to meet ambitions and aspirations of the

Government, road users and the general public as far as road maintenance is concerned.

I would like to commend and appreciate the cooperation extended to the Roads Fund

Board by Tanzania Revenue Authority (TRA) as revenue collector. I would also like to

extend my sincere gratitude to Energy and Water Utilities Regulatory Authority (EWURA),

Tanzania Port Authority (TPA) and Petroleum Import Coordinator (PIC) for their continued

cooperation with the Board by sharing information to curb leakage of revenue. Without

their support, it would have been difficult to achieve our objective in ensuring full revenue

collection.

I would like to extend my thanks to development partners who showed interest to finance

roads maintenance under Local Government Authorities in particular DIFD, EU and

USAID. The Board would like to assure the Government, Development Partners and the

general public, that all resources directed towards road maintenance will be spent

judiciously in a transparent and accountable manner.

I call upon all stakeholders to assist the Board in ensuring that our roads are maintained

to standards. I urge the public to protect our roads against vandalism and assist to ensure

that, they are in good condition and safe.

Finally, I wish to thank my Board colleagues and the Secretariat for their hard work and

commitment in implementing the Roads Fund Board Strategic Plan that has been key to

the achievement of the objectives of the Board.

Mr. Joseph O. Haule

CHAIRMAN


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The Manager’s Statement

It is my pleasure to present to you the performance and achievements of the Roads Fund

Board for Financial Year 2013/14 which also marks the end of the Board’s three years

Strategic Plan that covered the period 2011/12–2013/14. During the period under review

the Board recorded success in many areas of its jurisdiction which include: collection of

revenue, timely disbursement of funds to implementing agencies and ensuring that

utilization of Roads Fund achieves value for money.

During the period under review, total revenue collection was Tshs641.2 billion compared

to Tshs447.8 billion collected in FY 2012/13. This is an increase of Tshs193.43 billion

equivalent to 43.2%. The achievement in terms of collection was partly, attributed to

adjustment of fuel levy from Tshs200 to Tshs263 per litre of petrol or diesel. The annual

collection, exceeded Annual Budget by Tshs136.93 billion equivalent to 27%.

The disbursement of funds to Implementing Agencies amounted to Tshs504.30 billion.

The amount was disbursed according to Annual Budget allocated for each Agency

whereby the Ministry of Works received Tshs34.948 billion, PMORALG Tshs149.778

billion, TANROADS Tshs314.535 billion and Roads Fund Board Tshs5.043 billion.

This was a significant performance in terms of implementation of road maintenance work

plan which is critical to the preservation of the national road asset. The impact of road

maintenance to the road condition was very significant, the percentage of roads in good

Mr Eliud T. Nyauhenga, Ag. Roads Fund Manager


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and fair condition was 88% for Trunk and Regional Roads and 57% for District, Feeder

and Urban Roads.

According to the Performance Agreement signed between the Board and Implementing

Agencies, the latter is required to spend at least 85% of released funds up to the end of

financial year. Up to 30th June 2014, TANROADS and PMORALG spent 91% and 67.5%

respectively of disbursed funds which is a reflection of absorption capacity. Achieving the

desired level of absorption capacity for Local Government authorities (LGAs), has been a

daunting challenge for many years. However, there is noticeable progress this year as

compared to previous years.

During the year under review, the Board continued to promote good governance and

transparency as a mechanism to fight corruption. The Board shared information on Roads

Fund operations with the general public through publicity materials including newsletters,

newspapers, leaflets, booklet and brochures. The Board has also used the website

(www.roadfund.go.tz) to share information including: revenue collected and disbursed

funds to Ministry of Works, Local Government Authorities, and TANROADS.

During the year under review, Roads Fund Board introduced preventive audit in addition

to conducting post technical audit of the road maintenance works. Technical audit is a

critical intervention in ensuring value for money. The advantage of preventive audit is to

detect deficiencies and correct them while maintenance works are ongoing. Two years

contracts for undertaking technical audit were executed covering the year 2013/14 to

2014/15 in 18 regions and their respective Districts/Municipal or Town Councils.

Technical and financial audits played a central role in ensuring that funds are used

judiciously and achieve value for money. The Technical and Financial Audit Reports

provided assurance to the Board on the extent to which the quality of works and financial

regulations are adhered to by Implementing Agencies. I would like to thank the

Permanent Secretary-Prime Minister’s Office Regional Administration and Local

Government and the Chief Executive –TANROADS for taking disciplinary action to officers

who contravened regulations governing usage of Roads Fund.

http://www.roadfund.go.tz/


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Despite the recorded achievements, the Board faced a number of challenges in fulfilling

its mandate as stated in the Roads and Fuel Tolls Act CAP 220. During the period under

review, we experienced delays in transfer of funds from the Ministry of Finance Accounts

to the Roads Fund Board bank accounts. Delays in disbursement of funds to

Implementing Agencies affected the timely implementation of maintenance work-plans

significantly. In order to mitigate the challenge, the Board consulted with MoF to allow

direct fund transfer from the collector to the Roads Fund Board’s bank account.

Similarly, the Roads Fund experienced shortage of technical staff, to match with the

increasing size of the Fund as well as the increased support from development partners

to finance road maintenance through RFB systems. To address the issue, the Board

reviewed the organization structure and manning levels so as to justify the number of

staff to be employed. Employment of additional staff is underway.

The financial requirements for road maintenance has been increasing at a faster rate than

the revenue collected. The financing gap is widening as a result of new roads that are

added to the network and the upgrading of some roads from gravel to paved road. The

financing gap translates into roads that are not attended and left to deteriorate. The

current sources are unable to generate enough revenue to meet increasing road

maintenance financial requirements. The Board intends to carry out a comprehensive

study on Road Users’ Charges (RUC) and identify possible new sources based on best

practices and present to the Government for decision.

On behalf of management and staff of the Roads Fund Board, I would like to extend my

sincere thanks to the Chairman of the Board and Board Members for their guidance. I

look forward to working together as a team to enable Tanzania to maintain a much better

road network.

Eliud T. Nyauhenga Ag. ROADS FUND MANAGER


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Departmental Performance Review

The Roads Fund Board has three departments and one unit, namely Finance and

Administration, Technical Services, Resource Mobilization and Internal Audit Unit. The

annual performance of each department, is stated below:

A. The Department of Finance and Administration

The Department provides general administration services for the Board, which includes

Human Resources and Financial Management. The Department is a key player in

providing support to the core functions of the Board. It provides general administration

services guided by ministerial and Treasury Registrar circulars, guidelines and Board’s

Financial and Staff Regulations. It facilitates staff recruitment and development.

Moreover, it plays a central role to disburse funds to MOW, TANROADS, Local Authorities

and other road agencies. The Department facilitates preparation and implementation of

the Board’s budget, ensures harmonized cash flow to support the Board’s operations.

Furthermore it ensures effective financial controls and harmonize Fund’s revenue vis a

vis expenditure. During the year under review, the Department achieved the following:

Disbursement of Tshs314.535 billion was made to TANROADS, Tshs149.778 billion

to PMORALG, Tshs34.948 billion to MoW, and RFB got Tshs5.043 billion;

Facilitated recruitment of three members of staff;

Four members of staff attended short-courses, Two staff members are undertaking

long courses and one staff member completed a long course on Monitoring and

Evaluation;

The study on organization structure and manning level of RFB was done and the

same was reviewed and approved by the Board and submitted to the Treasury

Registrar for final approval;

Reconciliation of revenue collected by TRA and disbursed by Ministry of Finance to

RFB bank account was done;

Eight Committee meetings and five ordinary Board meetings were facilitated;


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Office operations including statutory payment and incentives packages for staff in

accordance with RFB financial regulations were facilitated; and

Organized and facilitated sensitization seminar on gender issues

B. The Department of Technical Services

The overall objective of the Department is to provide assurance to the Board, the

Government, Development Partners and other interested parties that resources

earmarked for road activities from the Roads Fund are spent judiciously and Value for

Money is realised. Its primary function is to undertake technical audit and monitor the

use of funds disbursed for the purpose and objectives of the fund. It is also responsible

for developing and reviewing periodically the formula for Allocation and disbursement of

Funds to TANROADS, Local Authorities and other road agencies and advice the Board

accordingly. The Department also prepares the Performance Agreements and ensures

that they are signed by the Board and implementing agencies. During the year under

review:

Technical audit was done to 18 regions and it was observed that 98% of projects

implemented by TANROADS achieved Value for Money in FY 2013/14 compared

to 97% achieved in 2012/13. PMORALG achieved 95% in FY 2013/14 compared

to 96% in FY 2012/13;

Value for Money Manual to assist users of the Value for Money instrument was

developed and put in use;

Information dissemination was undertaken on best practices in roads maintenance

management and road works. The Board facilitated training on new type of

pavement called “Super pave” which withstands heavy loaded trucks more than

the normal pavements. The training was conducted by the Council for Scientific

and Industrial Research (CSIR) of South Africa and involved engineers from

TANROADS, PMORALG and RFB; and

Construction of office building in Dodoma continued to be facilitated


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C. The Department of Resources Mobilization

The responsibility of the Department is to formulate strategies and mobilise resources for

the Roads Fund. The strategies include to undertake studies to explore possibilities to

broaden revenue sources and adjustment of rates for existing fuel tolls. It undertakes

studies to identify possible revenue leakage areas and advise on mechanisms to curb

such leakages.

It is further responsible to set out procedures for agents with respect to the collection of

roads tolls for the purpose of the Fund. It is also responsible for ensuring full collection

and transfer of collected roads toll to the Fund’s account and sets out regulations for

collection of road fund. During the year under review the following was achieved:

Total revenue collection was Tshs641.2 billion which exceeded the annual budget

by Tshs136.93 billion equivalent to 27 %;

Prepared a Proposal to broaden revenue base for the Fund and submitted it to the

MoF for consideration. Based on it, the Government approved adjustment of

chargeable fuel levy rate from Tshs200 to 263 per litre of petrol or diesel equivalent

to 31.5%;

Secured commitment from donors for funding road maintenance whereby DFID

agreed to finance road maintenance activities under local Government authorities

to the tune of GBP 25 million. USAID continued to undertake due diligence of RFB

after which decision on funding will be decided and agreed upon;

Follow-up with the MoW on operationalisation of motor vehicle inspection fees was

done following its approval by the Government as a new source of revenue for the

Roads Fund;

Establishment and operationalization of Roads Fund Board Management

Information system was done;

A study on pattern of fuel importation and usage was done which identified areas

of improvement to increase efficiency in fuel levy collection; and


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The Report of the consultancy service with regards to collection of secondary data

on road network was finalised. The data collected are to be used as an input to

RONET to facilitate revision of allocation formula.

D. The Internal Audit Unit

The Internal Audit Unit is responsible for reviewing periodically the internal control

systems and recommend improvement. It audits Board’s accounts and procurement

activities and prepares quarterly audit reports for the Board’s decisions.

The Internal Auditor reports to the Roads Fund Manager all matters of audit queries as

required by Government financial and procurement regulations and legislations. The

Internal Audit Unit also coordinates the Fund’s audits by external auditors and also is

responsible for registering the Board’s assets and supervises Board of Survey activities as

directed by the Roads Fund Manager.

During the year under review the following were achieved:

Carried four quarterly internal audits and reported to the Board. The audit covered

fixed asset management, procurement, staff payroll, risk management process,

compliance with policies, regulations and laws;

Reviewed financial statements for the period ending 30th June 2013 and

Coordinated external audit for Financial Statements of FY 2012/13 conducted in

October 2013.


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PART ONE: REPORT OF THE

DIRECTORS


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PART ONE: REPORT OF THE DIRECTORS

1.0 INTRODUCTION

The Roads Fund Board of Directors present this report and the financial statements for

the year ended 30th June, 2014, which disclose the state of affairs of the Roads Fund.

This Report has been prepared in accordance with the Tanzania Financial Reporting

Standard No. 1.

1.2 LEGAL CONTEXT

The Roads Fund Board is a government institution established by the Road and Fuel Tolls

Act CAP 220 under the Ministry of Works. The Board is mandated to manage the Roads

Fund by ensuring that there is full collection of revenue, timely disbursement of funds

and monitoring utilization of the same to implementing agencies which are MoW,

PMORALG, and TANROADS.

1.3 VISION AND MISSION

Vision Statement:

To be among the best internationally recognized institutions in Roads Fund Management

Mission statement:

To provide sustainable funding for road maintenance to implementing agencies through

collection, disbursement and monitoring its utilization for social economic wellbeing of

the public.

1.4 PRINCIPLE FUNCTIONS

The principal functions of the Roads Fund Board as stipulated in the Roads and Fuel Tolls

Act, Cap 220 includes the following:

(i) To advise the roads Minister on new sources of roads and fuel tolls, adjustment of

rates of existing tolls and on regulations for the collection of road tolls for the purpose

of ensuring an adequate and stable flow of funds to road operations;

(ii) To apply the money deposited into the Fund for the purposes approved by the

Parliament;


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(iii) To set out procedures for agents with respect to the collection of roads and fuel tolls

for the purpose of the Fund;

(iv) To ensure full collection and transfer of collected roads and fuel toll to the Fund’s

account;

(v) To develop and review periodically the formula for allocation and disbursement from

the Fund to TANROADS, local authorities and other road agencies and advice the

roads Minister accordingly;

(vi) To recommend to the roads Minister an allocation of funds for TANROADS, local

authorities and other road agencies to undertake road management at a level that is

suitable and affordable;

(vii) To disburse funds from the Fund to TANROADS, local authorities and other road

agencies;

(viii) To ensure that the operations of TANROADS, local authorities and other road

agencies and the Fund are technically and financially sound;

(ix) To monitor the use of the funds disbursed to TANROADS, local authorities and other

road agencies for the purpose of the objects of the Fund;

(x) To appoint the Roads Fund Manager and Roads Fund Accountant;

(xi) To appoint, subject to approval by the Controller and Auditor General an auditor or

auditors to carry out the audit of the Fund; and

(xii) To make any other recommendations to the roads Minister as it considers necessary

to enable the Board to achieve its objectives.

1.5 PERFORMANCE AGREEMENTS

The Roads Fund Board is required to enter into performance agreements with the PS-MoW,

PS-PMORALG, Chief Executive of TANROADS or other agency to which money from the Fund

is disbursed. This is the basis for financing and monitoring of programmes of works.

1.6 COMPOSITION OF THE ROADS FUND BOARD OF DIRECTORS

The Board has nine members, four from the public sector and five from the private sector.

Members from the public sector constitutes: the Permanent Secretaries of the Ministry of

Works (PS-MoW), Ministry of Finance (PS-MoF), Prime Minister’s Office Regional


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Administration and Local Government (PS-PMORALG) and Director of Roads from

Ministry of Works (DR-MoW).

The representatives from the private sector come from: Tanzania Truck Owners

Association (TATOA), Tanzania Association of Tour Operators (TATO), Tanzania Chamber

of Commerce, Industry and Agriculture (TCCIA), and Tanzania Confederation of Co-

operatives (TFC).

The Chairman of the Board of Director is appointed by the President of the United

Republic of Tanzania. The appointment of the rest of the Members is done by the Roads

Minister in consultation with road users association as stipulated in the Act. The Chairman

of the Board and Members may, unless he/she resigns or his/her membership is otherwise

terminated, hold office for a maximum of two consecutive terms of three years each.

The Roads Fund Manager (RFM) who is the Secretary to the Board is appointed by the

Board. The tenure of Manager is five years renewable upon satisfactory performance.

The list of RFB Board Directors and the Secretary who served the Board during the year

of this Report is shown in Table 1.1 below.


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Table 1.1: RFB Board Directors and the Secretary who Served up to 30th June 2014

Sn Name Position Qualification/

Discipline Institution

Appointment

date

1 Dr. James Wanyancha Chairman PhD Private Sector 03.06.2011

2 Eng. Musa I. Iyombe Member MSc PS-MoW 10.10.2013

3 Dr Servacius Likwelile Member PhD PS-MoF 10.10.2014

4 Mr. Jumanne A. Sagini Member M.A PS-PMORALG 10.10.2015

5 Eng. Ven K.

Ndyamukama Member MSc DR-MOW 10.10.2016

6 Mr. Fulgence Bube Member Advanced

Diploma TATOA 23.04.2012

7 Mr. Willigis Oswald

Mbogoro Member M.A TFC 13.01.2012

8 Mr. Leopold B.

Kabendera Member Diploma TATO 21.12.2012

9 Eng. Peter Chisawillo Member MSc TCCIA 13.01.2012

10 Joseph O Haule Secretary M.A Ex-Officio 01.02.2000

1.7 CORPORATE GOVERNANCE

Commitment to good governance

The Roads and Fuel Tolls Act CAP 220 provides the Board of Directors for the overall

guidance and direction of the Board. The Directors are committed to the principles of

good corporate governance and recognise the need to conduct the business in


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accordance with generally accepted best practices. In so doing, the directors, therefore

confirm that they:

Commit themselves to zero tolerance to corruption;

Attend meetings regularly throughout the year;

Are Committed and responsible for making major decisions, including policy and

setting “Tone at the Top”;

Accept and exercises responsibility of strategic and policy decisions, approval of

the budgets and monitoring of performance;

Commit themselves to bringing skills and experience from their spheres of business

to complement the professional experience and skills of the management team;

Committed to transparency, accountability and fairness in an organisation's

relationship with its all stakeholders (Government, Implementing agencies,

Management, employees, and the general public); and

To carry out theoversight role on the affairs related to management of the Fund.

Board and Committees Meetings

The Roads and Fuel Tolls Act requires the Board of Directors to meet at least 4 times a

year. During the financial year under review, they met to:

Formulate policies and strategies of the Roads Fund Board;

Formulate Guidelines on utilization of Roads Fund;

Review the RFB Business Plan and its implementation;

Review budgets and quarterly implementation progress reports on road

maintenance from implementing Agencies;

Review Technical and Financial Audit Reports, Internal Audit and Risk management

Reports;

Reviewed and provide guidance on the proposal to increase revenue base for the

Fund before submitting to the Ministry of Finance;

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Review the Draft Amendment and Regulations of the Roads and Fuel Tolls Act,

Cap 220; and

Review reports on monitoring of emergency works.

During the Financial Year 2013/14, the Board conducted four ordinary and four extra

ordinary Board meetings. The Board meetings were superseded by the Committee

meetings which considered the reports and recommend to the Board to make appropriate

decisions. The Board had two committees which are:

Technical, Financial and Administration Committee (TFAC); and Risk Management and

Audit Committee (RMAC). Table 1.2 summarizes the meetings

Table 1.2: Attendance and Meetings Held in FY 2013/14

Sn Name of Director Number of Meetings

Full Board TFAC ARMC

1. Dr. James Wanyancha 8 N/A N/A

2. Eng. Musa I. Iyombe 6/8 N/A 4/4

3. Dr. Servacius Likwelile 4/8 4/4 N/A

4. Mr. Jumanne A. Sagini 7/8 4/4 4/4

5. Eng. Ven K. Ndyamukama 6/8 4/4 N/A

6. Mr. Fulgence Bube 7/8 N/A 4/4

7. Mr. Willigis O. Mbogoro 6/8 N/A 3/4

8. Mr. Leopold B. Kabendera 8/8 4/4 N/A

9. Eng. Peter Chisawillo 5/8 4/4 N/A

10 Mr. Joseph O. Haule 8/8 4/4 4/4


19

Terms of Reference for Technical, Financial and Administration Committee

The objective of the committee is to review critically all aspects related to Technical,

Finance and Administration and recommend to the Board for decision. The specific tasks

of this Committee include to:

(i) Review operational plans of implementing agencies and RFB;

(ii) Review roads maintenance Progress Reports from Implementing Agencies;

(iii) Review the Strategic Plan of the Roads Fund Board and its implementation report;

(iv) Review the technical and preventive audit reports;

(v) Review and consider emergency requests from Implementing Agencies;

(vi) Review progress reports on Roads Fund Collections and disbursement;

(vii) Review reports with respect to improving revenue collection including study

reports;

(viii) Review Roads Fund Board financial and staff regulations;

(ix) Deal with staff matters including employment, disciplinary, confirmation and

benefits;

(x) Review annual and quarterly financial budgets of RFB, TANROADS, LGAS and

Ministry of Works;

(xi) Consider any other matters, as may be delegated from time to time by the Board;

and

(xii) Report and recommend to the Board all issues from item (i) to (xi) for necessary

action and decision.


20

Table 1.3: The list of TFAC Members who served in FY 2013/14

Sn Name Position Qualification/Discipline

1 Eng. Peter Chisawillo Chairman MSc

2 Mr. Leopold B. Kabendera Member Diploma

3 Dr. Servacius Likwelile Member PhD

4 Mr. Jumanne A. Sagini Member M.A

5 Eng. Ven K. Ndyamukama Member MSc

6 Eng. Ronald Lwakatare Secretary MSc

Terms of Reference for the Risk Management and Audit Committee

The objective of the committee is to review critically all aspects related to risk

management and audit. The specific tasks include to:

(i) Review reports from the Roads Fund Board Audit Committee on matters related

to audit reports and financial statement;

(ii) Review internal audit reports;

(iii) Consider any other matters, as may be delegated from time to time by the Board;

and

(iv) Report and recommend to the Board all issues from item (i) to (iii) for decision.


21

Table 1.4: List of ARMC Members who served in FY 2013/14

Sn Name Position Qualification/Discipline

1 Mr. Willigis O. Mbogoro Chairman M.A

2 Eng. Musa I. Iyombe Member MSc

3 Mr. Jumanne A. Sagini Member M.A

4 Mr. Fulgence Bube Member Advanced Diploma

5 James Ayub Secretary CPA

1.8 ROADS FUND BOARD MANAGEMENT

The Management of the Roads Fund Board under the leadership of the Roads Fund

Manager (RFM) is organised in three departments as follows:

Finance and Administration Department, headed by Deputy Manager–Finance and

Administration (DMFA);

Technical Service Department, headed by Deputy Manager–Technical Services

(DMTS) and

Resources Mobilisation Department, headed by Deputy Manager –Resource

Mobilization (DMRM)

There is one staff functions under the Roads Fund Manager as follows:

Internal Audit Unit, headed by Head of Internal Audit (HIA)


22

Table 1.5: Name and Designation of RFB Management Team in FY 2013/14

S/N Name Designation

1 Mr. Joseph O Haule Roads Fund Manager

2 Mrs. Rose Masenga Deputy Manager - Finance and Administration

3 Eng. Ronald Lwakatare Deputy Manager – Technical Services

4 Mr. Eliud Nyauhenga Deputy Manager – Resource Mobilization

5 Mr. Ayub James Head Internal Auditor

1.9 PERFORMANCE OF THE ROADS FUND

The approved Roads Fund budget for FY 2013/14 was Tshs504.31 billion compared to Tshs429.66

billion allocated in FY 2012/13. Although the amount was not disbursed 100% by 30th June 2014,

(as shown in Part Two to Four) the balance was released at a later dates to meet the annual

allocated budget. The allocation of approved budget for the implementing agencies is shown in

Table 1.6 below:

INSTITUTION 2009/10 2010/11 2011/12 2012/13 2013/14

TANROADS 177.46 180.28 197.43 267.98 314.54

PMORALG 84.51 84.51 94.02 127.61 149.78

Ministry of Works 19.72 19.72 21.94 29.78 34.95

Roads Fund Board 2.41 2.41 3.17 4.29 5.04

Total 284.10 286.91 316.55 429.66 504.31

Table 1.6:Roads Fund Budget Allocation to Implementing Agencies (in Tshs Bil.)

Provision of sufficient funds for road maintenance is critical for sustainable roads, safer

road network around the country and protection of road asset against deterioration.

Performance of the Fund is therefore assessed based on the extent to which it achieves

its objective in terms of providing sufficient funds for financing road maintenance. The

performance is measured by a set of indicators as listed in Table 1.7. The Indicators

were developed under the Road Maintenance Initiative (RMI) under the sponsorship of

World Bank.


23

Table 1.7: List of Indicators to measure the Roads Fund Performance

NO Indicators Remarks

i Percentage of Revenue collection to annual

budget

Measures capacity of revenue sources to meet

annual road maintenance work plan

ii Percentage of Disbursement to annual

budget

Assesses Government commitment to ensure

approved annual maintenance budgets is

implemented

iii Percentage Share of Fuel Levy to Roads Fund Measures the degree of dependence on fuel levy as

source of revenue for road maintenance

iv Percentage share of Roads Fund to Road

User Charges

Measures of the Government commitment to

reform revenue sources for road maintenance. It

also indicates existence of possibility of increasing

number of revenue sources.

vi Percentage Coverage of Routine

Maintenance needs

Measures the degree of road asset preservation

vii Percentage Coverage of Periodic

Maintenance needs

Measures the degree of road asset preservation

viii Percentage coverage of total maintenance

needs

Measures the degree of overall road asset

preservation

(i) Percentage of Revenue Collection to Annual Budget

Overall, the Roads Fund revenue has been increasing overtime, whereby the total

revenue collected increased from Tshs 447.8 billion in FY2012/13 to Tshs 641.23 billion

in FY 2013/14 equivalent to 43.2%. The substantial increase of revenue was partly due

to change of chargeable fuel levy rate from Tshs 200/ to Tshs263 per litre of petrol or

diesel. Fuel levy collections contributed Tshs626.02 billion, equivalent to 97.6% while

transit charges and overloading fees contributed only one percent and 1.4 percent

respectively.


24

The total annual budget was Tshs 504.3 billion. The total revenue collection exceed

annual budget by Tshs 136.93 billion equivalent to 27% as shown Table 1.8 below.

This is a reflection that revenue sources were able to meet annual road maintenance

work plan, but not necessarily meet the entire road maintenance financial requirements.

Source/FY 2009/10 2010/11 2011/12 2012/13 2013/14

Fuel levy 256.05 314.84 391.00 434.47 626.02

Transit Charges 3.67 4.69 5.77 5.41 6.52

Overloading fees 6.83 6.25 10.00 7.94 8.69

Total Revenue Collection (a) 266.55 325.78 406.77 447.82 641.23

Total Annual Budget (b) 284.10 286.91 316.55 429.66 504.30

Difference: Rev. Collection and Annual Budget (17.55) 38.87 90.22 18.16 136.93

Difference (-/+) as % of Annual Budget -6% 14% 29% 4% 27%

Table 1. 8: Comparison between Revenue Collected and Annual Budget (in Tshs Bill.)

Source: Roads Fund Board

(ii) Percentage of Disbursement to Annual Budget:

This indicator assesses Government commitment to ensure approved annual maintenance

budgets are implemented. During the period under review, the approved maintenance

budget was disbursed as shown in Table 1.9 below. The percentage of disbursement

over annual budget has been 100 percent and above reflecting the Government

commitment to ring-fencing resources earmarked for road maintenance.

Activity/FY 2009/10 2010/11 2011/12 2012/13 2012/14

Annual Budget (B) 284.10 286.90 316.55 429.66 503.30

Annual Collection (c) 266.50 314.00 406.77 447.82 641.20

Disbursement (D) 287.10 287.72 335.99 429.66 503.30

% D/B 101% 100% 106% 100% 100%

Table 1.9: Comparison between Annual Disbursed Funds and Approved

Budgets (Tshs in Bill)

Source: Roads Fund Board


25

(iii) Percentage Share of Fuel Levy to Roads Fund:

The indicator assesses the level of reforms as per the Road Maintenance Initiative. It

measures the level of diversification of revenue sources for the Roads Fund as well as

degree of dependency on fuel levy as a source of funds for road maintenance. During

FY 2013/14, fuel levy contribution to the Fund was 97.6% as shown in Table 1.10. It

means that there is over-reliance on fuel levy as a source of road maintenance financing

which is too risk. There is a need to diversify sources of revenue for sustainable roads.

SOURCE/FY 2009/10 2010/11 2011/12 2012/13 2013/14

Fuel levy 256.00 314.80 391.00 434.47 626.00

Transit charges 3.70 4.70 5.77 5.41 6.52

Overloading Fees 6.80 6.20 10.00 7.94 8.62

Total Roads Fund (RF) 266.50 325.70 406.77 447.82 641.14

% share of Fuel levy to RF 96.1 96.7 96.1 97.0 97.6

Table 1.10: Comparison between Revenue from Fuel Levy and Roads Fund (in Tshs

Bil.)

(iv) Percentage share of Roads Fund to Road User Charges

Road User Charges (RUC) refers to taxes, levies and fees paid by road users as they use

roads while Roads Fund refers to revenue sources that contribute to the Fund. The

indicator measures the Government readiness to commit taxes/levies paid by road users

for roads maintenance which include Motor Vehicle Registration Fees and Annual Motor

vehicle Licence Fees. In the last five years, RUC has been higher than RF, because

revenue from Motor vehicle Registration Fees and Annual Motor vehicle Licence Fees does

not form part of Roads Fund revenue sources although it is paid by road users. The two

sources contribute revenues to the Consolidated Fund to meet other government

obligations.

During FY 2013/14, only 73% of taxes, levies and fees paid by road user were used for

road maintenance as shown in Table 1.11. Since the share of RF to RUC is below 100

percent, it indicates that the Government could expand the revenue base for the RF from

RUC sources.


26

SOURCE/FY 2009/10 2010/11 2011/12 2012/13 2013/14

Fuel levy 256.00 314.80 391.00 434.47 626.00

Transit charges 3.70 4.70 5.77 5.41 6.52

Overloading Fees 6.80 6.20 10.00 7.94 8.62

Total Roads Fund (RF) 266.50 325.70 406.77 447.82 641.14

Motor vehicle Registration Fees 31.60 41.40 81.75 123.23 139.31

Annual Motor vehicle License Fees 1.10 14.00 27.65 80.30 93.30

Total Road Users' Charges (RUC) 299.20 381.10 516.17 651.34 873.75

% share of RF to RUC 89.1 85.5 78.8 68.8 73.4

Table1.11: Comparison between Roads Fund Revenue and Road User Charges (in Tshs Bil.)

Source: Roads Funds Board

(v) Percentage Coverage of Routine Maintenance Needs:

The indicator assesses the level of asset preservation through routine maintenance.

Routine maintenance is a critical intervention in road asset preservation as it is done

continuously throughout the year. The activities done under routine maintenance include

grass cutting, drain cleaning, culvert and bridge cleaning and maintenance, road furniture

and bridge guide rails maintenance, paved road patching, edge repair, crack sealing, line

remarking, unpaved road grading, shaping, and pothole repairs.

In the last five years, routine maintenance needs and allocated budget has been

increasing in absolute terms. Nevertheless, the overall coverage of routine maintenance

has been declining steadily which is not healthy for sustainability of roads. Although

revenue collected in absolute terms has increased on one hand, the size of the roads

network to be maintained and cost per unit on other hand has also increased at a faster

rate leading to insignificant impact from the increased revenue.

Over time, percentage coverage for routine maintenance indicated a declining trend.

During FY 2013/14 the allocated budget only covered 53.3% of routine maintenance

financial requirements as shown in Figure 1.1


27

Source: Roads Funds Board

(vi) Percentage Coverage of Periodic Maintenance Needs:

Periodic Maintenance is a critical intervention in road asset preservation and it is highly

required as the road pavement ages. This is so because roads become more fragile and

less resilient at the old age. Activities done under periodic maintenance on paved roads

include resealing, overlays of less than 100mm, fog sprays and shoulder re-forming.

Depending on the design of pavement, this is carried out at intervals of 5 to 8 years so

as to prolong the life span of the road. Figure 1.2 below shows comparison between

periodic maintenance needs and the allocated budget for it as well as the respective

percentage coverage.

The percentage coverage of periodic maintenance has been generally increasing

overtime. In FY 2013/14 the coverage was 78.7%. Inadequate funding for periodic

maintenance is a daunting challenge to the road condition and thereafter to the socio-

economic development. There is an urgent need to broaden the revenue base for the

Roads Fund by identifying new revenue sources.

73.0 80.5 96.3 135.5 151.851.0 51.7 57.4 71.0 80.9

69.9% 64.2% 59.6%52.4% 53.3%

0.0%

20.0%

40.0%

60.0%

80.0%

-

50.0

100.0

150.0

200.0

2009/10 2010/11 2011/12 2012/13 2013/14

% o

f co

vera

ge

Tsh

s in

Billio

n

Financial Years

Figure 1.1: Comparison Between Routine Maintenance

Needs Against Budget and its % Coverage

Routine Maint. Needs (TZS in Bil) Routine Alloc. Budget (TZS in Bil)

% Coverage


28

Source: Roads Fund Board, TANROADS and PMORALG

(vii) Percentage Coverage of Total Maintenance needs:

This indicator assesses the level of overall asset preservation. It covers aspects of spot

improvement, emergencies, bridge maintenance, supervision related costs, routine and

periodic maintenance. Figure 1.3 below compares total maintenance needs against

allocated budget and its share of coverage over five years. During the year under review,

coverage was only 53.4%.

Source: Roads Fund Board, TANROADS and PMORALG

174.8 192.3 205.2 243.2 270

111.2 111.4 122.8 178.9

212.4

63.6% 57.9% 59.8%73.6% 78.7%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

-

100.0

200.0

300.0

2009/10 2010/11 2011/12 2012/13 2013/14

% C

ove

rage

Tsh

s in

Bill

ion

Financial Years

Figure 1.2: Comparison between Periodic Maintenance

Needs Against Budget and its % Coverage

Periodic. Maint. needs (in Tshs Bil) Periodic Alloc. Budget (in Tshs Bil) % coverage


29

In the last five years, total maintenance needs and respective budget has been increasing

in absolute term but with the budget that do not cover fully the financial requirements.

Inadequate funding for overall maintenance is a serious problem as roads that do not get

maintenance in time, deteriorate to the extent that it will require more expensive

interventions.

1.10. PREVENTIVE TECHNICAL AUDIT

During the year under review, the Board engaged independent consultants to undertake

preventive technical audit for the ongoing roads maintenance works implemented by

MoW, PMORALG and TANROADS in 18 regions. The objective of the audit was to ensure

that there was value for money in the utilization of roads fund. The finding of technical

audit are in PART FIVE of this Report.

1.11. MONITORING OF UTILIZATION OF ROAD FUNDS

During the year under review, Roads Fund Board Staff carried out monitoring of works

on sample basis. The objective was to assess the quality of works and overall

implementation of road maintenance programmes according to the Performance

Agreement signed between the Roads Fund Board and Implementing Agencies. The

monitoring provided useful information in terms of adherence to provisions of the

Performance Agreement signed between the RFB and Implementing Agencies.

1.12 LOCAL AND INTERNATIONAL RELATIONS

The RFB continued to maintain relations with its stakeholders, general public, local,

regional and international organizations. The Board remained an active member of

African Road Maintenance Fund Association (ARMFA) including International Road

Federation (IRF) and World Road Association (PIARC).

1.13 SOLVENCY

The Roads Fund Board confirms that applicable accounting standards have been followed

and that the financial statements have been prepared on a going concern basis. The

Board has reasonable expectation that the Roads Fund has adequate resources (human

and capital) to continue in operational existence for the foreseeable future.


30

1.14 CAPITAL MANAGEMENT

The primary objective of the Board`s capital management is to ensure that it maintains

a strong assets base in order to support its objectives and maximize achievement of

stakeholders expectations. This objective remained intact during the financial year,

2013/14. The RFB capital includes Accumulated Surplus, Capital fund and Reserves.

1.15 RESOURCES NOT REPORTED ELSEWHERE

During the Financial Year 2013/14, the Roads Fund Board had 15 employees; however,

the Act allows the Board to outsource some services. The human capital comprised of

competent and well qualified staff in various operational areas. The position of employees

provides assurance to the Board towards achievement of its strategic goals. Furthermore,

during the year under consideration, the Board had sufficient funds to fulfil its financial

commitments. In addition, the Board had reasonable expectations that the Government

of Tanzania (GoT) and Development Partners would avail the funds for financing the

Boards` planned activities for 2013/14. In that regard, the Board was considered to have

adequate resources to continue with its core operations.

1.16. RISK MANAGEMENT AND INTERNAL CONTROLS

The Roads Fund Board accepts final responsibility for the risk management and internal

control systems of the Fund. It is the duty of management to ensure that adequate

internal financial and operational control systems are developed and maintained on an

ongoing basis in order to provide reasonable assurance regarding:

The effectiveness and efficiency of operations;

The safeguarding of assets;

Compliance with applicable laws and regulations;

The reliability of accounting records;

Business sustainability under normal as well as adverse conditions; and

Responsible behaviours towards all stakeholders.

The Roads Fund Board assessed the internal control systems throughout the Financial

Year ended 30 June 2013 and is of the opinion that they met accepted criteria. The Roads


31

Fund Board carries risk and internal control assessment through the Audit Committee.

The key elements of the system of internal control are as follows:

Delegation

The Roads Fund Board has delegated the day-to-day operations to Management for

execution. There is a clear organization structure, detailing lines of authority and

separation of powers and responsibilities.

Budgets

Detailed annual budgets are prepared by the Management for review by TFAC and they

are approved by the Board. The annual budgets are derived from the Roads Fund Board

Strategic Plan and Medium Terms Expenditure Framework (MTEF).

Competence

Staff skills are maintained both by a formal recruitment process and a performance

appraisal system, which identifies training needs. Also, necessary training arrangement

for both in house and external, helps to consolidate existing staff skills and competences.

Internal audit

An internal audit unit has been in place to oversee compliance with laws and regulations

governing public expenditure and procurement. The Unit assesses risk and reviews

controls and governance issues. The unit ensures that recommendations to improve

controls are followed up by the Management. The Internal Auditor reports functionally to

the ARMC and administratively to the Roads Fund Manager.

Appropriation of reserves/surplus

The Roads Fund Board is a public institution, that is, not for profit, and for that reason

there is no declaration of dividends.


32

1.17 FUTURE DEVELOPMENT PLANS

The future plans of the Roads Fund Board are elaborated in the Five Year Strategic

Plan covering 2014/15 to 2018/19. Future plans include; to:

Reduce financing gap to 25 percent by 2018 by addressing over reliance on a

single source of fund (fuel levy) by diversifying sources of funds and associate

them with improved efficiencies in the collections systems and revision of rates on

the existing sources;

Strengthen monitoring of revenue collection and utilization of funds;

Undertake Preventive Technical Audit to cover the entire country (mainland) on

sample basis;

Establish a Management Information System where all information about Road

Maintenance and needs would be captured and stored;

Link RFB MIS with stakeholders management information systems such as TRA,

EWURA, TPA, PIC, TANROADS, PMORALG and MoW;

Establish business recovery plan;

Link RFB MIS with weighbridge management system to monitor collection of

overloading fees at the stations around the country in real time; and

Establish RFB’s head office in Dodoma.

1.18 GENDER PARITY

The Roads Fund Board is an equal opportunity employer. It gives equal access to

employment opportunities and ensures that the best available person is appointed to any

given position free from discrimination of any kind and without regard to factors like

gender, marital status, tribe, religion and disability which does not impair ability to

discharge duties. As at 30 June 2014 the Board had the following distribution of

employees by gender.


33

Gender June 2014 %

Female 5 36

Male 9 64

TOTAL 14 100

1.19. RELATED PARTY TRANSACTIONS

All related party transactions and balances, including directors emoluments are disclosed

in Note 25 to these financial statements.

1.20 ENVIRONMENTAL CONTROL PROGRAM

The Board has established Management Information System to facilitate sharing

information as a mechanism to reduce paper usage. It also monitors its activities and is

keen enough to ensure that wastes generated by its operational offices are properly

managed and do not affect the environment.

1.21 DONATIONS

During the Financial Year 2013/14, there were no charitable or political donations.

1.22 ACCOUNTING POLICIES

A summary of key accounting policies is provided in Note 1 to the financial statements.

1.23 EMPLOYEES WELFARE

Management and employees’ relationship:

The relationship between the Management and employees was good. There were no

unresolved complaints received by the Management from the employees during the year.


34

Training of employees:

Roads Fund Board has a training policy which aims to deliver cost effective training to its

staff. The objective of training is to equip employees with the requisite knowledge and

skills so as to perform their jobs professionally and advance in their careers. During the

FY 2013/14, four employees attended short-courses, two staff continued to attend long

courses and one staff completed a long course on Monitoring and Evaluation

Medical assistance:

Members of Staff together with a maximum number of four beneficiaries (dependants)

for each employee were availed with medical insurance where the employer contributes

3 percent of the employee’s basic salary.

Financial Assistance to staff with HIV/AIDS:

The Roads Fund Board has set aside a budget item to assist employees who are infected

with HIV in terms of food and medication. Up to 30th June 2014 there were no staff

diagnosed with the disease.

Employees Benefit Plan

Employees Benefit plan for FY 2013/14 included: Employer Contribution to Social Security

Fund, Health Insurance Scheme, Housing & Furniture Allowances, Transport Allowances

and Utilities. The employees benefit plan is implemented in accordance with the existing

Roads Fund Board Staff Regulations.

The Board has established a Revolving Fund whereby staff can access loans to acquire

or renovate a house and transport facility with the objective of assisting in promoting the

welfare of its employees. Staff loans are available to all confirmed employees depending

on the assessment by Management of the need and circumstance and the ability of the

individual to make payment in accordance with the existing Roads Fund Board Staff

Regulations.


35

Persons with Disabilities:

The Roads Fund Board has not recruited any person with disability. However, it is the

policy of the Roads Fund Board not to discriminate persons with disability in recruitment.

1.24 LEGAL REQUIREMENTS

The Roads Fund Board is a Government institution established by the Road and Fuel Tolls

Act Cap 220. The Roads Fund Board reports to the Ministry of Works and is obliged to

comply with the Government procedures and existing laws and regulations. During the

year under review, the Roads Fund Board complied with the applicable laws.

1.25 VOLUNTARY AGREEMENT AND WORKERS INVOLVEMENT IN TRADE UNIONS

The Board has executed a voluntary agreement with staff in the form of staff regulations

in order to enhance good industrial relation, employee welfare and retain high caliber

employees. However, there is no trade union at the Board’s place of work due to lack of

required minimum number of staff to lawfully constitute a trade union.

1.26 PREJUDICIAL ISSUES

During the year ended 30th June, 2014 there was no any serious prejudicial matters worth

reporting.

1.27 AUDITORS

The Controller and Auditor General (CAG) is the statutory Auditor of the Roads Fund

Board by virtue of Article 143 of the United Republic of Tanzania as amplified under Public

Audit Act No. 11 of 2008.

Mr. Joseph O. Haule

Signature............................... Date........................................

CHAIRMAN OF ROAD FUND BOARD


36

RFB Financial Statements and Auditors Opinion

This part of the Audit is performed by the National audit office which conducted an audit of

financial statements of Road Fund Board for the Financial Year and issued various professional

opinions. The Financial Statements are presented together with Auditors’ opinion.


37

RFB Financial Statements and Auditors

Opinion


38


39


40


41


42


43


44


45


46


47


48


49


50


51


52


53


54


55


56

PART TWO: PERFORMANCE OF THE MINISTRY OF WORKS


57

PART TWO: PERFORMANCE OF THE MINISTRY OF WORKS

2.1 Introduction

This part presents the performance of Ministry of Works with respect to implementation of

development projects related to Trunk and Regional Roads for FY 2013/14 as stipulated in the

Performance Agreement signed between Ministry of Works and the Roads Fund Board.

2.2 Annual Budget

The Ministry of Works receives funds from the Roads Fund for financing development

projects which is 10% of budget earmarked for Trunk and Regional roads. This is in

accordance with Section 4 (4) of the Roads and Fuel Tolls Act, CAP 220 in respect to

national roads.

In the Financial Year 2013/14, the Ministry of Works was allocated a total of Tshs

34,948,405,800 for development projects. The operational plan covered projects related

to trunk and regional roads, ferries, road safety and environment activities, roads related

administrative activities and cross-cutting issues.

2.3 Overall Physical and Financial Performance

Up to 30th June 2014, release of funds made to the Ministry of Works was Tshs

28,973,801,546.04 which is equivalent to 82.9% of the annual budget. The cumulative

expenditure up to 30th June, 2014 was Tshs 14,137,528,154 equivalent to 40.5% of the

annual budget as shown in Table 2.1 below.


58

Activity Approved Budget Funds Released Expenditure

Trunk Roads 9,125,610,000 7,471,115,848 1,509,238,148

Regional Roads 20,192,695,800 16,873,140,414 8,592,210,000

Ferries 3,163,370,000 2,622,874,579 2,622,874,579

Roads Admin. Related Activities 1,325,370,000 1,098,791,389 1,069,266,128

Road Safety and Environment Activities 1,140,000,000 977,132,652 342,989,302

TOTAL 34,948,405,800 28,973,801,546 14,137,528,155

% of Budget 100% 83% 40%

Table 2.1: Summary of Budget, Fund Releases and Expenditure (In Tshs)

Source: Ministry of Works

Low expenditures were due to delay of procurement processes in many projects and slow

pace of implementation of some projects whose payments, were output-based. The

operational plan and implementation is elaborated hereunder.

2.4 Trunk Roads Projects

During the year under review, a total of Tshs 9,125,610,000 were allocated for Trunk

roads projects. The planned activities included:

Carrying out feasibility studies and detailed designs;

Rehabilitation of two trunk roads to bitumen standard and two (2) bridges;

Training and Technical Assistance to TANROADS;

Purchase of laboratory equipment (CML);

Conducting Environmental Impact Assessment of Rusumo Bridge; and

Monitoring and Evaluation of related activities.

As at 30th June 2014, the MoW had received Tshs 7,471,115,848 in respect of trunk roads

and had spent only Tshs 1,509,238,148 which is equivalent to 20% of the amount

received. The low expenditure is attributed to delay in procurement. The physical


59

performance of the trunk roads projects for feasibility studies and detailed designs were

at different stages of implementation as shown in Table 2.2 in pages 54-58.

2.5 Regional Roads Projects

During the year under review, a total of Tshs 20,192,695,800 were allocated for Regional

Roads projects. The planned activities were:

Upgrading of 400km to gravel standard and 31.6km to bitumen standard;

Construction of 18 bridges;

Carrying out Feasibility Study and Detailed Design of 649.4km;

Training on labour-based technology at ATTI;

Training of roads technicians, drivers and plant operator at MWTI; and

Strengthening Women Participation Activities in the Ministry.

As of 30th June, 2014 the total expenditure for Regional Roads was Tshs 8,592,210,000

which was equivalent to 51% of the received Tshs 16,873,140,414. Table 2.3 in pages

59-74 shows in detail the relevant projects financial and physical plans and their

performance during the entire period.

2.6 Ferries Projects

During the year under review, a total of Tshs 3,163,370,000 were allocated for ferries

projects. The planned activities included:

Procurement of two new ferries for Itungi Port and Kahunda – Maisome;

Procurement of ferry spare parts;

Procurement of rescue boat for Ukerewe ferries (Rugezi-Kisorya and Buolora –

Ukara); and

Monitoring and Evaluation of related activities

As of 30th June 2014, the expenditure was Tshs 2,622,874,579 equivalent to 100% of

amount released. Table 2.4 in pages 75 and 76 shows in detail projects financial and

physical plans and its performance during the entire period.


60

2.7 Roads Related Administrative Activities

A total of Tshs 1,325,370,000 was allocated to facilitate implementation of roads related

Administrative Activities such as:

Monitoring and Evaluation;

Preparation of Roads Sector Performance Indicators and Roads Sector Statistics;

Participation in regional meetings (EAC and SADC);

Co-ordination of Development of Mtwara, Central and Dar es Salaam Corridors;

Preparations of Roads Act Regulations; and

Facilitation of Technology Transfer Centre (T2 Centre) activities.

Up to 30th June, 2014 total expenditure was Tshs 1,069,266,128 equal to 97% of funds

release by the Board which was Tshs 1,098,791,389. The details for physical and

financial performance report are provided in Table 2.5 below.


2

Table 2.5: FINANCIAL PERFORMANCE OF ROADS RELATED ADMINISTRATIVE ACTIVITIES FY 2013/14

S/NO PROJECT NAME /ACTIVITY APPROVED BUDGET FUND RELEASED EXPENDITURE

1 Coordination of Monitoring and evaluation for Roads, Bridges, and Ferries,

Preparation of Roads Sector Performance Indicators and Roads Sectoral

Statistics

287,870,000 209,126,244 209,126,244

2 Participation in East Africa Cooperation Road network, SADC, COMESA-EAC-

SADC Tripartite free Trade area and Sub-Saharan Africa Transport Policy

(SSATP) for roads related meetings

180,000,000 154,665,146 154,665,146

3 Coordination of corridor development issues (Mtwara, central and Dar es

Salaam)

120,000,000 60,000,000 60,000,000

4 Coordination of Ministry’s budget and Action Plan and Preparation of Road

Sector Concept Papers and Write-ups

355,000,000 355,000,000 355,000,000

5 Preparation of Roads Acts Regulations 30,000,000 0 0

6 Preparation of Audit Reports for Roads fund Accounts, Roads Fund Operational

Plan and Roads Fund Progress Reports

92,500,000 92,500,000 92,500,000

7 Contribution to Roads Associations and Participation in Roads and Transport

Professional Bodies.

60,000,000 18,500,000 18,500,000

8 Facilitation of Technology Transfer Centre (TANT2 Centre) 100,000,000 100,000,000 80,474,739

9 Expenses for promotion and awareness creation activities on implementation

of roads, bridges and ferries projects

100,000,000 100,000,000 100,000,000

Total 1,325,370,000 1,088,791,389 1,069,266,128


2

2.8 Roads Safety and Environment Activities

During the period under review, the Roads Safety and Environment Activities were

allocated Tshs 1,140,000,000. The planned activities include to:

Participate in preparations of East Africa Community Vehicle Loads Control Bill;

Conduct study on Optimal Number of Axle Load Control at weighbridge stations;

Purchase and install CCTV cameras to 26 weighbridge stations;

Construct prototype resting station;

Support to environmental management project in the road sector;

Development of skills on road safety profession;

Conduct training for weigh in motion weighbridges;

Undertake monitoring and evaluation of road and vehicle safety.

Prepare pollution control programme on the road sector project;

Print Environmental Assessment and Management Guidelines; and

Train five Engineers and two technicians on weigh in motion weighbridges

operation and road damage control sensors.

Up to 30th June 2014, the total expenditures was Tshs 342,939,302 which is equivalent

to 30.09% of the annual approved budget and 35% of released funds. The low

expenditure was due to late procurement of CCTV camera.

2.9 Performance Challenges at the Ministry of Works

During the year under review, the MoW encountered implementation challenges as

follows:

(i) Delayed releases of funds due to delays in transfer of funds from Treasury to the

Roads Fund Board Bank Account. Dialogue are underway to ensure that funds are

transferred to the Board as soon as they are received from TRA; and

(ii) Delays on the implementation of projects especially for the trunk road projects

was a result of delay in procurement of consultants. Consultancy services are

always required for feasibility studies and detailed designs. These activities are

performed by TANROADS using the funds earmarked for roads development works


3

to be performed by the Ministry. Hence the delay was due to difficulties in

balancing between availability of funds and TANROADS work schedule.


4

TABLE 2.2: PHYSICAL AND FINANCIAL PROGRESS REPORT FOR TRUNK ROADS PROJECTS FOR FY 2013/14 (Tshs’000,000)

PROJECT NAME ANNUAL PLAN ACHIEVEMENT BUDGET

FUNDS RELEASED

SPENT

REMARKS

Feasibility Study and Detailed Design of Bagamoyo - Saadani - Tanga road (178km)

Completion to final report

The draft Detailed Design report has been submitted by M/s Aurecon and reviewed by TANROADS. Finalization for preparation of Design report to incorporate the comments is in progress

50 42 0

Consultancy Services for Detailed Design of Sumbawanga-Matai-Kasanga Port/Matai-Kasesya Border (50km)

Completion to final Design Report

The final design report was not received as procurement for the Consultants was delayed

100 82 0

Training & Technical Assistance - TANROADS

Provision of Training and Technical Assistance

Training conducted. Two (2) staff attended HDM-4 training course in France and part of the funds were spent on training other 7 staff in the country and abroad

300 242 242 Completed as planned

Consultancy Services for Feasibility Study and Detailed Design of Ifakara - Mahenge road (67km)

Completion to Draft Final Design report

The draft final report was not received as scheduled because the project contract was not signed in time due to delayed issuance of ‘No Objection” by ADB

200 164 0


5


FUNDS RELEASED

SPENT

REMARKS

Consultancy Services for Feasibility Study and Detailed Design of Kibondo - Mabamba road (45km)

Completion to Draft Final Design report

The draft final report was not received as scheduled due to delay in procurement of the Consultant

200 164 0 Procurement was on progress. Contract signed in April, 2014.

Consultancy Services for feasibility study and detailed Design for Mpemba - Isongole road

Completion to Final Design Report

Completed 200 164 0 Completed

Consultancy Services for Feasibility Study and Detailed Design of Omugakorongo - Kigarama - Murongo road (111km)

Completion to draft final Design Report

The draft final Design Report was not submitted as planned because the procurement process of consultant was delayed.

400 329 0 Procurement was on progress. Contract signed in June, 2014

Review and preparation of standard specifications

Completion of standard specifications for bridge works and draft manual

(i) Development of the draft Standard Specifications for bridge works was completed as planned. (ii) Preparation of the manual is ongoing.

300 246 0


6


FUNDS RELEASED

SPENT

REMARKS

Consultancy Services for Feasibility Study and Detailed Design of Kyaka - Bugene - Kasulo/Benako road (124km)

Completion to final Feasibility Study

The final feasibility study report was not submitted because of delays in concluding procurement process of consultant.

400 329 0 Contract of procurement of Consultant was expected to be finalized in July, 2014

Consultancy Services for Feasibility Study and Detailed Design of Handeni -- Kiberashi - Kijungu - Kibaya - Njoro - Olboloti - Mrijo Chini - Dalai - Bicha - Chambalo - Chemba - Kwamtoro - Singida road (467km)

Completion to Final Design Report

The delayed submission of the final Design Report was due to late payment of consultancy fees and recurring vandalism of survey beacons which forced the Consultant to redo the survey as well as realignment of the Kondoa and Songe spur road.

900 790 519 Consultations on request of extension of time due to vandalism and additional scope of works is under review by TANROADS.

Upgrading to DSD Mbezi - Malamba Mawili - Kinyerezi road

Preparation of works

Contract for works signed in April, 2014 and Contractor is under mobilisation

1,000 878 0

Consultancy Services for Feasibility Study and Detailed Design of New Wami Bridge

Completion to Feasibility Study report and draft Design report

The final Feasibility Study report and draft Design report were not submitted as planned because the procurement process could not be completed on the planned time

300 246 0 Contract signed in April, 2014


7


FUNDS RELEASED

SPENT

REMARKS

Consultancy Services for Feasibility Study and Detailed Design of Kidatu - Ifakara - Lupilo - Malinyi - Londo - Lumecha/songea road

Completion to draft final Design report

The draft final Design report was not submitted as planned because the procurement of Consultant was not completed

50 44 0 The project contract signing was delayed due to delay by ADB to issue ‘No Objection’ on the evaluation report of the Technical Proposal

Road Flyovers Compensation for TAZARA and Ubungo

Completion to Compensation

The RAP as well as final detailed design reports were still under preparations

100 93 0 Compensations not yet settled

Consultancy Services for Feasibility Study and Detailed Design of Mtwara - Newala - Masasi Including Mwiti Bridge (221km)

Completion to final Feasibility Study

The final Feasibility Study report was not submitted as planned. Inception report was submitted

600 442 0 Contract signed in May, 2014

Consultancy Services for Feasibility Study and Detailed Design of Kolandoto - Lalago - Mwanhuzi - Matala - Oldeani Jct. road (328km)

Completion to Feasibility Study

The Draft final Design Report was not submitted because the procurement process could not be completed in time

500 411 0 Contract signed in June, 2014


8


FUNDS RELEASED

SPENT

REMARKS

Environmental Impact Assessment (EIA) Rusumo Bridge in Kagera Region

Monitoring and Supervision

Not Implemented as planned due to delay of receipt of funds.

50 41 41

Central Materials Laboratory

Completion of procurement of equipment

The tender documents have been finalized as planned and the procurement process is on-going

500 467 0

Preparation of Strategic Plan - TANROADS

Completion to Strategic Plan

Printing and Binding are on-going, done by a professional.

100 88 0

Monitoring and Evaluation of the Strategic Plan, Development & Maintenance Projects - TANROADS

Projects monitoring

Monitoring framework submitted 400 313 0 Not implemented. Waiting for Business Mapping study

Monitoring and other related activities (MOW)

Monitoring and Supervision

Monitoring of ongoing projects was conducted as planned

860 706 706

Consultancy Services for Feasibility Study and Detailed Design Mwanangwa Misasi - Salawe - Kahama road (149km)

Completion to Draft Feasibility Study Report

The draft final Feasibility Study was not submitted as planned due to delayed procurement of the Consultant

500 359 0


9


FUNDS RELEASED

SPENT

REMARKS

Consultancy Services for Feasibility Study and Detailed Design Itoni - Ludewa - Manda road (211km)

Completion to Draft Feasibility Report

Contract signed. Inception Report is under preparation

347 249 0 Contract signed in February, 2014

Consultancy Services for Feasibility Study and Detailed Design Arusha - Kibaya - Kongwa road (430km)

Completion to Draft Feasibility Report

The draft final Feasibility Study was not submitted as planned due to delay of procurement of the Consultant

500 359 0

Feasibility Study and Detailed Design for provision of Escarpment Ramps for long steep grades and climbing lanes along Major Trunk Roads

Completion to Final Strategic Plan Report

Not implemented due to un-completed procurement process of consultant.

270 222 0 Procurement of the Consultant is ongoing

TOTAL 9,127 7,471 1,509


10

TABLE 2.3: FINANCIAL AND PHYSICAL PROGRESS REPORT FOR REGIONAL ROADS PROJECTS FOR FY 2013/14 (TSHS MIL.)

Project Description

PHYSICAL FINANCIAL REMARKS

Target (km) / No of Brdg

Achievement % Completion

Annual Budget

Funds Releases

Expenditure % Spent

Rehab. Longido - Kitumbeine - Lengai road (Kitumbeine - Lengai Sect.) km 102.4

10.5 10.50 100% 210 169.44 210.00 100% Completed

Rehab. KIA - Majengo along KIA - Mererani road km 25

7.5 15.50 207% 150 124.56 150.00 100% Completed

Rehab. Tengeru Jct - Cairo road

7.0 7.00 100% 140 116.26 140.00 100% Completed

Rehab. Kisarawe - Masaki - Msanga - Chole - Vikumburu Road

5.0 0.00 0% 100 83.04 0.00 0% Work in Progress

Rehab. Kiparang'anda-Nyamalile-Kibululu-Magonza Road

2.5 0.00 0% 50 41.53 0.00 0% Completed

FS & DD Mlandizi - Mweneromango road

137.0 0.00 0% 120 103.95 0.00 0% RFP Invited


11

Upgrading of TAMCO - Vikawe - Mapinga to DSD road (24km)

0.7 0.00 0% 310 249.83 0.00 0% Work in Progress

Rehab of Ikwiriri - Mloka - Vikumburu road

4.0 0.00 0% 80 66.43 0.00 0% Work in Progress

Rehab. Utete - Nyamwage (32km)

2.0 0.00 0% 40 33.21 0.00 0% Completed

Rehab. Uhuru Road -1km 0.4 0.10 25% 340 276.39 0.00 0% Ongoing

Upgrading Chanika - Mbande road DSD 29.6km

0.3 0.60 200% 130 107.94 133.00 102% Substantially Completed.

Upgrading to DSD Feri - Tungi Kibada road

0.3 0.00 0% 130 107.94 154.62 119% Compensation Ongoing

Upgrading Boko - Mbweni road to DSD (6.9km)

0.5 0.00 0% 220 179.68 0.00 0% Compasation Ongoing

Rehab. Izava - Dosidosi road (15km)

5.0 0.00 0% 100 83.04 91.35 91% Completed

Upgrading of Mbande-Kongwa Junction-Mpwapwa(50km) to Paved standard

0.1 0.00 0% 200 191.78 1957.21 979% Works in Progress

Start Construction of Gulwe Bridge along

1N0 0.00 0% 200 164.07 0.00 0% Ongoing


12

Mpwapwa - Gulwe - Kibakwe - Chipogoro road

Rehab. Chibingo - Bukondo road - 37km

4.0 5.60 140% 80 66.43 74.80 94% Completed

Rehab. of Geita - Nkome - Mchangani road-13km

4.0 5.00 125% 80 66.43 73.30 92% Completed

Rehab. of Geita - Nyarugusu - Bukoli road-52.85km

4.5 5.00 111% 90 74.73 89.92 100% Completed

Upgrading to DSD Chato-Mkuyuni-Rubambangwe road


Rehab. Muganza-Kasenda 4.0 0.00 0% 80 66.43 0.00 0% Works in Progress

Rehab. Kibehe-Kikumbaitale road


DSD Upgrading.Geita Township roads


Rehab.Chato Ginnery - Bwina road 5km


FS and DD Iringa - Msembe road

104.0 208.00 200% 60 49.83 591.14 985% Works Completed


13

FS & DD Nyololo-Igowole-Kibao 40.4km


DSD Iringa -Msembe (Kalenga Jnct-Ipamba Hospital)


Rehab. Nyololo - Kibao road 40.4km

4.5 4.50 100% 90 74.73 0.00 0% Completed

Rehab. Ilula - Kilolo road km 87.6


Rehab. Kajai -Swap along Katoma - Bukwali road (9km)


Rehab. Muhutwe - Kamachumu - Muleba road 53.2km

15.0 15.00 100% 300 241.89 0.00 0% Completed

Rehab. Mamba - Kasansa road (18km)


Rehab. Mpanda - Ugala road(74km)


Rehab. Mnyamasi - Ugallla road 29.2 km

6.0 8.00 133% 120 99.64 0.00 0% Works Completed

Rehab. Inyonga - Majimoto road (135km)



14

Construction of Kangwena bridge along Simbo - Ilagala - Kalya road

1No 1No 30% 210 174.38 12.90 6% Completed

Construction of 9 bridges along Simbo - Ilagala - Kalya road

9Nos 8Nos 0% 340 276.10 136.89 40% Completed

Rehab. Kakonko - Nyaronga - Ngara Boarder

6.0 10.00 167% 120 99.65 190.00 158% Works Completed

Const. of Kikuletwa Bridge along TPC Road

1No 0.00 0% 120 99.64 0.00 0% Under procurement

Rehab of Mwembe - Myamba - Ndungu road

7.0 3.00 43% 150 124.56 104.43 70% Completed

Upgrading of Same - Kisiwani - Mkomazi road incl Mamba bridge

1.5 0.09 6% 700 578.04 51.89 7% Ongoing

Mbwemkuru - Nanjilinji - Kiranjeranje (134km)

5.0 0.00 0% 110 91.35 0.00 0% Under procument

Rehab. Nangurukuru - Liwale road

6.0 0.00 0% 120 99.64 0.00 0% Completed

Rehab. Nachingwea - Masasi road

5.0 0.00 0% 110 91.35 0.00 0% FS Completed

Upgrading to DSD Ruangwa township roads

1.7 0.00 0% 700 578.04 0.00 0% Under procurement


15

DD Lukuledi Bridge along Luchelegwa - Ndanda road


Construction of Babati - Orkesumet/Kibaya New Acess Rd- (250km)

7.0 5.00 71% 140 116.26 20.48 15% Works on progress

Rehab Kibaya - Kibereshi road (92km)

4.5 4.00 89% 90 74.73 23.17 26% Works on progress

Rehab. Nangwa - Gisambang - Kondoa Brd.

4.5 3.00 67% 90 74.73 21.48 24% Completed

Rehab Mogitu - Hydom road (68 Km)

4.5 5.00 111% 90 74.73 140.30 156% Completed

Rehab. Magara Escarpment (concrete pavement)


Rehab. Musoma - Makojo road (7km)

4.5 4.50 100% 90 74.73 14.98 17% Completed

Rehab. Balili - Mgeta - Manchimweli - Rimwani road(57km)

4.5 3.00 67% 90 74.73 0.00 0% Completed

Upgrading to DSD Bunda - Kisorya - Nansio road (Nansio - Kisorya sect.) -118.5km



16

Upgrading to DSD Mika - Utegi - Shirati road (60km)


Upgrading to DSD Tarime - Nyamwaga road - 25km (Tarime - Nyamigura Sect. ) Otta Seal

0.9 0.35 39% 410 335.46 40.00 10% Completed

Rehab Makutano ya Kinesi - Kinesi (11km)

3.0 2.00 67% 50 41.53 40.62 81% Completed

Rehab Nyamwigura-Gwitiryo road

5.0 5.00 100% 100 83.04 37.90 38% Completed

Rehab. of Gagula - Namkukwe road (57km) Construction of 3 No. structures

3.0 0.00 0% 70 58.11 0.00 0% Completed

Rehab. Mbalizi - Shigamba - Isongole (Ibaba - Shigamba Sect 9km road


Upgrading to DSD Igawa - Rujewa - Ubaruku road


Construction of Mbalizi - Makongorosi ( Mbalizi - Utengule 8km) Otta Seal

0.4 0.00 0% 180 147.53 68.00 38% Ongoing

Rehab. Ilongo - Usangu road( 36.846km)

4.0 2.00 50% 80 66.43 40.00 50% Completed


17

Raising Embakment Msangano - Tindingoma (6km section) road

4.0 2.50 63% 70 58.11 0.00 0% Completed

Rehab. Mahenge - Mwaya-Ilonga road (40km)


Upgrading Mlima Simba hills (6km) (Otta Seal) along Mahenge - Mwaya Road


Rehab Ifakara - Taweta-Madeke road (246km)


Feasibility study and Preliminary Engineering Design for Duthumi II bridge.

1No 0.75 0% 80 66.43 30.14 38% Ongoing

Rehab. Gairo-Nongwe road (74km)


Upgrading of Mahenge township roads


Upgrading to DSD Newala Township Roads (5km)

1.0 0.60 60% 340 282.34 227.00 67% Completed

Rehab.Tandahimba - Litehu Mkwiti Road



18

Constructioin of Lukwamba Bridge

1No 0.00 0% 200 169.07 61.12 31% Works in Progress

Upgrading to DSD Kinorombedo escarpment along Newala - Mwiti road

0.5 0.00 0% 120 99.64 109.40 91% Completed

Rehab. Kayanze - Nyanguge road (20.24km)

4.0 8.00 200% 80 65.43 59.42 74% Works Completed

Rehab. Kabaganga Ferry - Mugogo - Nyakabanga road (5km)


Rehab. Magu - Bukwimba Ngudu - Jojiro road (64km)

4.0 4.00 100% 80 66.43 52.58 66% Completed

Rehab. of Lumaji - Nyanshana road (14km)


Construction of Sukuma (Simiyu II) bridge along Magu - Mahaha road

1No. 0.00 0% 100 83.04 0.00 0% Under procurement

Rehab Inonelwa - Kawekamo road (29km)

4.0 4.00 100% 80 73.56 12.50 16% Completed

Rehab Mwamhaya - Itongoitale road (51km)

3.5 3.50 100% 70 58.11 22.04 31% Completed


19

Rehab.Nyambiti - Fulo road (46.97km)

3.5 7.00 200% 80 66.43 110.81 139% Completed

Rehab. Mwanangwa-Misasi-Buhingo-Ihelele road


Purchase of Motor Grader for Ukerewe roads


Rehab. Ndulamo - Nkenja - Kitulo - Mfumbi road (95km)

5.0 5.90 118% 100 83.04 93.38 93% Completed

Rehab Njombe - Ndulamo - Makete road (109.4km)

5.0 6.50 130% 100 83.04 97.04 97% Completed

FS & DD of Kibena - Lupembe - Mfuji (Moro/Iringa Brd) (125.2km)

125.0 80.00 64% 140 116.26 175.16 125% Completed

FS & DD of Njombe - Iyayi road (74km)

74.0 33.30 0% 240 199.30 0.00 0% Ongoing

Rehab of Ikonda - Lupila - Mlangali Rd (Lupila - Mlangali section)

5.0 5.00 100% 110 91.35 85.26 78% Completed

Upgrading to DSD Igwachanya township roads

1.0 0.00 0% 400 332.15 0.00 0% Under Mobilization


20

Rehab. Ntendo - Muze road (39km) Kizungu hill section to DSD


Rehab. Kasansa - Muze road (32km)


Rehab. Miangalua - Kipeta road (Miangalua - Chombe Section (19km)


Rehab Kalambanzite - Ilemba road


Rehab. Azimio - Lukumbule-Tulingane road (Lukumbule-Tulingane section (16.3km) road


Rehab.of Lilondo Quarry Plants.

set 0.00 0% 50 41.53 22.83 46% Ongoing

Opening up Londo - Kilosa Kwa Mpepo road Section (40km)


F.S and DD of Songea - Mitomoni - Mkenda road (124km)

124.0 0.00 0% 80 66.43 0.00 0% Under procurement


21

Rehab. Chamani - Matuta - Mango - Kihagara road (10km)

3.0 1.00 33% 60 49.83 41.03 68% Completed

Upgrading to DSD Kilimo Mseto - Makambi road (2km)


Upgrading to Otta Seal Hilly setions along Mtwara Pachani - Mkongo - Sasawala - Nalasi road 232km - (2km long streach)


Construction of Londo bridge approach road - Otta Seal ( 1km ) along Kitanda - Londo (Ruvuma/ Morogoro Brd)


Rehab of Kitai - Lituhi 4.0 0.00 0% 80 66.43 0.00 0% Works in Progress

Rehab. Matimira - Mkongo (11.8km)


Rehab. Mpitimbi - Ndongosi - Nambendo (63km)



22

Upgrading to Ottta Seal.Unyoni - Kipapa -Chamani-Mkoha (Mawono Escarpment) (15km)


Upgrading to DSD Shinyanga - Old Shinyanga road


Constr. Of Vented Drift along. Isagenye - Budekwa - Mabaraturu road


Kahama - Bulige - Mwakitolyo - Solwa road

2.5 1.50 60% 50 41.53 48.30 97% Completed

Rehab. Nyandekwa - Uyogo - Mwande road (Shy/Tbr brd)

3.0 3.00 100% 80 66.43 0.00 0% Completed

Rehab. Nyandekwa -Butigu road (20 km)


Rehab. Luguru - Kadoto - Malya road

7.5 7.50 100% 150 124.28 20.80 14% Completed

Rehab. Maswa - Kadoto - Shishiyu - Jija - Maligisu road

7.5 7.50 100% 150 124.56 94.95 63% Completed


23

Rehab. Mkoma - Makao road


Rehab. Soweto(Kiomboi)-Kisiriri-Chemchem road


Rehab. Mkalama-Mwangeza-Kidarafa road

8.5 8.50 100% 170 141.15 74.52 44% Completed

Construction of Msosi Box culvert and approaches along Iyumbu (Tabora brd) - Mgungira - Mtunduru - Magereza rd

1No. 0.20 20% 150 124.56 0.00 0% Works in Progress

Rehab. Tutuo - Izimbili - Usoke road (70km)

7.5 9.00 120% 150 124.56 134.70 90% Completed

Rehab. Nzega - Itobo - Bukooba road(54.5km)

8.5 10.00 118% 170 141.15 0.00 0% Completed

Rehab. Sikonge - Mibono - Kipili road


Rehab Mlalo - Mng'aro road (25km)


Rehab.Muheza - Maramba road (41km)



24

Rehab Mbaramo - Misozwe - Maramba - Kasera road (90km)


Rehab of Magamba - Mlola road Km 35.7


FS & DD of Amani - Muheza road 34km


TOTAL 1081.0 664.00 61% 18,590.00 15,707.77 7,572.40 41%

& 18brgs

MoW (Monitoring and Road Related Activities)

700.00 695.51 700.09 100%

Road Classification Activities

120.00 99.64 0.00 0%

SPECIFIC ROAD RELATED PROJECTS:

ATTI (Taking Labour Based Technology to Scale) 160.00 142.17 142.15 89%

MWTI 180.00 159.37 135.69 75%

WPU 82.70 68.68 41.88 51%

TOTAL 1081.0 664.00 61% 19,832.70 16,873.14 8,592.21 43%


25

Table 2.4: Financial and Physical Performance – Ferries Projects (Tshs’000,000)

PROJECT NAME/ACTIVITY BUDGET FUND

RELEASED EXPENDITURE REMARKS

New Kahunda - Maisome Ferry

787.95

787.95

787.95 Completion is expected by the end of July, 2014

Procurement of new ferry for Itungi Port

906.27

365.42

365.42 Site reallocation being under consideration

Procurement of Spare Parts for 19 Ferries

900.00

900.00

900.00

Spare parts procured for: MV. Kigamboni, Magogoni, Kilombero, Pangani and Kyanyabasa

Procurement of Rescue Boat for Ukerewe

469.51

469.51

469.51

Construction works were expected to commence in August 2014

Monitoring, evaluation and other related activities

100.00

100.00

100.00

Monitoring and evaluation conducted

TOTAL

3,163.73

2,622.88

2,622.88

% of Budget 100% 83% 83%


26

Auditors’ Opinion on Financial Statements of the Ministry of

Works


financial statements of Ministry of Works for the Financial Year and issued various professional

opinion. The Ministry of Works Financial Statements are presented together with Auditors’

opinion.


27


28


29


30


31


32


33


34

PART THREE: PERFORMANCE OF

PMORALG


35

PART THREE: PERFORMANCE REVIEW OF PMORALG

3.1 Introduction

This part presents the performance of the Prime Minister’s Office, Regional Administration

and Local Governments (PMORALG) with respect to road maintenance programmes carried

out during FY 2013/14 as stipulated in the Performance Agreement signed between PMORALG

and the Roads Fund Board. According to the current allocation formula, PMORALG receives

30% of the Roads Fund for road maintenance.

PMORALG through the 166 Local Government Authorities (LGAs), is responsible for

managing districts, feeder and urban roads. The Local Authorities carry out

maintenance programmes covering routine/recurrent maintenance, spot

improvement/emergency repairs, periodic maintenance and preventive maintenance

of cross drainage structures including bridges, culverts and drifts.

The budget also covers road related costs like supervision and monitoring of road

works, roads related capacity building and administration, road development projects

and emergency works.

3.2 Maintenance Budget and Expenditure

During the year under review, Tshs 149,778.8 billion was allocated to cover the costs

for maintenance of District, Urban and Feeder Roads under Local Government

Authorities as shown in Table 3.1.

Up to 30th June 2014, a total of Tshs. 138,280.22 million equivalent to 92.3% of annual

budget of Tshs 149,778.88 was disbursed to PMORALG. A total of Tshs 105,199.28

million equivalent to 84.8% of the released funds were disbursed to the councils for

roads and bridges maintenance works including supervision activities by the

District/Municipal/Town councils.


36

Physical (km) Financial Physical (km) Financial

Routine maintenance 21,001.93 23,117.60 15,254.10 16,108.19

Spot improvement 7,022.07 23,625.60 5,205.40 15,968.70

Periodic maintenance 2,551.22 57,797.40 2,268.20 33,410.74

Cross drainage structures 12,734.50 8,374.45

Supervision/inventory& Condition survey. 6,693.04 4,530.82

Monitoring PMORALG 792.93 792.93

Monitoring RS Eng. 823.88 823.88

Administration 535.19 535.19

Development Phase I 14,977.89 282.14 km & 4 Bridges 8,522.99

Emergency 5,252.13 29.1 km & 2 Bridges 1,549.80

Capacity Building 1,056.35

Consultancy Services 2,000.00

Training of LGAs & RS Engineers 372.37

Total 30,575.22 149,778.88 22,727.70 90,617.69

Table 3.1: Annual Plan and Actual Achievement (Tshs Mill)

ActivityAnnual Plan Actual Performance

Source: PMORALG, Fourth Quarter Progress Report 2013/14

3.3 Road Network and Condition

LGAs are responsible for managing the network covering 52,241km of classified roads.

However it is important to note that 56,705km under Local Government Authority are

yet to be classified which makes a total of 108,946km as shown in Table 3.2 below.


37

Surface Type Good Fair Poor Total %

Paved 746 220 151 1,118 1%

Gravel 8,268 7,502 3,471 19,241 18%

Earth 16,423 29,139 43,025 88,588 81%

Total 25,437 36,861 46,647 108,946 100%

% 23% 34% 43% 100%

Table 3.2: Local Government's Road Network And Road Condition (In Km)

TABLE 3.2: LGA’S ROAD NETWORK AND ROAD CONDITION (IN KM)

SURFACE TYPE GOOD FAIR POOR TOTAL %

Paved 746.16 220.3 151.04 1,117.50 1%

Gravel 8,267.95 7,501.85 3,471.32 19,241.11 18%

Earth 16,423.36 29,139.31 43,024.90 88,587.58 81%

TOTAL 25,437.47 36,861.46 46,647.26 108,946.19 100%

% 23.3% 33.8% 42.8% 100.0%

Source: PMORALG

During the year under review, the overall road network condition for District, Feeder

and urban roads indicates that 57.2 percent were in good/fair condition and 42.8

percent were poor. The trend of the network condition in the last five years is shown

in Figure 3.1


38

56 59 56 59 57.2

44 41 44 41 42.8

0

20

40

60

80

2009/10 2010/11 2011/12 2012/13 2013/14% o

f R

oad

Co

nd

itio

n

Financial Years

Figure 3.1: Trend of Road Condition for District, Feeder and

Urban RoadsGood/Fair Poor

Source: Roads Fund Board & PMORALG

3.4 Physical and Financial Performance

The physical performance in terms of roads maintenance (periodic, routine and spot

improvement) was 22,727.79km equivalent to 74% of the planned 30,575.22km. The

financial achievement was 61%.

Source: PMORALG and RFB

3.5 Absorption Capacity of Local Authorities

As stated above, the amount released to PMORALG was Tshs 138,280.22 million; out

of it Tshs 105,199.28 million was allocated to Councils. A total of Tshs 78,398.90

60 5668 73 74.369

62 6656 61

0

20

40

60

80

2009/10 2010/11 2011/12 2012/13 2013/14% o

f Perf

orm

an

ce

Financial Years

Figure 3.2: Trend of physical and Financial Performance -

PMORALG

Financial Performance Physical Performance


39

million, equal to 57% of the released amount, was spent for road maintenance works

leaving a total of Tshs 26,800 million as rollover funds to next financial year of 2014/15.

On top of the above rolled amount from current year disbursements, the Councils had

roll over funds from FY 2012/13 amounting to Tshs 996.80 hence making a total roll

over to FY 2014/15 equal to Tshs 27,796.8 million.

This analysis suggests that the absorption capacity of some Local Government

Authorities is relatively low and therefore needs to be addressed by strengthening its

capacity to utilize funds.

3.6 Road Development Projects

During the period under review, Tshs 14,977.8 million was allocated for development

projects. As at 30th June 2014, a total of Tshs 8,522.99 million equivalent to 57% was

spent. The reasons for under spending is delay in procurement and delayed claims from

some contractors. The other reason was the low performance capacity of contractors

leading to delay in project implementation and therefore delayed claim. The list of projects

and status are shown in Table 3.3 in pages 92-95.

3.7 Emergency Works:

During the period under review, a total of Tshs 5,252.13 million were set aside for

emergency works whereas Tshs. 5,073,781 million was disbursed to LGAs. Up to 30th June

2014, a total of Tshs 1,840.003 million equivalent to 36% of disbursed emergency funds

were spent while Tshs. 3,233.778 million rolled over to the next financial year. This is a

reflection of LGA’s low absorption capacity.

3.8 Administration, Monitoring and Inspection:

During the period under review, a total of Tshs 535.2 million were disbursed to

PMORALG to cover vehicle operation costs, maintenance and other related overheads.

A total of Tshs 510.0 million was spent on administration. A total of Tshs 792.93 and

Tshs 823.88 million were disbursed to PMORALG and Regional Secretariat (RAS)

respectively for monitoring. Up to 30th June 2014, the total expenditure was Tshs

710.00 million of the monitoring budget while RAS engineers spent the entire budget

allocated for monitoring.


40

3.9 Donor Supported Projects:

The support from development partners had positive impact of reducing current Fund’s

requirements for capacity building and construction of new roads and also increased

future obligation to maintain newly constructed and upgraded roads. For the year

ended 30th June 2015, the following programmes were financed by development

partners:

African Community Access Programme (AFCAP): The Project is financed

by DFID to support improvement of rural roads network including preparation of

guidelines, development of research capacity to PMORALG and provision of

material testing equipment for Dodoma and other regions;

Rural Road Maintenance System Development Project: The Project is

financed by JICA. Through this project, two LGAs in Dodoma and Iringa Region

are developing a Rural Road Maintenance System;

Improving Rural Access In Tanzania (IRAT): The Project is financed by

DFID where by £25 million will be provided in a span of four years for

improvement of rural network and development of Road Management System

(DROMAS);

Improvement of Rural Roads in Tanzania: The Project is financed by the

European Union. This project involves upgrading and rehabilitation of 300 km

of rural roads in Iringa, Morogoro and Ruvuma. Similarly, it involves technical

and Managerial Capacity Building for PMO-RALG staff on management of the

Road Sector; and

Feed the future Programme: The project is financed by USAID and it

involves rehabilitating of 174km to gravel standard in four LGAs of

Kilombero,DC, Mvomero DC, Kongwa DC and Kiteto DC at a cost of United

States Dollar 50,486.21.


41

3.10 Challenges in the Implementation of Road Maintenance Works

During the year under review, road maintenance programmes execution through Local

Authorities faced a number of challenges as follows:

Delays in procurement of works;

Incompetence of contractors which caused implementations of the project to

be delayed before the roads were passable by vehicles;

Lack of sufficient supporting staff in DE’s offices;

Untimely release of funds;

Vandalism of road furniture e.g. Road sign post;

Lack of supervision of vehicles for newly established LGAs; and

Increase in road maintenance needs versus allocated budget.


42

Table 3.3: Development Projects implemented by Local Government authorities for FY 2013/14

S/

N

COUNCIL

PROJECT/ ACTIVITY

ANNUAL PLAN &

CONTRACT SUM FUNDS

RECEIVED -Tshs'000

ACTUAL IMPLEMENT. REMARKS

Physical

(km/no)

Finance -

Tshs'000

Physical

(km/no)

Financial -

(Tshs'000)

1 Masasi TC

Upgrading of Mkapa Road (CCM-

REST CAMP) to Double Surface Dressing

1.0 350,000 350,000 1.2 230,000 90%

2 Ulanga DC

Upgrading of Mahenge Town

Roads to Double Surface Dressing

2.0 500,000 500,000 1.69 382,776 80%

3 Kondoa Ntundwa – Hurui 45.0 300,000 300,000 25km plus 6 lines

of culverts 153,070 70%

4 Mkalama Iguguno-Lelembo-Msingi 25.0 350,000 350,000 0 0 Mobilization

5 Geita DC Buyagu-Nyabulolo-Nyarugusu 17.0 300,000 300,000 19.0 150,000 98%

6 Morogoro DC Construction of Gizigizi Bridge 1No 200,000 200,000 0 0 Mobilization stage

7 Ilala MC

Chanika-Msumbiji-Nzasa (Gravel).

7.0 280,000 280,000 4.5 179,500 80%

Pugu-Majohe-Mbondole (Gravel) 6.0 240,000 240,000 5.0 107,350 80%

7 Kilindi DC Songwe-Mvungwe-Lwande 25.0 300,000 300,000 19.3 196,000 Funds exhausted

8 Songea D.C Mpitimbi A-Mbinga Mhalule 27.0 351,000 351,250 22.5 333,450 Funds exhausted

9 Njombe T.C Storm Water Drainage at Melinze

– Magereza 1.0 250,000 250,500 1.0 250,500 100%


43

10 Upgrading of Magereza –

Machinjio Street 1.0 448,000 448,000 0.25 220,000

Double Surface -

30%

11 Same D.C Saweni – Gavao – Bwambo 21.7 250,000 250,000 0 0 0%

12 Muleba D.C Rehabilitation of Kanyambogo-

Rubya (Gravel) 8.0 160,000 160,000 4.0 0 50%

13 Hanang D.C Rehabilitation of Hanang Town Roads (Gravel)

30.0 150,000 150,000 7.0 144,617 Funds exhausted

14 Mtwara D.C

Mduwi-Kilombero-Mahurunga 20.7 416,741 416,741 5.5 235,872 75%

Likonde-Muungano 7.0 122,745 122,745 4.7 102,253 90%

Kabisera – Kitope 4.0 93,993 93,993 3.0 83,000 90%

15 Bunda D.C Upgrading of Bunda Town Roads

to DSD standard 1.0 350,000 350,000 1.0 0 30%

16

Iringa M.C

Upgrading of Kihesa – Tumaini University road to DSD (Tarmac)

1.0 350,000 350,000 1.0 20,000 Reshaping only

Rehabilitation of Tumaini

University – Kigonzile 5.0 100,000 100,000 3.75 94,000 100%

17 Bagamoyo

D.C

Upgrading of Bagamoyo Town

Roads to DSD standard 2.0 700,000 700,000 1.0 401,668 60%

18 Nkasi D.C Rehabilitation of Nkana – Nkala

Road & Kitosi - Wampembe 40.0 400,000 400,000 40.0 400,000 100%

19 Ludewa D.C Construction of Kitewaka Bridge 1No 190,000 190,000 1No 53,000 40%

20 Iringa D.C Rehabilitation of Mafuruto –

Isele – Magombwe (gravel). 18.0 554,140 554,140 15.0 480,000 90%


44

Rehabilitation of Udumka – Ilandutwa

11.8 381,495 381,495 11.8 365,888 90%

21 Longido D.C Rehabilitaion of Elang’atadapash – Noondoto (Gravel)

12.0 189,140 189,140 12.0 180,140 95%

22 Rungwe D.C Rehabilitation of Itende –

Malamba (Gravel) 6.0 120,000 120,000 6.0 120,000 100%

23 Butiama D.C

Upgrading of Nyamisisi-

Mnadaani Road to Bitumen

Standard

1.0 350,000 350,000 0 0 Mobilization stage

24 Mpanda T.C Upgrading of Mpanda Town

Roads to DSD standard 1.5 525,000 525,000 1.5 525,000 100%

25 25.Rufiji D.C Completion of Mohoro Bridge (Nyamwage –Utete)

1No 200,000 200,000 0 0 Mobilization stage

26 26.Lushoto

D.C

Rehabilitation of Mlalo-Mlola-

Makanya-Milingano road 50.0 400,000 400,000 22.0 395,528 Funds exhausted

27 27.Mbarali

D.C Ujenzi wa Daraja la Manyota 1No 113,000 113,000 1No 81,521 95%

28 Kinondoni MC

Rehabilitation of Kwa Magoti-Arsenal Road-Mji Mwema

(Tarmac)

3.0 1,050,000 1,050,000 2.0 104,400 45%

Biafra-France Embassy 1.3 520,000 520,000 1.1 418,250 65%

Msasani Road 1.95 572,867 572,867 1.5 465,649 100%

29 Wanging’omb

e DC

Rehabilitation of Itulahumba -

Idindirimunyo – Igwachanya Road

18.0 433,000 433,000 18.0 411,352 100%

Rehabilitation of Kidugala-

Mambegu road 8.8 176,000 176,000 8.8 173,004 100%


45

30 Siha DC

Mungushi-Embukoi Bridge; 1No 140,000 140,000 1No 69,500 50%

Rehabilitation of Donyomuroak- Orkolili Road

175,000 175,000 175,000 .00 100%

31 Mbeya CC Upgrading of Mbeya City Roads to DSD standard

1.0 350,000 350,000 0.9 125,070 90%

32 Makambako T.C

Upgrading of Makambako Town Roads to DSD

1.0 350,000 350,000 0.3 105,980 45%

33 Mbeya DC Access road to Mbalizi Bus Stand

(DSD) 1.5 525,765 525,765 0.85 97,027 50%

34 Mbinga DC Kipapa-Mango road 5.0 100,000 100,000 5.0 89,986 100%

Mkiri-Litembo road 20 200,000 200,000 5.0 88,419 60%

35 Missenyi Completion of Kabingo Bridge 1No 400,000 400,000 I No 400,000 100%

TOTAL 14,977,886 14,978,636 8,433,769


46

Auditors’ Opinion on Financial Statements of PMORALG


financial statements of PMORALG for the Financial Year and issued various professional

opinions .The Implementing Agencies under PMORALG Auditor’s opinion on the Financial

Statements is presented in generalized form based on summary of their audit outcomes.


47

Auditors’ opinion on Financial Statements of

PMORALG


48


49


50

PART FOUR: PERFORMANCE OF TANROADS


51

PART FOUR: PERFORMANCE OF TANROADS

4.1 Introduction

This part presents the performance of TANROADS with respect to road maintenance

programmes carried out during FY 2013/14 as stipulated in the Performance Agreement signed

between TANROADS and the Roads Fund Board. According to the current allocation formula,

TANROADS receives 63 percent of Roads Fund for road maintenance of Trunk and Regional

Roads.

The maintenance works covered: routine/recurrent maintenance; periodic maintenance; spot

improvement; bridge preventive; bridge major repairs and emergency works, PMMR project;

and Weighbridge maintenance and improvements.

4.2 The Maintenance Budget

During the period under review, TANROADS was budgeted Tshs 314,535,652,000. The

breakdown of this budget is shown in Table.4.1 below:

WORKS COMPONENTS Budget %AGE

Trunk Roads 101,315.71 32.21%

Regional Roads 162,103.56 51.54%

Emergency & Urgent 6,871.54 2.18%

PMMR Project 2,324.84 0.74%

W/bridge Maintenance & Improvements 3,500.00 1.11%

HQ Based Activities 4,470.00 1.42%

Total Works 240,081.44 89.21%

NON WORKS

Administration Costs 10,650.00 3.39%

Supervision Costs 13,500.00 4.29%

Weighbridge Costs 9,800.00 3.12%

Total Non- Works 27,900.00 10.79%

TOTAL BUDGET 314,535.65 100%

Table 4.1: Summary of Road Maintenance Budget for FY 2013/14 (Tshs Mill)

Source: TANROADS & RFB


52

4.3 Road network

TANROADS maintains the national road network which by 30th June 2014 was 35,000 km

comprising of 12,786km of trunk roads and 22,214km of regional road and its status of

pavement is as analyzed in Table 4.2 below:

Pavement Type Trunk Regional Total

Paved 6,390 1,012 7,402

Unpaved 6,396 21,202 27,598

Total 12,786 22,214 35,000

Table 4.2: Roads Lengths June 2014 (Km)

4.4 The Road Network Condition

As of 30th June 2014, the roads network in good/fair condition was 88% and 12% was in poor

condition. Figure 4.1 below shows a five years trend of national road condition as of June

every year.


4.5 Physical and Financial Performance

Up to 30th June 2014, a total of Tshs 261,464,216,000 equal to 83% of the total annual budget

was received by TANROADS. The total expenditure was Tshs 168,033,277,000 equivalent to

64.3% of the amount received by TANROADS.

The total expenditure for Trunk roads was Tshs 63,748,003,000 against the allocated Tshs

101,315,714,000 which is 63%, while the physical performance achievement was 81%.

84 86 85 86 88

16 14 15 14 12

0

50

100

2009/10 2010/11 2011/12 2012/13 2013/14

Perc

en

tag

e

Financial Years

Figure 4.1: Trend of Road Condition for Trunk and

Regional Roads

Good/Fair Poor


53

Expenditure for Regional roads was Tshs 104,285,274,000 compared to annual plan of Tshs

162,103,561,000 which is 64%; and its physical performance recorded 82% against annual

targets. This performance level lead into works being rolled over to FY 2014/15 to the extent

of 18% of physical performance and Tshs 95,385,998,000 equivalent to 36% of financial

performance. The detail of annual performance is shown in Table 4.3 below:


54

Source: TANROADS

Up to 30th June 2014, the physical and financial performance was 82% and 64% respectively.

The financial performance was low due to delay of transfer of funds from the Treasury to the

RFB account leading to delay in disbursement of funds to the Implementing Agencies. Figure

4.2 shows the trend of physical and financial performance of TANROADS overtime:


55

99 94 9783 8286 85

95

7264

0

20

40

60

80

100

120

2009/10 2010/11 2011/12 2012/13 2013/14

Perc

en

tag

e

Financial Years

Figure 4.2: Trend of physical and Financial Performance

Overtime TANROADS

Physical Performance Financial Performance


4.6 Emergency Works:

The financial year under review experienced heavy rains in many regions between November

2013 and June 2014 causing damages on the road network. Fourteen regions reported

emergency cases of the road damages which were repaired within a shortest time possible.

4.7 Performance-based Management and Maintenance of Roads (PMMR):

The PMMR was a pilot project covering a total of 1,076km of unpaved roads located in Tanga,

Mwanza and Rukwa regions. The project consisted of six contracts whereby for each contract,

a contractor was required to assure that certain pre-defined service levels existed at all times

during five years of the contract. Payment under these contracts were made on a monthly

equal instalments, provided that the contractors complied with the required service levels on

the roads.

As at 30th June 2014, all packages were closed by either termination or completion. Mwanza

East and Mwanza West packages were completed in February 2013 after earlier completion of

two packages in Rukwa in December 2012. The package for Tanga west was completed on

30th June 2014 while that for Tanga East was terminated on July 12th 2013.

4.8 Vehicle Axle Load Control

In accordance with the Road Traffic (Maximum Weight of Vehicles) Regulations of 2001,

TANROADS carries axle load control using both fixed and mobile weighbridges. As at 30th June

2014, there were 28 fixed weighbridges and 17 mobile weighbridges in the whole of Mainland

Tanzania. Three new weighbridge stations were at various stages of construction as at 30th


56

June 2014. These are Vigwaza, Horohoro and Kubiterere (Sirari) stations. The stations were

financed by the World Bank under the East Africa Trade and Transport Facilitation Project

(EATTFP).

During FY 2013/14, a total of 3,202,253 vehicles were weighed throughout the country; out

of these, 875,314 vehicles were found to be overloaded, which is 27.33% of weighed vehicles.

Out of the overloaded vehicles only 54,849 equivalent to 1.71% were found to be over loaded

beyond the allowable 5% overload and hence were charged accordingly.

4.9 Road Reserve Management:

During the period under review, a total of Tshs 1,787.330 million was spent for road reserve

management. The activities include marking of illegal structures, installing marker posts;

awareness campaigns and demolition of structures which have been exacted inside the road

reserve areas.

4.10 Road Safety Management:

During the period under review, a total of Tshs 2,224.282 million was spent for road safety

management. The activities included road marking, installation of road/information signs,

construction of rumble strips, installation/replacement of guard rails, construction of standard

road humps and installation/replacement of traffic lights.

During the period under review, regions experienced various vandalism/damages to road

furniture and structures to the tune of Tshs 2,029.092 million, whereby Tshs 178.490 million

were recovered from various culprits.

4.11 Road Maintenance Management System:

During the period under review, TANROADS continued to implement activities aimed at

strengthening and improvement of performance of an integrated computerized Road

Maintenance Management System. The system is an interface of RoadMentor-5, Geographical

Information System (GIS) and Highway Development and Management tool (HDM-4). Apart

from operational issues, other implemented activities included:

• Road condition survey for paved roads network;

• Traffic counts and spot inventory surveys;

• Training of three engineers on HDM-4;

• Training of five engineers on Lasers safety and installation;

• Training on falling weight deflectometer (FWD) field measurement; and

Introductory training on FWD data analysis.


57

4.12 Maintenance Challenges for national roads

During FY 2013/14, TANROADS encountered a number of challenges which are continually

tackled. Most of these challenges are related to inadequacy of resources and public awareness

as follows:

• Vandalism and theft of road furniture;

• Road reserve encroachment by stubborn people;

• Low capacity of the local construction industry;

• Inadequate contracts management skills among supervising staff;

• Insufficient supervision resources;

• Inadequacy of axle load control; and

• Expansion of road network.


58

Auditors’ Opinion on Financial Statements of TANROADS


financial statements of TANROADS for the Financial Year and issued various professional

opinion. The Financial Statements are presented together with Auditors’ opinion.


59

Auditors’ opinion on Financial Statements of TANROADS


60


61


62


63


64


65


66


67


68


69

PART FIVE: TECHNICAL AUDITORS REPORT


70

PART FIVE: TECHNICAL AUDITORS REPORT

5.1 Background

The operations of the Fund are subjected to audit for the purpose of assessing the

achievement of the purpose for which the Fund was established. The audit of the Fund

is performed by the Controller and Auditor General (CAG), whose mandate is enshrined

under Article 143 of the Constitution of the United Republic of Tanzania. These powers

and mandate of the CAG are clearly stipulated in Sections 11 and 12 of the Public Audit

Act No. 11 of 2008 which are to examine, inquire into and audit the accounts of all

accounting officers and receivers of revenue on behalf of the National Assembly.

5.2. Technical Audit Report for FY 2013/14

In exercising its mandate, the National Audit Office of Tanzania (NAOT) under CAG

has powers to authorize any person publicly carrying on the profession of an

accountant or an auditor or any other expert to carry out any inquiry, examination or

audit.

Recognizing this mandate, the Roads and Fuel Tolls Act, CAP 220 provides

appointment, subject to approval by the Controller and Auditor General, of an auditor

or auditors to carry out the audit of the Fund. It is under this mandate that the Roads

Fund Board appoints independent experts as consultants to perform Technical audit of

all road works financed by the Fund.

For the FY 2013/14 the technical audit results show that the performance of

TANROADS has been better than that of their counterparts, the LGAs and that in

general all the implementing agencies have improved performance when compared to

that of FY 2012/13.

5.2.1 OPINION ON TANROADS TECHNICAL PERFORMANCE

Planning, Design and Tender Documentation

TANROADS performance in stage of planning, design and tender documentation had

been effective even though it was dropping over time. There was compliance of project

planning with the requirements of performance agreement. There was accuracy,

appropriate completeness of design calculations and technical drawings.


71

Overall appropriateness of design in terms of economy and function had been good.

Moreover, TANROADS performed better in ensuring that there was accurate and

complete bills of quantity (BOQs) and tender documents.

Procurement

The stage of procurement has been observed to be effective unlike other stages

particularly planning, design and tender documentation and project completion and

closure. The audit found out that contracts were signed on time and capacity of

contractors existed. There was also public accountability which lead to adherence to

prescribed methods of tendering and prescribed policies towards the selection of the

suppliers, good selection of the contractors and compliance with PPRA. In some

projects it was noted that there was poor selection of methods of procurement, poor

use of standard tender and contract documents, and poor communication and

clarification to bidders.

Construction

During the period of financial year 2012/13 to 2013/14, it was noted that performance

was adequate, however, there were a few parts that needed to be addressed as they

performed on average. Areas that were supposed to be given strong emphasis were

adherence to quality assurance program, quality of environmental management plan,

quality of quality assurance program and assessment including validity of claims and

related cost overruns. In these aspects weak performances were observed which to

some extent frustrated the construction stages.

Project Completion and Closure

The stage of project completion and closure had been observed to be ineffective unlike

the other stages particularly planning, design and tender documentation stage and the

procurement stage. The audit has found out that, built drawings and snag lists were

not prepared in many projects. In some projects there was no evidence if contractors

were attending liability period and other contractor were not notified on the

commencement date of defects liability period. It is evident that the final project

reports were not prepared in most of the projects. To a larger extent, the quantities

paid did not comply with the actual investments done. However, there was compliance


72

of project costs as per final accounts with the accepted tender prices; as well as the

actual project completion time with the contract period.

Executed Works

Generally the performance of TANROADS in the stage of executed works had been

low. Specifically, completed works satisfaction had been high due to close project

supervision. The compliance of major construction items of the completed works with

drawings and technical specification had slightly dropped. There was improvement in

compliance of constructed culverts and bridges with technical drawings and

specifications as well as the quality of materials used in pavement structures with

technical specifications. There was also improved compliance of quality materials used

in concrete and masonry work with technical specifications, although on average it was

still low. The compliance of site clean-up and restoration of disturbed areas with

Environmental Management has slightly dropped while compliance of on-going

construction activities with safety and Environmental Management Plan (EMP)

requirements had drastically improved, although on average it was low. The summary

of TANROADS average performance is shown in Table 5.1 below:

Table 5.1: TANROADS Average and Weighted performance

Stages 2012/13 2013/14 Average

[1] Planning and Designing 88.4 72.4 80.4

[2] Procurement Stage 86 86 86

[3] Construction Stage 65.8 66.6 66.2

[4] Project Completion Stage 43.9 44 43.9

[5] Executed Works 45.9 60.1 53

Weighted Average 66 65.82 65.9

Source: Roads Fund Board, 2014


73

5.2.2 OPINION ON THE PERFORMANCE OF LGAS

Planning, Design and Tender Documentation

LGAs performance on the stages of planning, design and tender documentation had

been ineffective and it has been dropping overtime. There was inadequate compliance

of project planning with requirement of performance agreement; inaccurate and

incomplete design calculations and technical drawings, inappropriate technical

specifications, inaccurate BOQ and engineer’s estimates as well as inadequate tender

documentation.

Procurement

The stage of procurement has been observed to be effective unlike other stages

particularly planning, design and tender documentation stages and project completion

and closure. The audit has found out that, there was improvement in procurement

methods in accordance with PPA, good policy, good contractor, tenderer and

management, good market condition, signing contracts on time and capability of

contractors, the tender basing on principles of competition, fairness and accountability,

good evaluation process and award of contract and compliance of procurement process

with PPA and its regulation. However, it was noted that there was no publication of

award and notification to the unsuccessful bidder, and the unjustified disqualification

of the lowest bidder.

Construction Stage

The performance of Local Government Authorities (LGA’s) under this stage in FY

2013/14 was satisfactory, however, there were challenges in construction stage.

Examples of poor performances have been spotted in assessment (including validity)

of variations, assessment (including validity) of claims and related cost overruns and

assessment (including validity) of project delays and extensions of time.

Project Completion and Closure

LGAs performance in the stage of project completion and closure had been improved,

even though it was still unsatisfactory for the observed years. As-built-drawings, snag

lists and final project reports were not prepared; and there was inadequate

management of defects liability period. There was late issuance of completion


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certificates and settlement of final accounts. There was low compliance of quantities

paid with actual investments done as per as-built-drawings, as well as actual project

completion time with contract period. It was also observed that there was satisfactory

compliance of project costs as per final accounts with the accepted tender prices.

Executed Works

There was notable improvement that has been shown as proof of growth of LGAs

performance in the stage of executed works. The completed works have been

satisfactory. Also there is compliance of dimension of major construction items of

completed works; and culverts and bridges with the drawings and technical

specifications. However, there was low compliance of quality of materials used in

pavement structures and concrete and masonry works with technical specifications.

Moreover, there was low compliance of site clean-up and restoration of disturbed

and/or damaged areas with EM. The compliance of on-going construction activities

with safety with EMP requirements has been low for the observed years. The summary

of LGAs average performance is shown in Table 5.2 below:

Table 5.2: LGAs’ overall and weighted average performance

Stage 2012/13 2013/14 Average

[1] Planning and Designing 63.03 49.61 56.3

[2] Procurement Stage 72 73 72.5

[3] Construction Stage 34 47.7 40.9

[4] Project Completion Stage 27.8 33.8 30.8

[5] Executed Works 35.9 51.1 43.5

Weighted Average 46.5 51 48.8

Source: Roads Fund Board, 2014


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Overall performance of implementing agencies is summarised in Table 5.3 below.

There was improvement from 56.3% in FY 2012/13 to 58.5% in FY 2013/14.

Table 5.3: Implementing Agency overall performance trend S/N Stage 2012/13 2013/14 Average Trend

1 Project, Design and Tender Documentation

75.7 61 68.4

2 Procurement Stage 79.2 79.8 79.5

3 Construction Stage 49.9 57.2 53.5

4 Project Completion and Closure Stage

35.9 38.9 34.7

5 Executed Works 40.9 55.6 48.3

A Overall Performances 56.3 58.5 56.9

B Rate of Growth in % 4

Source: Roads Fund Board, 2014 Key:

- Increase ,

- Decrease

- Constant/Maintained

- Growth

roads fund board annual report for fy 2013/14 · chairman’s statement on behalf of the roads fund...

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