UNITED REPUBLIC OF TANZANIA
Ministry of Infrastructure Development
MKUKUTA BASED MDGs COSTING
FOR THE ROAD SUB-SECTOR
DRAFT FINAL REPORT
Ministry of Infrastructure Development
Dar es Salaam
June 2006
Table of Contents
LIST OF TABLES ................................................................................................................................... III
LIST OF CHARTS .................................................................................................................................. IV
LIST OF ABBREVIATIONS..................................................................................................................... V
LIST OF ABBREVIATIONS..................................................................................................................... V
EXECUTIVE SUMMARY ....................................................................................................................... VII
CHAPTER ONE ....................................................................................................................................... 1
1.0
INTRODUCTION.......................................................................................................................... 1
CHAPTER TWO ...................................................................................................................................... 2
2.0
BACKGROUND .......................................................................................................................... 2
2.1
Introduction ....................................................................................................................... 2
2.2
Recent Developments and Current Status in the Sector ................................................... 3
2.2.1
2.2.2
2.2.3
2.2.4
2.3
2.4
2.4.1
2.4.2
2.4.3
The Roads Fund and the Roads Fund Board ............................................................................. 3
Tanzania National Roads Agency (TANROADS) ....................................................................... 5
Prime Minister’s Office, Regional Administration and Local Government ................................... 6
Road Condition: Conceptual Meaning ........................................................................................ 6
Sector Objectives .............................................................................................................. 7
Towards Road Sector MKUKUTA – MDG Costing .......................................................... 12
Purpose .................................................................................................................................... 12
Objectives of MKUKUTA Based MDGs Costing ....................................................................... 12
Guiding Principles ..................................................................................................................... 12
CHAPTER THREE................................................................................................................................. 14
3.0
REVIEW OF PREVIOUS COSTING ............................................................................................... 14
3.1
Transport Sector Investment Program ............................................................................ 14
3.1.1
3.1.2
3.1.3
3.1.4
3.1.5
3.1.6
3.1.7
3.1.8
3.1.9
3.1.10
3.1.11
3.2
3.3
3.3.1
3.3.2
3.3.3
3.3.4
3.3.5
TSIP Objectives ........................................................................................................................ 14
Relevance of TSIP to the Economy .......................................................................................... 15
The Policy Framework .............................................................................................................. 15
Transport Sector Stakeholders ................................................................................................. 15
Important Pre-requisites for Achieving TSIP Overall Goals ...................................................... 16
Planning, Budgeting and Reporting .......................................................................................... 16
Cross-cutting Issues ................................................................................................................. 17
Sub-sector Investment Programmes ........................................................................................ 17
Financial Estimates ................................................................................................................... 17
Monitoring and Evaluation ........................................................................................................ 17
Strengths and Weaknesses of TSIP ......................................................................................... 18
Tanzania Country Study-Road Sector ............................................................................. 19
Ten-Year Road Sector Development Plan ...................................................................... 20
Selection Criteria....................................................................................................................... 21
Financing Requirements ........................................................................................................... 21
Consultant’s Recommendations ............................................................................................... 23
Shortcomings of the Study ........................................................................................................ 23
National Rural Transport Programme (NRTP) .......................................................................... 23
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CHAPTER FOUR................................................................................................................................... 26
4.0
CRITERIA AND METHODOLOGY FOR COSTING THE INTERVENTIONS .............................................. 26
4.1
The Process .................................................................................................................... 26
4.2
General Assumptions for Roads Sector Methodology ..................................................... 27
4.3
Demographic and Other Basic Parameters ..................................................................... 28
4.4
Analytical Tools ............................................................................................................... 29
4.4.1
4.4.2
4.4.3
4.5
4.5.1
4.5.2
4.5.3
4.5.4
4.6
4.6.1
4.6.2
4.6.3
4.7
4.9
Interventions, Intersectoral Linkages and Cross-cutting Issues for MKUKUTA and MDGs
Targets ............................................................................................................................ 30
The Interventions and Quick Wins ............................................................................................ 31
Inter-sector linkages and synergies .......................................................................................... 31
Cross-cutting Issues ................................................................................................................. 35
Contribution of Road Sector to MDGs....................................................................................... 36
Trunk and Regional Roads: Needs Assessment and Interventions, Unit costs and
Estimated Units required ................................................................................................. 40
The Major Steps........................................................................................................................ 40
Sequenced Actual Costs of Interventions and Scaling up for 9 years Period (2006–15) .......... 40
Technical Assumptions and Approach in Determining the Costing for Trunk and Regional
Roads ....................................................................................................................................... 41
District and Urban Roads: Needs Assessment and Interventions, Unit Costs and
Estimates of Required Units ............................................................................................ 50
4.7.1
4.7.2
4.8
HDM4 Model ............................................................................................................................. 29
RED Model................................................................................................................................ 29
Adopted Tools of Analysis ........................................................................................................ 30
Important Steps......................................................................................................................... 50
Sequenced Actual Costs of Interventions and Scaling up for 9 Years Period (2006-15) .......... 51
Feeder and Community Roads: Needs Assessment and Interventions, Unit costs and
Estimates of Required Units ............................................................................................ 51
Summary of the Findings ................................................................................................ 56
CHAPTER FIVE ..................................................................................................................................... 58
5.0
FINANCING STRATEGY ............................................................................................................. 58
5.1
Overview ......................................................................................................................... 58
5.2
Analysis of the Current Financing ................................................................................... 58
5.3
Financing Mechanism ..................................................................................................... 60
5.4
Options for Additional Resources Mobilization for MKUKUTA and MDG Implementation in
the Road Sector .............................................................................................................. 61
5.5
Assumptions taken into Consideration while Preparing the Financing Strategy .............. 62
CHAPTER SIX ....................................................................................................................................... 63
6.0
CONCLUSION AND RECOMMENDATIONS .................................................................................... 63
APPENDICES........................................................................................................................................ 64
APPENDIX 1: THE QUICK WINS FOR THE ROAD SECTOR.......................................................................... 64
REFERENCES ...................................................................................................................................... 65
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Mkukuta Based MDGs Costing for the Road Sector: Draft Report
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LIST OF TABLES
Table 2.1:
Table 2.2:
Table 3.1:
Table 3.2:
Table 3.3:
Table 3.4:
Table 4.1:
Table 4.2:
Table 4.3:
Table 4.4:
Table 4.5:
Table 4.6:
Table 4.7:
Table 4.8:
Table 4.9:
Table 4.10:
Table 5.1:
Table 5.2:
Table 5.3:
Tanzania road network classification................................................................................. 2
MKUKUTA Based targets for the Road Sector ................................................................ 11
TSIP Financial Estimate for Phase I: 2006 – 2011 .......................................................... 17
Funding requirement for the 10 years RSDP .................................................................. 21
Indicative magnitudes for road intervention ..................................................................... 24
Proposed budget for funding the preparatory phase ....................................................... 25
Population projections ..................................................................................................... 29
Summary Matrix to show Inter-sectoral Linkages required for road sector towards the
attainment of MKUKUTA and MDG targets ..................................................................... 38
Unit Rates for Trunk and Regional Roads - Development............................................... 42
Unit Rates for Trunk and Regional Roads - Maintenance ............................................... 43
Sequencing actual cost of interventions and scaling-up for 9 years period (2006 – 2015)
for Trunk Roads .............................................................................................................. 45
Sequencing actual cost of interventions and scaling-up for 9 years period (2006 – 2015)
for Regional Roads ......................................................................................................... 48
Unit Rates for Regional Roads ........................................................................................ 52
Road Condition for District, Feeder and Urban Roads .................................................... 53
Sequencing actual cost of interventions and scaling-up for 9 years period (2006 – 2015)
for District, Feeder and Urban Roads .............................................................................. 54
Summary of the Costing Estimates: Cumulative Financial Trend (in 000 US $) .............. 57
Road Fund Collections and Disbursement for the last twelve years ................................ 59
Government Allocations to the Road Sector (In TZS) ..................................................... 60
Summary of MKUKUTA and MDG Financial Projections (Co ......................................... 60
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LIST OF CHARTS
Chart 4.1:
Chart 4.2:
Chart 4.3:
Chart 4.4:
Chart 4.5:
Chart 4.6:
Chart 4.7:
Chart 4.8:
Chart 4.9:
Chart 4.10:
Chart 4.11:
Chart 4.12:
Chart 5.1:
Chart 5.2:
Financial Trend (Interventions) ........................................................................................ 46
Financial Trend (Cumulative) .......................................................................................... 46
Physical Trend ................................................................................................................ 47
Paved roads in maintainable condition ............................................................................ 47
Financial Trend (Interventions) ........................................................................................ 49
Financial Trend (Cumulative) .......................................................................................... 49
Physical Trend ................................................................................................................ 49
Paved roads in maintainable condition ............................................................................ 50
Financial trend for district, urban and feeder roads ......................................................... 55
Financial trends cumulative ............................................................................................. 55
Physical trend for district, urban and feeder roads .......................................................... 56
Length of Paved roads in maintainable condition ............................................................ 56
Summary of Road Fund collections for the past 12 years ............................................... 59
MKUKUTA/MDGs and Road Sector Projections ............................................................. 61
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LIST OF ABBREVIATIONS
AIDS
BOT
CRB
CSO
DBFO
EAC
EATMRS
EIA
ERB
ESRF
FDI
FY
Acquired Immuno-Deficiency Syndrome
Bank of Tanzania
Contractor’s Registration Board
Civil Society Organisation
Design Build Finance and Operate
East African Community
Environmental Assessment Training Manual for Roads Sector Stakeholders
Environmental Impact Assessment
Economic Research Bureau
Economic and Social Research Foundation
Foreign Direct Investment
Financial Year
GDP
Gross Domestic Product
GOT
Government of Tanzania
HIV
Human Immunodeficiency Virus
HOM4
Highway Development Management
ICT
Information, Communication and Technology
KM
Kilometres
LBT
Labour Based Technology
LGAs
Local Government Authorities
MDGs
Millennium Development Goals
MKUKUTA
Mkakati wa Kupunguza Umaskini na Kukuza Uchumi Tanzania
MOID
Ministry of Infrastructure Development
MoW
Ministry of Water
MP
UN Millennium Project
MTEF
Medium Term Expenditure Framework
NGO
Non-Governmental Organization
NORAD
Norwegian Agency for International Development
NPRA
Norwegian Public Roads Administration
NSGRP
National Strategy for Growth and Reduction of Poverty
PER
Public Expenditure Review
PMO-RALG
Prime Minister’s Office-Regional Administration and Local Government
PPP
Public-Private Partnerships
RDS
Rural Development Strategy
RED
Road Economic Decision
RF
Roads Fund
RFB
Roads Fund Board
RSEMG
Road Sector Environmental Management Guidelines
SDSEM
Sustainable Development Strategy for Environmental Management
SWOT
Strength, Weaknesses, Opportunities and Threats
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TANROADS
TAZARA
TCAA
THA
TRC
TSIP
TSRP
UN
UNCDF
UNDP
UPE
URT
US$
VPO
WB
MoPSS
Tanzania Roads Agency
Tanzania Zambia Railway Authority
Tanzania Civil Aviation Authority
Tanzania Harbours Authority
Tanzania Railways Corporation
Transport Sector Investment Program
Transport Sector Investment Program
United Nations
United Nations Country Team
United Nations Development Program
Universal Primary Education
United Republic of Tanzania
United Stated Dollar
Vice President’s Office
World Bank
Ministry of Public Safety and Security
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EXECUTIVE SUMMARY
The Government of Tanzania (GoT) approved the National Strategy for Growth and Reduction of
Poverty (NSGRP) or MKUKUTA (Swahili acronym) in early February 2005. Subsequently the framework
for the implementation of the strategy was prepared. The implementation of the strategy is therefore
scheduled for the Financial Year 2005/06.
It is obvious that, the achievement of MKUKUTA is an overwhelming and a necessary challenge that
must be realised if Tanzania is to achieve its development aspirations. This ambition must match an
equally ambitious financing strategy that estimates and mobilises the resources required to achieve the
operational targets stipulated in MKUKUTA. To meet these targets, the financing plan must be based
on an assessment of needs and the cost of interventions for achieving the identified needs. The
subsequent financing gap will obviously be large and unlikely to be met by domestic sources. Additional
resources must be mobilised. Thus, there is a need to develop a comprehensive process to cost
MKUKUTA interventions and establish the resource gap.
The first round of MKUKUTA costing comprises of 5 sectors namely Water, Health, Education,
Agriculture and Roads. Like other sectors, the Road Sector need to work together with all other sectors
to establish and mobilise the resources required to achieve the operational targets stipulated in
MKUKUTA.
This report is divided into six chapters. After the introductory chapter, chapter two presents the
background and the current status of the sector. The third chapter reviews the previous costing.
Chapter four deals with MKUKUTA – MDG costing criteria and methodology. The findings of the study
are also summarized in chapter four. Chapter five contains the financing strategy while Chapter six
makes conclusions and recommendations.
Road sector is a major contributor in socio-economic development. It accelerates economic growth and
hence contributes towards achieving the targets of MKUKUTA. The sector involves activities related to
maintenance, upgrading and rehabilitation of trunk, regional, district, urban and feeder roads and its
river crossing structures i.e. bridges and culverts. Since independence, development and maintenance
of roads has been the responsibility of the Government. It participated directly in the planning,
designing, and mobilisation of funds and in the execution of road works. Private sector participation has
been minimal especially in construction and maintenance except in service provision as contractors and
consultants.
Tanzania has road network of about 85,000 km with an estimated road asset value of US$ 1.64 billion
(excluding bridges)
Reforms in the road sector started early 1990s by the Government adopting reforms in the management
of the economy. Most of these reforms were institutional which were initiated under the Road
Management Initiative. The main focus was to create an efficient service delivery mechanism. MoID
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Mkukuta Based MDGs Costing for the Road Sector: Draft Report
initiatives to implement such reforms included establishing the Roads Fund (RF) and later the Roads
Fund Board (RFB) for the purpose of managing the fund. TANROADS was established to manage the
Trunk and Regional road networks.
In order to cope with the above changes, MoID is currently reviewing the Highways Ordinance Cap. 167
of 1932, which was last, amended in 1969 and is expected to come up with a new Roads Act. The
original Act as amended by Amendment Act No. 40 of 1969 did not allow for the financing and
management of road works and thus making it difficult to identify adequate resources. The Act aims at
reviewing and repealing the Highways Ordinance Cap 167 with the subsequent amendment of 1969.
The new Act recognises the Roads Tolls (Amendment) (No. 2) Act of 1998 that established the RFB, the
Executive Agencies Act, 1997 that established TANROADS and its Ministerial Advisory Board, and the
regional roads boards at regional level. The new Roads Act will be submitted to the Parliament in 2006
for approval.
As we shall see later, overtime operations of the Roads Fund, Roads Fund Board and TANROADS
have not been without notable achievements and challenges. It should also be noted that, the
PMORALG through its 121 LGAs oversees roadwork management of about 50,000 km of district
(20,000 km); urban (2,450 km); and feeder (27,550 km) roads. Like the case with Roads Fund, Roads
Fund Board and TANROADS, PMORALG institutions have recorded considerable achievements in their
operations but also experienced a number of challenges.
A number of road sector objectives and policy directives are spelt out in various National Frameworks
such as, the Construction Industry Policy of 2003, Development Vision 2025, Rural Development
Strategy 2003 and the National Transport Policy 2003. Although there are various policy documents that
can be used to guide the development of roads in Tanzania, there is a need to have a separate policy
for Road Sector.
The primary purpose of costing the interventions of the roads sector and estimating the price tag of
MKUKUTA - MDGs related interventions is to align the national budget, sectoral plans, local government
plans and foreign aid with the MKUKUTA targets. Based on this purpose the costing exercise was
undertaken in the context of MKUKUTA implementation framework.
The present costing process builds as much as possible on the existing and/or accomplished studies
and research. Thus a comprehensive review of the past studies has been conducted to enable the team
draw lessons from them. This review is necessary in understanding the different approaches and
methodologies, the driving assumptions employed by other studies, identifying interventions, data
sources and learning from general experience development and/or design of intervention frameworks.
Thus, the past studies reviewed by the team include the 1997 study on Unit Cost for construction and
maintenance of roads commissioned by the Ministry of Works, various PER and MTEF. Others include
a 10 Years Government Road Development Programme (2001/02 – 2010/11) – the programme for
second phase and Transport Sector Investment Program (TSIP).
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Mkukuta Based MDGs Costing for the Road Sector: Draft Report
At the inception a two days stakeholders consultative workshop was organized by the then Ministry of
Works (MoW) in collaboration with the Economic and Social Research Foundation (ESRF) to


create awareness among stakeholders on the costing process
seek the stakeholders’ views on the approach and methodology
o specifically discussions focussed on the assumptions, cross cutting issues, sectoral
linkages and synergies, sectoral needs assessment and the sectoral interventions.
Two papers were presented during the workshop. The first paper on “Status of the Road Sector, Sector
Needs and Interventions” was presented by the Sector Ministry and the second paper on “Proposed
Approach for Costing MKUKUTA Interventions - The Road Sector” was presented by ESRF. Then the
group sessions were organized to work on 5 major topics namely Sector Needs, Sectoral Linkages and
Synergies, Cross Cutting Issues, Important Assumptions and the sector interventions. In addition to the
inception workshop, 2 subsequent workshops were organized where members of the sector working
group and the drafting team peer reviewed the earlier drafts of the Road Sector Costing Report. The
findings from the preceding workshops are presented in the subsequent sections.
Costing is divided into three parts in line with the sub-sectors, which correspond to trunk roads, regional
roads as well as district, urban, feeder and community roads. The overall methodological approach is
based on several fundamental assumptions that can be generalised for all sub-sectors as outlined
below. Note that, there are also specific assumptions for specific category of the road network.
(a) Costing is financially unconstrained. It is not based on current or past financial resource
availability or spending, but purely on the need for attainment of the targets. Other, nonfinancial constraints (e.g. regarding capacity) are taken into account. This means that, it
reflects the full resource requirements to maintain the current road network in addition to
resource increments required for scaling-up interventions to reach MKUKUTA targets and
MDGs;
(b) All costs are in USD equivalent exchange rate for year 2005. Inflation is not taken into
account, so that actual required spending in nominal terms may be higher. For figures in
TSH that had to be converted into USD, the exchange rate was assumed to be 1,000
TSH/USD;
(c) Estimated costs will match required expenditure if funds are spent as efficiently as possible.
It is assumed that there will be neither mismanagement nor leakages of funds;
(d) All inputs required for road construction, rehabilitation and maintenance will be available
whenever needed;
(e) The interventions have been categorised into major development and maintenance
activities i.e. construction, rehabilitation and upgrading for development works; and routine
and periodic/spot improvements for maintenance works. The costing will be based on the
unit costs for the above mentioned interventions in line with standard budgeting for road
sector. This categorisation into major interventions simplifies the costing exercise by
avoiding use of unit costs for detailed activities which are many and would make the
exercise cumbersome;
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(f)
(g)
(h)
(i)
(j)
The unit cost of inputs will be derived from the national average rates for the interventions
based on the information from development and maintenance projects in the regions;
Costing is based on the analytical framework, e.g. every intervention previously listed is
costed (after assessing the needs) with reference to the targets;
Interventions will follow different scaling-up paths. Technically, the scaling-up refers to the
way in which the overall costs are distributed over the entire period. For some interventions
like maintenance operations, which are carried out recurrently, the annual costs are
predetermined. For construction works, the cost will also be predetermined and distributed
annually over the period of the project;
Scaling-up choices are made based on non-financial constraints (especially regarding
capacity) and based on priorities (the cost for full implementation of quick wins are
considered within the first two years to the extent possible). It is assumed that through a
gradual and simultaneous scale-up of all interventions capacity constraints can be
removed; and
Projections for the post-2015 period are made based on the needs to maintain the MDG
level.
Costing analysis for road construction, rehabilitation and maintenance is carried out using two types of
software tools namely, the Highway Development Management (HDM4) and Road Economic Decision
(RED) Model. Choice of a tool to use depends on the type of road in question.
HDM4 model was developed to carryout technical and economic appraisals of road investment projects.
The model carries out life cycle analysis by predicting long-term pavement performance, effects of
maintenance standards and calculating annual costs. This model is ideal for paved and unpaved roads
with traffic volume of more than 300 vehicles per day (VPD). Note that, HDM-4 Model considers paved
and unpaved roads with traffic volume of more than 300 vehicles per day. However, in reality Tanzania
have a huge roads networks especially those under PMO-RALG with traffic volume less than 300
vehicles per day.
The HDM4 strategy analysis applies the concept of “Network Matrix” which comprises of categories of
the road network defined according to key attributes that most influence pavement performance and
road user costs. When undertaking a strategic analysis, the physical road network may be categorized
into a matrix defined by user-defined parameters such as road class, surface type, and pavement
condition or traffic flow. This approach is particularly used for medium and long-term network based
planning purposes by roads agencies responsible for thousands of kilometres of road network. It is
therefore cumbersome to make an analysis due to data hiccups.
Road Economic Decision (RED) Model is another tool used for costing analysis for road construction,
rehabilitation and maintenance. RED model performs economic evaluation of improvements and
maintenance projects. It adapts the consumer surplus approach, which measures benefits to road users
and consumers at reduced transport costs.
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The current analysis has employed HDM4 model alone mainly because the data set available could
better be analysed using this model than the Road Economic Decision Model. The Road Economic
Decision Model could not therefore be utilized. Before running the HDM4 Model, manual projections
were performed based on the major road interventions, unit costs and respective growth rates of costs.
Two sets of the findings have therefore been generated.
The findings from HDM-4 Model analysis show that, the ‘Unconstrained Programme’ total resource
requirement for the roads sector maintenance and improvement for the period of 10 years from 2006 to
2015 amounts to US $ 5,488,453. The roads network under the Ministry of Infrastructure Development
(TanRoads) requires a total of US $ 4,664,032 for maintenance and upgrading of trunk (US $
3,922,333) and regional roads (US $ 741,699). Out of this amount, a total of US $ 243,209 is for routine
and recurrent maintenance while US $ 128,086 is required for periodic maintenance and US $
4,292,737 is for development works. The roads network under the councils (PMO-RALG) requires a
total of US $ 824,420 consisting of US $ 374,045 for routine and recurrent maintenance while US $
450,375 is required for development works to the district, urban and feeder roads.
However, due to some limitations embodied in HDM-4 Model of analysis which includes the fact that it
considers paved and unpaved roads with traffic volume of more than 300 vehicles per day (VPD), the
costs of interventions in the roads sector were also estimated manually for both comparison as well as
ensuring accuracy and validity of the findings. Note that while HDM-4 Model considers paved and
unpaved roads with traffic volume of more than 300 vehicles per day, in reality Tanzania have a huge
roads networks especially those under PMO-RALG with traffic volume less than 300 vehicles per day.
Thus the approach and findings presented in the subsequent sections are based on the manual
estimates, alone which reflect crude estimates for F/Y starting 2005/06 to F/Y 2014/15. These findings
are expected to be improved when the new data set of the trunk and regional roads network in Tanzania
are incorporated at a later stage.
Following the needs assessment consultative workshop, the major interventions below were identified.
Note that, there are also specific interventions for specific category of the road network.
(i)
Ensure that 50% of the entire road network is in good condition by 2010;
(ii) Maintain (routine and periodic) all roads in good and fair condition annually by 2010;
(iii) Rehabilitate 2,420 km of unpaved district, urban and feeder road networks annually (which
makes 24,200 km by 2015);
(iv) Upgrade 484 km of unpaved district, urban and feeder road network to paved roads
annually (which makes 4,840 km by 2015). The target for each council is to pave 4 km per
annum;
(v) Rehabilitate a total of 7,410 km of both trunk and regional roads annually;
(vi) Construct to paved standard 200 km of trunk roads annually; and
(vii) Provide technical support.
The quick wins of the road sector includes all road projects which are not only short term but also with
rapid outcomes. Thus, the quick wins of the road sector may be any of the 7 broad interventions listed in
(a) above. In other words, any maintenance (routine or periodic), rehabilitation, upgrading, construction
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works, or technical support is the quick win for the road sector provided it entails a rapid impact and/or
results to the community.
A number of criteria are used by the road sector to identify the quick wins. These criteria include
accrued economic benefits, the extent of poverty reduction, employment generation and savings in
vehicle operating costs. Others are savings in maintenance costs, access to social services, reduction in
travel time, improve marketability and macroeconomic stability. So for example, a road project which
improves the road network in terms of achieving high connectivity or accessibility to bituminised roads
will automatically qualify. In addition and given the national priorities, importance of the agricultural
sector with respect to cash crop production, food crop production; importance of the mining sector;
importance of the tourism sector; and importance in the international transit trade with neighbouring
countries are also taken in to account.
The road sector has important linkages with many other sectors where respective interventions have
also tended to overlap. The sector has close links with lands, water, environment, tourism, energy,
minerals, private sector, labour (employment) and agriculture. Others are macroeconomic stability,
marketing, transportation and urban development, education and health. The roads sector also links
with trade, industry and business.
The link with the environment for example can clearly be seen through roads construction, rehabilitation,
maintenance and repair, which can be destructive to the environment. During road construction, trees
are cut; dust and smoke are emitted from construction sites; and sometimes there is water
contamination from oils, fuel, dust and smoke. There is subsequently need to collaborate with the
environment sector, and adhere to Environmental Impact Assessment (EIA) principles.
For the road sector, four cross cutting issues are particularly important. These are HIV/AIDS,
environment, gender and road safety.
In summary the manual projections of the costs of interventions for the roads sector have been carried
out in three different categories namely, Trunk Roads (Table 4.5); Regional Roads (Table 4.6); and
District, Urban and Feeder Roads (Table 4.9). The findings from the three categories are summarized
below.
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Mkukuta Based MDGs Costing for the Road Sector: Draft Report
Summary of the Costing Estimates: Cumulative Financial Trend (in 000 US $)
Sn
1
2
3
4
5
Costing Category
Trunk Roads
Regional Roads
District, Urban and Feeder Roads
Grand Total
TANROAD Salary Projections
2005/06
419,884
147,709
292,959
860,550
6,371 (for 2006/07)
2009/10 (MKUKUTA)
2,335,605
814,264
1,462,589
4,612,458
31,213
2014/15 (MDG)
4,250,419
1,814,955
3,017,418
9,082,792
98,147
The findings indicate that the total resource requirement for the roads sector development and
maintenance for the period of 5 years from 2005/06 to 2009/10 (MKUKUTA targets) is US $ 4,612,458
thousand, while for 10 years i.e. from 2005/06 to 2014/15 (MDG targets) amounts to US $ 9,082,792
thousand. The roads network under the Ministry of Infrastructure Development (Tan Roads) requires a
total of US $ 2,335,605 thousands by 2009/10 and US $ 4,250,419 thousands by 2014/15 for
development and maintenance of the trunk road network. The corresponding resource requirement for
the regional road network is US $ 814,264 thousands and US $ 1,814,955 thousands respectively.
Likewise, the Prime Ministers Office, Regional Administration and Local Government (PMO-RALG)
requires a total of US $ 1,462,589 thousand by 2009/10 and US $ 3,017,418 thousands by 2014/15 for
development and maintenance of the district, urban and feeder roads in Tanzania.
The huge resource gap estimated in chapter can be filled by both additional external resources and
additional domestic revenue. Road Fund has so far been the major source of revenue for road
maintenance activities. Tanzania macro economic performance has led the country to be identified in
the HIPC initiatives which lead to the first PRS. This second PRS (NSGRP) put the country to access
further additional resources as it complements to the first strategies. The country and other
development donors have commitments in ensuring that MDG and MKUKUTA targets are reached. This
also stands to be the advantage for additional resources first within the country and then outside for
these external resources. Tanzania has also stronger and impressive governance performance than
other countries in sub – Saharan Africa which signifies that the additional resource mobilised will be
efficiently used. The public financing gap can be closed by the following measures:

Increase the domestic revenues parallel to the increase in financial requirements resulting from
MKUKUTA and MDG.

Involving the private sector through Public-private partnership. BOOT approach can be the best
option to minimize and close the financial gap. This will also help to address the capacity
constraints.

Widen Road Fund Revenue sources.

More additional funds can be met by curbing tax evasions, efficient collection of fuel levy and
proper management of the utilization of funds.
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Mkukuta Based MDGs Costing for the Road Sector: Draft Report
CHAPTER ONE
1.0
INTRODUCTION
The Government of Tanzania (GoT) approved the National Strategy for Growth and Reduction of
Poverty (NSGRP) also referred to in Swahili as Mkakati wa Kukuza Uchumi na Kupunguza Umaskini
Tanzania (MKUKUTA) in early February, 2005. Following the approval of the strategy the Government
through the Vice President’s Office (VPO) has prepared implementation framework for MKUKUTA. The
implementation of MKUKUTA is scheduled to start in Financial Year (F/Y) 2005/06.
It is obvious that, the achievement of MKUKUTA is an overwhelming and a necessary challenge that
must be realised if Tanzania is to achieve its development aspirations. This ambition must match an
equally ambitious financing strategy that estimates and mobilises the resources required to achieve the
operational targets stipulated in MKUKUTA. To meet these targets, the financing plan must be based
on an assessment of needs and the cost of interventions for achieving the identified needs. The
subsequent financing gap will obviously be large and unlikely to be met by domestic sources. Additional
resources must be mobilised.
Thus, there is a need to develop a comprehensive process to cost MKUKUTA interventions and
establish the resource gap. MKUKUTA needs assessment and costing is therefore a joint endeavour of
the government and the United Nations Country Team, supported by the Millennium Project, to identify
policy priorities in MKUKUTA, sequencing and linking them to sector strategies and generate
approximate estimates of resources needed to meet the targets, to develop a snap shot of a long-term
strategy for achieving MDGs (2015), to coordinate international and local advocacy for increasing
international financial assistance for the MKUKUTA/MDG-related investments.
The first round of MKUKUTA costing comprises of 5 sectors namely Water, Health, Education,
Agriculture and Roads. The key local actors that will implement this strategy include central government
ministries and local government authorities (LGAs), independent departments and agencies, private
sector, Civil Society Organisations (CSO) and communities. In implementing MKUKUTA, the sector
needs to establish the amount of resource that will be required to implement the strategy.
The Road Sector need to work together with all other sectors to establish and mobilise the resources
required to achieve the operational targets stipulated in MKUKUTA. These sectors need to develop a
comprehensive process to cost MKUKUTA interventions and establish the resource gap. Proper costing
of the road sector interventions is expected to reduce the cost of providing essential services in rural
access and thus resulting in cost savings for other sectors.
This report is divided into six (6) chapters. After the introductory chapter, chapter two presents the
background and the current status of the sector. The third chapter reviews the previous costing.
Chapter four deals with MKUKUTA – MDG costing for the road sector. Chapter five contains the
financing strategy while Chapter six concludes the report with recommendations.
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Mkukuta Based MDGs Costing for the Road Sector: Draft Report
CHAPTER TWO
2.0
BACKGROUND
2.1
Introduction
Road sector is a major contributor in socio-economic development. It accelerates economic growth and
hence contributes towards achieving the targets of MKUKUTA. The sector contributes 5% to the overall
Gross Domestic Product (GDP), handling about 70% of internal freight traffic and 60% of transit cargo.
The National Transport Policy of 2003, the Construction Industry Policy of 2003 and the Rural
Development Policy of 2003 have all acknowledged the importance of the road network as being
essential for promoting socio-economic development.
The sector involves activities related to maintenance, upgrading and rehabilitation of trunk, regional,
district, urban and feeder roads and its river crossing structures i.e. bridges and culverts.
Since independence, development and maintenance of roads has been the responsibility of the
Government. It participated directly in the planning, designing, and mobilisation of funds and in the
execution of road works. Private sector participation has been minimal especially in construction and
maintenance except in service provision as contractors and consultants.
Tanzania has road network of about 85,000 km with an estimated road asset value of US$ 1.64 billion
(excluding bridges)1.
Table 2.1: Tanzania road network classification
Category
Paved (km)
Trunk Roads
3,830
Regional Roads
100
District Roads
30
Unpaved (km)
6,470
24,600
19,970
10,300
24,700
20,000
Feeder Roads
27,550
27,550
0
Total (km)
Urban Roads
470
1,980
2,450
TOTAL
4,430
80,570
85,000
Source: Study of Tracking the Road Funds by Louis Berger S.A. for Ministry of Finance Tanzania, August 2000
Ministry of infrastructure Development (MoID) and Prime Minister’s Office, Regional Administration and
Local Government (PMORALG) are responsible for development and maintenance of the above
network. MoW through its implementing Agency – Tanzania National Roads Agency (TANROADS)
manages about 35,000 km of roads (trunk and regional), while PMORALG through LGA’s manages the
rest of the network (district, urban and feeder roads), which is about 50,000 km.
1
See AEI (Africon Engineering International - Pty) (2004): Final Project Documentation, Consultancy Services for
Management Support to the Roads Fund Board in Tanzania.
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Other sectors such as agriculture, natural resources, minerals, energy, defence and water manages
their own road networks leading to respective investments or service areas.
2.2
Recent Developments and Current Status in the Sector
Reforms in the road sector started early 1990s by the Government adopting reforms in the management
of the economy. Most of these reforms were institutional which were initiated under the Road
Management Initiative. The main focus was to create an efficient service delivery mechanism. MoID
initiatives to implement such reforms included establishing the Roads Fund (RF) and later the Roads
Fund Board (RFB) for the purpose of managing the fund. TANROADS was established to manage the
Trunk and Regional road networks.
In order to cope with the above changes, MoID is currently reviewing the Highways Ordinance Cap. 167
of 1932 which was last amended in 1969 and is expected to come up with a new Roads Act. The
original Act as amended by Amendment Act No. 40 of 1969 did not allow for the financing and
management of road works and thus making it difficult to identify adequate resources. The Act aims at
reviewing and repealing the Highways Ordinance Cap 167 with the subsequent amendment of 1969.
The new Act recognises the Roads Tolls (Amendment) (No. 2) Act of 1998 that established the RFB, the
Executive Agencies Act, 1997 that established TANROADS and its Ministerial Advisory Board, and the
regional roads boards at regional level. The new Roads Act will be submitted to the Parliament in 2006
for approval.
2.2.1
The Roads Fund and the Roads Fund Board
The Roads Tolls Act, 1985 enacted by the Parliament on 26 July, 1985 provided for the imposition and
collection of tolls on the vehicular use of public roads. The tolls were treated as normal Government
revenues. Two road funds were established under two separate declarations made by the Minister for
Finance at different times. The first declaration called the “DECLARATION TO ESTABLISH A SPECIAL
ROAD FUND” or "THE ROADS FUND" was made in August 1991, and the second, the
“DECLARATION TO ESTABLISH THE LOCAL GOVERNMENT ROADS FUND” was made in August
1992. The Roads Fund was to be used to meet maintenance costs for regional core roads as well as to
fund the rehabilitation and maintenance of district and urban roads. Funds were to be derived from the
road toll levied on fuel and various sources levied on motor vehicles such as motor vehicle licenses, and
motor vehicle registration.
As the funds were established in accordance with section 17(i) of the "Exchequer and Audit Ordinance"
(Cap 439) which empowers the Government to establish a special fund, and being only an
administrative procedure, the declarations had no legal force and hence no legal liability for failure to
comply with the declarations. Thus, in order to give the Fund some legal force and secure more stable
financing for road maintenance and the management of the funds, the Parliament enacted the Roads
Tolls (Amendment) (No.2) Act, 1998 which establishes the RF and the RFB.
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2.2.1.1
Achievements and Challenges experienced by the Roads Fund and Roads Fund
Board
The reforms, which were instituted in the road sector, were aimed at speeding up road construction and
maintenance. There have been a number of successes and challenges.
The Board’s achievements include the following:
(a)
Increase in collection of Roads funds by 54% from Tshs. 47.25 billion in FY 2000/2001 to
Tshs. 72.93 billion in FY 2004/2005;
(b)
The approved Roads Fund Budgets for the road implementing agencies TANROADS and
PMORALG are being met 100% since the Roads Fund Board started its operations; and
(c)
The Board has prepared a strategic plan for 3 years from FY 2005/06 to 2008/09.
The Board has faced a number of challenges with respect to maintenance including the following:
(a)
Funds for maintenance are inadequate. Maintenance needs are US$ 164 million2. The
budget revenue expected for FY 2005/06 of Tshs. 80.4 billion (US$ 73 million) meets 45%
of the needs;
(b)
There is a huge back log of maintenance and many roads are not in maintainable condition;
and
(c)
Tax evasion has contributed to losses in fuel levy revenue.
The RFB became operational from F/Y 2000/01. The Board is composed of 9 members, 4 from the
public sector and 5 from the private sector. The main functions of the Board are to collect revenue,
disburse and to monitor utilisation of the same. Sources of RF are fuel levy, transit fees, and
overloading fees (as a deterrent). Heavy vehicle license fee which is a source according to the Roads
Tolls (Amendment) (No 2) Act of 1998 was abolished by the Ministry of Finance (MoF) from 01st July,
2005 as a measure to remove nuisance to the public, and to improve the business environment. Fuel
levy contributes more than 90% of the RF revenue. The Act has ring-fenced utilisation of the RF by
stipulating clearly that at least 90 percent of the money is to be used for maintenance and emergency
repair of classified roads and related administrative costs. Further, it permits up to 10 percent of the
money to be used for road development and related administration costs in accordance with plans and
budgets approved by the Parliament. The Board after deducting its costs disburses 70% to
TANROADS and 30% to PMORALG. The Board enters into annual performance agreements with the
road implementing agencies before it disburses funds.
2
Africon Engineering International (Pty) Ltd., 2004. ‘Final Project Documentation’, Consultancy Services for Management
Support to the Roads Fund Board Tanzania.
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2.2.2
Tanzania National Roads Agency (TANROADS)
TANROADS was established by the Executive Agencies Act of 1997 and became operational from F/Y
2000/2001. TANROADS is responsible for the management of the primary road network comprised of
trunk and regional roads. The Agency is also responsible for the management of subsidiary businesses
which are the equipment pools, equipment hire units and materials laboratories. TANROADS
organisational structure was reviewed in 2003 and a new structure approved and implemented from
January, 2004.
It has 21 regional offices in mainland Tanzania. The regions are grouped into four zones namely
coastal, central, lake and southern highlands. TANROADS enters into two performance agreements
each F/Y. One agreement is with the RFB for the provision of road maintenance and the other with
MoID for implementation of development of road projects financed by the Government and development
partners.
2.2.2.1
Achievements and Challenges experienced by the TANROADS
TANROADS has experienced achievements that include the following:
(a)
(b)
(c)
(d)
(e)
(f)
Increased maintenance activities and decreased road condition3. The road network in poor
condition has improved from 50% in 2000 to 18% in June 2005;
Improved timely payment to contractors and consultants;
Completed a road network inventory and condition survey in December, 2003;
Developed a computerised Roads Maintenance Management System; (RMMS);
Reduced overloading from 40% in 2000/2001 to 7% in 2004/05; and
Prepared a five year strategic plan (FY 2003/04 - FY2007/08).
Challenges that TANROADS faces include:
(a)
(b)
(c)
3
(d)
(e)
Funds for rehabilitation and upgrading are inadequate to meet strategic needs;
Maintenance funds account for about 50% of the actual requirements;
The low capacity of the local contracting and consulting in the construction industry. This is
a constraint to TANROADS operations;
Axle load control is not yet fully understood by the public;
Road reserve clearance continues to attract a number of illegal suits;
(f)
Inadequate internal capacity in procurement and management; and
(g)
and Bridge Maintenance Management System (BMMS).
Roads condition is normally rated in three categories of good, fair and poor. See section 2.1.4 below
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2.2.3
Prime Minister’s Office, Regional Administration and Local Government
PORALG through its 121 LGAs oversees road work management of about 50,000 km of district (20,000
km); urban (2,450 km); and feeder (27,550 km) roads. PMORALG has not carried out reforms in the
roads sector as has MoID because of its decentralisation policy. The local government reforms ongoing in PMORALG has not been felt by the roads sector. PMORALG has a unit called the Roads Fund
Management Unit (RFMU) under the Directorate of Regional Coordination (DRC) that oversees matters
related to roads funds. The disbursement formula to the LGAs is being reviewed as the current one that
disburses 85% on equity basis has been proven to be unsuitable.
2.2.3.1
Achievements and Challenges experienced by PMORALG
PMORALG has experienced amongst others the following successes:
(a)
Increased maintenance activities and improved road condition from 8% good in 2000/2001
to 25% good in 2003/2004;
(b)
Improved timely payment to contractors in many LGAs; and
(c)
Have developed a District Roads Management System (DROMAS).
PMORALG however still faces challenges that include the following:
2.2.4
(a)
PMORALG has not been getting clean financial and technical audit reports;
(b)
Information on the road network length and condition is not known. However, PMORALG
with the support from the World Bank (WB) is currently conducting a road inventory and
condition survey in all the LGAs;
(c)
Many of the roads are not in maintainable condition;
(d)
The allocation formula for roads funds to the LGAs is not suitable as it allocates 85% on
equity basis to all LGAs. The formula is currently being reviewed;
(e)
There are low capacities of local contractors, council’s and district engineers’ offices; and
(f)
Many LGAs’ do not spend all the money within the respective financial year leading to
having roll over funds and works.
Road Condition: Conceptual Meaning
The roads condition is normally rated in three categories of good, fair and poor. These ratings are
determined from the technical assessment of roads based on acceptance engineering practices. The
assessment is conducted either visually or using appropriate instruments fitted on vehicle and the data
collected is interpreted into three categories using road management system (computerized) or by
applying engineering judgment.
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While rating of road condition is based on technical assessment, the general road users or public would
require to understand the meaning of good, fair or poor roads in a simpler way. It is not an easy task to
define the terms in a way that cater for the technical and non-technical people. Attempt made here is
just to explain in general terms what it means by a good, fair and poor roads.
2.2.4.1
Good road
This is a road in an almost as built condition. The shape of the road will be intact and will have no
noticeable defects. The travel speed on this road is high and provides satisfactory travel time. Road
users experience comfort while travelling on this type of roads.
2.2.4.2
Fair road
This type of road will have started to loose some of the as built features after being put to use for
sometime. The road will have lost shape to some degree (gravel road) and will normally have limited
surface defects. The travel speed on this road is slightly limited but high enough to provide a reasonable
travel time. Road users experience a reasonable (reduced) comfort while travelling on this type of roads.
2.2.4.3
Poor road
This type of road will have been in use for some years (old road) with conspicuous loss of shape of road
(in case of gravel roads) and having many defects. The travel speed on this road is very low and hence
causes a longer travel time. The surface of this road is rough and hence road users experience
uncomfortable travel.
2.3
Sector Objectives
Road sector is guided by the Construction Industry Policy of 2003. Main objectives of the Policy include:
(a)
To improve the capacity and competitiveness of the local construction enterprises
(contractors, consultants and informal sector);
(b)
To develop an efficient and self-sustaining roads network that is capable of meeting the
diverse needs for construction, rehabilitation and maintenance of civil works for trunk,
regional, district and feeder roads network;
(c)
To improve the capacity and performance of the public sector and private sector clients so
as to ensure efficient, transparent and effective implementation and management of
construction projects;
(d)
To ensure efficient and cost effective performance of the construction industry that will
guarantee value for money on constructed facilities in line with best practices;
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(e)
To promote application of cost effective and innovative technologies and practices to
support socio-economic development activities such as road works, water supply,
sanitation, shelter delivery and income generating activities;
(f)
To ensure application of practices, technologies and products which are not harmful to both
the environment and human health;
(g)
To mobilise adequate resources from both the public sector and the private sector for
construction and maintenance of public infrastructure;
(h)
To enhance participation in regional and international co-operation arrangements for the
purpose of promoting the capacity and competitiveness of the industry and developing
markets for export of its services and products; and
(i)
To improve co-ordination, collaboration and performance of the institutions supporting the
development and performance of the construction industry.
2.3.1
Policy Directions
The Construction Industry Policy of 2003 caters foe a wide range of issues involving Public Private
Partnership but the most relevant here are the following: (a)
The Government and the private sector shall co-operate to promote employment creation in
construction related activities in a manner that will provide quality assets and address the
need for poverty alleviation;
(b)
The Government and the private sector shall ensure the transfer of technical and
managerial skills to consultants and public clients to enable them design and manage
community based works;
(c)
The Government and the private sector shall cooperate to ensure transfer of technical and
managerial skills to contractors, consultants and clients for labour based and labour
intensive works;
(d)
The Government will create awareness and commitment of the importance and viability of
both labour-based and community based delivery arrangements; and
(e)
The Government will promote private sector participation in financing construction and
maintenance of infrastructure projects through innovative arrangements of Public Private
Partnership (PPPs) such as build operate and transfer (BOT), build own operate and
transfer (BOOT) and design build finance and operate (DBFO).
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2.3.2
Other Policies and Institutional Framework
Other important policy documents that guide the development of road sector include Development
Vision 2025, Rural Development Strategy 2003 and the National Transport Policy 2003. Although there
are various policy documents that can be used to guide the development of roads in Tanzania, there is
a need to have a separate policy for Road Sector.
Major institutional players in the construction industry are the Government – represented by the sector
Ministry responsible for works, promotional and advisory government institutions, particularly the
National Construction Council and regulatory bodies (registration boards). The National Construction
Council has been a prime mover in the development of the local construction industry. Success of the
implementation of the Construction Industry Policy greatly hinges on the NCC’s ability to effectively play
its promotional, co-ordination and advisory roles. Other players are local authorities, training and
research institutions, professional associations, individual firms, bilateral and multilateral development
and funding agencies.
The regulation in the construction industry is critical for protecting the rights of users of construction
industry services. In Tanzania, the institutionalisation of the public sector reviews and subsequent
legislation amendments paved the way for establishment of the following institutions:
(a)
Contractors Registration Board (CRB);
(b)
Engineers Registration Board (ERB); and
(c)
Architects and Quantity Surveyors Registration Board (AQSRB).
These Regulatory Institutions were established in 1997 to register, regulate and develop contractors,
consultants and individual professionals in the construction Industry.
2.3.3
Road Sector Medium Term Expenditure Framework (MTEF) Objectives
Road sector objectives are clearly presented in the MoID and PMORALG MTEF documents for F/Y
2005/06 – 2007/08. These objectives were derived by harmonising objectives from the MTEF, Road
Sector Public Expenditure Review and Strategic Plans. The main objectives for road sector include the
following:
(a)
To develop and implement roads programmes;
(b)
To review and develop road rector policies and legislations, standards, specifications,
guidelines and regulations for management of roads;
(c)
To promote sustainable and broad-based growth;
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(d)
To put in place effective public service framework to provide foundation for service delivery
improvements and poverty reduction;
(e)
To establish and operationalise control and monitoring systems for roads;
(f)
To build the capacity of the road sector staff and other stakeholders in order to improve
service delivery in the construction industry;
(g)
To put in place systems to ensure effective universal access to quality public services, that
is affordable and available;
(h)
To improve health and well being of all Tanzanians with special emphasis to children,
women, especially vulnerable groups through reducing infants, child and maternal mortality,
morbidity and malnutrition, and increased prevention and treatment of HIV/AIDS;
(i)
To ensure equitable allocation of public resources with corruption effectively addressed;
(j)
To ensure sound economic management;
(k)
To improve customer relationships, information management and communication systems;
(l)
To improve management and accountability for human, physical and financial resources;
(m)
To contribute to economic development and poverty reduction by creating employment in
infrastructure investments technologies (LBT);
(n)
To reduce negative impacts of road developments on environment by strengthening
environmental management in the roads sector; and
(o)
To eradicate extreme poverty and hunger among women through access to economic
opportunities availed by infrastructure development activities e.g. promoting greater
involvement of women beneficiaries at project, planning and implementations stages to
ensure access to jobs and contracts.
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MKUKUTA Cluster and broad
outcomes
Cluster 1. Growth and Reduction
of Income Poverty.
 Broad based and equitable
growth is achieved and
sustained.
Cluster 2: Improvement of quality
of life and social well-being
Table 2.2: MKUKUTA Based targets for the Road Sector
MKUKUTA Operational
MKUKUTA Goal
Cluster Strategies
Targets
Goal 1: Ensuring sound economic
-Macro-economic stability
Sustain efforts to contain inflation to a level close or equal to that in
management
maintained.
major partners by pursuing prudent fiscal and monetary policies and
infrastructure improvements.
Goal 2: Promoting sustainable and
-Increased agricultural growth
Modernise and expand trunk roads connections, ports, and airports
broad based growth
from 5% in 2002/03 to 10% by
and transport services e.g. in Development Corridors
2010.
Accelerated GDP growth rate to Modernise and expand trunk roads connections, ports, and airports
attain a growth rate of 6 – 8%
and transport services e.g. in Development Corridors through
per minimum by 2010.
enhanced public – private partnerships
Rehabilitated 15,000 km of rural Provide adequate level of physical infrastructure needed to cope with
road annually by 2010 from
the requirements of poverty reduction targets.
4,500 km in 2003.
Involve rural communities in construction and management of rural
roads.
Goal 3: Improve food availability and Increased food crops
Improved access to inputs by subsistence farmers through targeted
accessibility at household level in
productions from 9 million tones inputs – subsidy to selected food crops and increasing accessibility to
urban and rural areas
in 2003/04 to 12 million tones
micro finance credit.
Goal 4: Reducing income poverty of Secured and facilitated
Improve transport systems, thus lowering transport costs and
both men and women of rural areas
marketing of agricultural
improve marketing to ensure high profit margins for producers.
products
Invest in infrastructure and widen access to markets within the
country, region and internationally to increase productivity and
incomes in agriculture.
Goal 1: Ensuring equitable access to Increased gross and net
Ensure all children with disabilities, orphans, and other most
quality primary and secondary
enrolment of boys and girls in
vulnerable children are able to effectively access and compete high
education for boys and girls,
primary schools from 90.5% in
quality, child friendly and gender sensitive primary education
universal literacy among men and
2004 to 99% in 2009
women and expansion of higher,
technical and vocational education
Goal 5: Systems in place to ensure
universal access to quality public
services that are affordable and
available
Improve passable (good/fair
condition rural) roads from 50%
in 2003 to at least 75% in 2010
Ensure the basic infrastructure exists, in particular adequate facilities
and network of passable roads to enable the delivery of basic social
services.
2.4
Towards Road Sector MKUKUTA – MDG Costing
2.4.1
Purpose
The primary purpose of estimating the price tag of MKUKUTA - MDGs is to align the national budget,
sectoral plans, local government plans and foreign aid with the MKUKUTA targets. Based on this
purpose the costing exercise will be undertaken in the context of MKUKUTA implementation framework.
The MKUKUTA costing will also be addressed with humility, flexibility and from a point of view of
learning.
2.4.2
Objectives of MKUKUTA Based MDGs Costing
The MKUKUTA based MDGs costing primarily assesses the needs and costing of implementing
MKUKUTA intervention and of reaching the MDGs. It will clearly define what resources will be required
to meet the targets. This is important for several reasons:
(a)
To assess needs and cost of implementing MKUKUTA. This exercise is aimed at
estimating the amount of resource required to implement the strategy for a period of five
years (2005 – 2010);
(b)
To identify cross-sectoral areas, needs and synergies in MKUKUTA;
(c)
To develop capacity for needs assessment. Institutionalisation of needs assessment in
Government Ministries and Departments will require building a capacity in order to
implement the MKUKUTA effectively and efficiently;
(d)
To align and harmonise MKUKUTA, PER/MTEF and JAS. These key processes require
well-balanced sequencing and linkages; and
(e)
To produce a snap shot of a long-term strategy 2005 – 2015 building on MKUKUTA.
Outline the key policies, institutions, and investments needed to achieve targets by 2015.
2.4.3
Guiding Principles
In order to achieve the objectives mentioned above, the MKUKUTA based MDG costing follows several
guiding principles. The specific principles used in the costing process include:
(a)
Cost estimates have been made within the MKUKUTA context based on strategic policy
options and choices for prioritising the ways and means of realising the MKUKUTA (MDG)
agenda; and
(b)
Costing work followed a participatory process that was driven by the sectors and key
stakeholders, supported by experts.
Key elements of costing that needed attention were:(a)
Ownership versus partnership;
(b)
Relative versus absolute costing;
(c)
Domestic versus external funding;
(d)
Financing versus costing;
(e)
Short-and-medium-term versus long-term costing;
(f)
Transparency in terms of assumptions and methodologies must be applied;
(g)
The Millennium Project methodology for costing serves as guidance; but this methodology
will be augmented with other approaches used to compute previous costing initiatives both
in Tanzania and outside Tanzania so as to provide a unique methodology for Tanzania,
which is based on MKUKUTA; and
(h)
Sequencing of the scale-up of interventions is based on targets as well as on non-financial
constraints.
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CHAPTER THREE
3.0
REVIEW OF PREVIOUS COSTING
3.1
Transport Sector Investment Program
The Transport Sector Investment Program (TSIP) provides the Government with an integrative sector
framework for overseeing the investment development in the transport sector. The focus of TSIP is to
obtain a well integrated transport program embracing all transport investments from all actors of
transport so as to ensure that transport sector contributes effectively to the growth of the economy. Like
in many other sectors this was a deliberate effort by the government to address transport constraints in
the country. TSIP facilitates the process, highlighting the road sector priorities and promotes the
interests of all cooperating partners.
As it is for other national and sectoral development programs, TSIP is guided by the principles of the
Tanzania Development Vision 2025; MKUKUTA and the MDGs. TSIP is meant to be a ten year program
implemented in two phases. Each implementation phase will be in line with the existing sectoral plan
and budget process i.e. MTEF Framework. Different pertinent issues have been taken into
consideration during its preparation including, transport sector stakeholders, transport sector itself, the
use of Strength, Weaknesses, Opportunities and Threats (SWOT) analysis within the sector, relevant
cross-cutting issues, financial estimates and the monitoring and evaluation mechanisms.
3.1.1
TSIP Objectives
Poverty reduction has been the focus of many development programmes in Tanzania. Many recent
development planning are embraced within the National Vision 2025, MKUKUTA, the MDGs and the
like. It is therefore clear that the TSIP objectives are linked to the above mentioned initiatives. Thus,
TSIP aims at the following objectives:
(a)
Facilitating the mobilisation of local and international resources to speed up transport
infrastructure development in an integrated transport modal approach;
(b)
To enable the transport sector to contribute to the growth and better distribution of income
and therefore to the poverty reduction initiatives;
(c)
To develop adequate, reliable, cost effective, efficient and seamless transport
infrastructure;
(d)
To foster and catalyse the involvement of public–private sector partnership; and
(e)
To ensure gender mainstreaming in all issues related to the transport development.
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3.1.2
Relevance of TSIP to the Economy
It is evident that, transport plays a crucial role in the growth of the national economy and therefore
reduction of poverty. Transport and in particular road transport facilitates trade and contributes towards
national integration. The road network is necessary for social-economic development of the country. It is
further expected that TSIP will focus on a well integrated transport program embracing all transport
investments from all actors of transport so as to ensure that transport sector contributes effectively to
the growth of the economy and welfare of the population. It has however to be noted that TSIP does not
aim at replacing existing planning and implementation mechanisms of transport actors but rather it
facilitates the process, highlighting the priorities of the overall progress of the sector and promote the
interests of all actors including donor and cooperating partners to participate effectively in poverty
reduction initiatives.
3.1.3
The Policy Framework
TSIP ought to operate within the framework of national and sectoral policies. These policies provide
conditions for TSIP operations. There are also sectoral policies aimed at providing conditions for TSIP
operations. Different cases can be mentioned as to how policy framework can provide conducive
environment for programme implementation, the implementation of the Transport Sector Recovery
Program (TSRP) has resulted into substantial improvement of the transport infrastructure services in the
country. The transport sector for example grew from 4.9% in 1997 to 6.4% in 2002.
TSIP is committed to contributing to the implementation of MKUKUTA by addressing all areas within the
transport sector, such as infrastructure to support both the productive and service sectors. It is
therefore streamlined to MKUKUTA and other national policies. The objective is to ensure that when
implementing the TSIP, it takes on board all the requirements and aspirations of national, sectoral as
well as international policies geared towards poverty reduction and development.
3.1.4
Transport Sector Stakeholders
The sector encompasses a number of stakeholders. It is on these grounds that the development of the
sector depends on the presence of adequate integration of efforts from various stakeholders whose
roles are very vital in running the daily transport sector management system and development. The
sector moreover receives crucial development management contributions from many stakeholders in
the form of regulations, infrastructure development, investments, safety and security management,
environmental management, service provisions and many other contributions. Though quite a good
number of these stakeholders can be mentioned the following are vital for the development of the
sector; Public Sector Institutions such as the three leading ministries dealing with transport; Ministry of
Infrastructure Development , Ministry of Public Safety and Security (MoPSS) and PMORALG.
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Others are regulatory bodies such as SUMATRA; professional boards like CRB and ERB. executive
agencies such as TANROADS, TRC, TAZARA, THA, TAA, TCAA, as well as professional associations
such as ACET, IET, TACECA, and other NGO‘s and user associations such as TARA, TABOA, TATOA,
etc; Cooperative and farmers, and the general public. Indeed transport is one of the sectors that touch
the lives of all the people in one way or another.
3.1.5
Important Pre-requisites for Achieving TSIP Overall Goals
The main focus of TSIP is to implement the National Transport Policy of 2003 strategies. TSIP is
intended to achieve the following; contribute to achieve the basic strategic goals that include the MDG’s
by 2015, lead to overall economic growth and hence reduction of poverty geared to achieve the goals of
National Development Vision 2025 and to enable the transport sector grow at a sustained rate of at
least 12% per year by 2015. To achieve this TSIP will specifically need to do the following:
3.1.6
(a)
Create the necessary conditions for increase of the provision of efficient and effective
transport services to meet the demand envisaged in the hinterland;
(b)
Address the transport needs of all regions in Tanzania;
(c)
Complete and further develop and integrate national and international transport
infrastructure;
(d)
Attract more resources from government, private sector and international organisations
to finance the transport sector;
(e)
Improve roads to enable production for exports, food sufficiency and national
integration; and
(f)
Improve traffic movements within urban areas.
Planning, Budgeting and Reporting
For the huge program such as TSIP, the planning and budgeting procedures to be followed are usually
outlined. This also involves outlining the existing implementation framework and/or process as well as
the reporting mechanisms. Generally TSIP will be an instrument for improved coordination and
facilitation and for guiding investments towards transport sector priorities.
The planning of TSIP activities in MoID, PMORALG and MoPSS are coordinated by the TSIP
Secretariat. TSIP activities are mainstreamed in the government planning process. Annual plans derived
from this process will form the basis of budget preparations. It is further expected that in order to
implement TSIP components and sub components, it will be necessary for the lead ministries to identify
and cost in detail the agreed interventions.
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3.1.7
Cross-cutting Issues
Issues such as environmental management, enhancing safety in transport sector, combating human
Immuno-deficiency virus/acquired immune deficiency syndrome (HIV/AIDS), gender mainstreaming;
human resource development and Information Communication Technology (ICT) issues are of
relevance in the sector.
3.1.8
Sub-sector Investment Programmes
Different sub-sectors exist within the transport sector institutions. Such sub-sectors include the road,
railways, air, marine and pipeline transport. The ongoing and proposed projects for TSIP phase 1 are to
be derived from these sub-sectors.
3.1.9
Financial Estimates
Estimated funding requirements for the first phase (2006 – 2011) of TSIP implementation, based on the
existing funding sources are indicated in Table 3.1. Note that, the TSIP provides the framework for
rationalising funding. The estimates will be refined on a regular basis. An increase of the investment in
transport projects is inevitable during the TSIP implementation. The investment for the transport project
is therefore expected to grow at a pace of 12 percent per annum.
Table 3.1: TSIP Financial Estimate for Phase I: 2006 – 2011
Estimated Amount
Sn
Area of Intervention
(US $)
1
Trunk and Regional Roads
1,878,010,000
2
Rural and Urban Roads
1,435,000,000
3
Railway Sub Sector
1,934,641,000
4
Sea and Inland Ports
332,200,000
5
Airports and Aviation Sector
141,270,000
6
Multi modal Transport/Institutional Support
30,000,000
7
Total
4,316,121,000
3.1.10
Monitoring and Evaluation
Monitoring and evaluation of the TSIP will be an ongoing exercise whose objective will be to provide
information at different levels of the TSIP with a view of solving implementation problems and assess
progress in relation to what has been planned. It will use systematic collection of data on specified
indicators to locate the use of allocated funds and other inputs. It will also be used to track progress of
activities and achievements of pre-determined targets or objectives. Monitoring will provide an early
warning system when things go particularly well or bad.
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3.1.11
(a)
Strengths and Weaknesses of TSIP
Strengths
i.
TSIP serves more than one sub-sector. In addition to the road transport, the programme serves
railways, sea and air transport. Note that, TSIP have also acknowledged a number of key
stakeholders.
ii.
The cross-cutting issues identified by the TSIP include environmental management, safety
enhancement in transport sector, combating HIV/AIDS, gender mainstreaming, human resource
development and ICT. This will form as part of the major input in the current analysis of the crosscutting issues related to the road sector.
iii.
The costing exercise will therefore benefit from the information on the sub-sectors served by
TSIP, the list of key stakeholders as well as cross-cutting issues particularly in identifying crosssectoral issues, cross-cutting issues and synergies.
iv.
Proposed investment (or development) for the second phase of 10 years Sector Development
Programme will include development projects for trunk and regional roads, maintenance works for
trunk and regional roads and institutional development and capacity building. Projects to be
considered for the programme include ongoing projects which will spill over to the second phase.
The list of trunk and regional road projects as well as institutional support will also form an
important input in developing the sectors needs and the respective interventions.
(b) Weaknesses
Despite the above strengths, the transport sector has weaknesses which will need to be addressed to
grow sufficiently to support the envisaged economic growth for poverty reduction. These weaknesses
include:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
uncoordinated development initiatives in both infrastructure and service;
fragmented transport activities carried out under four ministries;
inadequate transport infrastructure in the country;
inadequate funding for transport infrastructure maintenance;
low levels of safety associated with provision of poor transport services; and
financial estimates are based on programmes/rather that interventions.
TSIP financial estimates are based on programmes and/or projects rather than interventions. While the
project approach is easy to manage, it lacks details of the kind of activities and sub activities necessary
for the sector to be able to accomplish its mission. The intervention approach is therefore
recommended.
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3.2
Tanzania Country Study-Road Sector
The MDGs are a set of quantified and time bound goals intended to improve conditions of mankind
around the world by 2015. These goals were agreed by all UN member States and later on approved
during the Monterrey conference on Financing for Development and the 2002 World Summit on
Sustainable Development in Johannesburg. While many countries have made significant progress
towards meeting the set goals other countries are far off track from achieving the targets unless
dramatic progress is made. Note that, these MDG countries are mainly concentrated in Sub Saharan
Africa, among other regions.
In an attempt to identify the range of interventions and investments required to achieve the MDGs in
Tanzania, Economic and Social Research Foundation (ESRF) in collaboration with Millennium Project
(MP) conducted a Country Study on Millennium Development Goals Needs Assessment.
(a)
Need for Definition of the Rural Roads
Road sector is mentioned in the Rural Development Strategy (RDS) and Agricultural Sector
Development Strategy (ASDS) which despite providing a definition of Rural Sector have not clearly
defined the kind of roads required for rural and agriculture development.
The total available classified network is 85,000 km – out of which 10,300 km is trunk roads, 24,700 km
is regional roads, 20,000 km is district roads, 2,450 km is urban roads and 27,550 km is feeder roads.
MKUKUTA makes reference to rural roads not clearly mentioned in the road network. Clarity is therefore
required on what rural roads mean in reference to the road network presented earlier. The ESRF - MP
study does not provide a definition of rural roads.
(b)
Contribution of Road Sector to MDG Targets
Only 3,801 km of the road network is paved while the remaining network is unpaved. The paved roads
are equivalent to 0.11 km per 1000 people, a ratio that is very low even compared with other low-income
countries. The required ratio is 0.5 km per 1000 persons! What would be the contribution of roads to
rural and agriculture development if the ratio of 0.5 km is achieved?
The study points clearly that agricultural production has declined. However, it does not say what is the
role or contribution of road sector in agricultural production? How will the road sector contribute to
reduction of hunger under MDG 1 (Reduction of Extreme Poverty and Hunger). The current analysis
therefore needs to demonstrate on how the road sector interventions will attain the MKUKUTA as well
as MDG outcomes. The sector linkages and synergies for example can be useful in demonstrating such
sectoral contributions.
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(c)
Accuracy of Information on Existing Road Network
The country study has noted a number of constraints to road sector development in the country. For
example, it is noted that Tanzanian road (network) density is extremely low. As if that is not enough, the
requirement of reaching 0.5 km per 1000 people is a major change that requires substantial investment.
This is almost five-fold increase in paved roads i.e. attainment of 20,000 km of paved road. There are
also institutional as well as operational constraints. The study suggests increasing the existing road
network by a factor of five.
Given these findings, at least US $ 13 per capita per annum is required for the road sector from 2005 –
2015 to make a significant dent on achieving MKUKUTA - MDG targets. It is therefore recommended
that the following are considered during the course of the current exercise.
(i)
There is a need to know the paved km by the time of the implementation of the program
(ii)
There is a need to know the km currently under construction, and what does it cost per km,
types of roads, and technology used;
(iii)
It is important to match road development and potential economic activities i.e. where the
roads pass;
(iv)
There is a need to project the current speed of implementation and where the country will
be by 2010; and
(v)
Resource Requirements.
The country study projections of the resources required by the road sector in year 2010 and 2015 are
US $ 8.15 billion in 2010 and US $ 8.79 billion in 2015 up from US $ 7.5 billion in 2005. This is
equivalent to spending US $ 19.4 and US $ 19.1 per capital in 2010 and 2015 respectively, for the roads
sector. The present study will consider these findings after taking into i consideration a few changes
which have occurred.
3.3
Ten-Year Road Sector Development Plan
The Government, in year 2000 engaged Phoenix Engineering and Research Ltd to provide necessary
consultancy services to develop an optimum Ten Year Road Sector Development Programme
(10YRSDP), for roads, bridges and ferries. The study was earmarked to cover all classified road
network of Tanzania mainland and Zanzibar for a period of 2001/02 – 2010/11.
The consultant drew three macroeconomic scenarios and traffic growth patterns, which are realistic
growth, development and pessimistic. In realistic growth scenario it was assumed the GDP average
growth was 5.5% per year. For development and pessimistic was 7% and 3.25% respectively. The
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forecast of traffic growth on Trunk roads was estimated to be the percentage of the GDP average
growth for each scenario whereas for regional roads was estimated to grow at 4% each year.
3.3.1
(a)
Selection Criteria
Roads under Development
Selection of trunk and regional roads under development programme was based on importance in
economic sectors namely:
(i)
Agriculture;
(ii) Mining;
(iii) Tourism; and
(iv) International cargo transport.
(b)
Roads under Maintenance
The Maintenance programme for trunk and regional roads network was established at road section level
on the basis of:
(i)
Economic importance;
(ii) Condition of the pavement; and
(iii) Development works programme.
3.3.2
Financing Requirements
The Financial requirement for the 10YRSDP for trunk & regional roads on development and
maintenance programme is shown in table 3.2 below:
Table 3.2: Funding requirement for the 10 years RSDP
Trunk Roads
Programme
Planned
Total estimated
Alternatives
Length (km)
Budget (x million $)
A: Minimum Programme
Development
3,721
1,240.5
Maintenance
SM6
388.8
Total
1,629.30
B. Desirable Programme
Development
6,005
1,589.3
Maintenance
SM2
411.9
Total
2,001.20
C. Idealised Programme 4
Development
9,011
2,172.7
Maintenance
SM1
413.7
Total
2,586.4
4
Regional Roads
Planned
Total estimated Budget
Length (km) (x million $)
6,421
All
211.645
434.570
646.215
7,773
All
248.064
613.951
862.015
13,088
18,585
404.678
719.300
1,123.978
This model is financially unconstrained, hence it is recommended to be used for costing under MKUKUTA
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(a)
Development and Maintenance – Trunk Roads
The economic analysis of development works composing the preliminary programming for the
improvement of the trunk roads network has been carried out with Highway Development Model 4
(HDM4) software using the method of Life Cycle Analysis. Likewise maintenance works has been
associated with 3 maintenance strategies providing the decreasing levels of maintenance.
(b)
Development and Maintenance – Regional Roads
For trunk and regional roads, maintenance intervention measures have been categorised into 7 different
strategies and thus costs differ in each case. In the study strategy SM1 and SM2 has been used for
Idealised and Desirable programmes while SM6 for Minimal programme which outlines that:
(i)
(ii)
(iii)
Strategy SM1

Road sections not programmed for development works (excluding “not important”
sections) receive routine and periodic maintenance; and

Road sections programmed for development work: routine and periodic maintenance is
executed up to two years preceding the development works realisation. After works
implementation road sections receive routine and periodic maintenance.
Strategy SM2

Road sections not programmed for development works: all “high importance” sections,
irrespective of pavement conditions and, “medium importance” sections having the
pavement in good or fair conditions, receive routine and periodic maintenance; the
remainder sections receive routine and spot improvement; and

Road sections programmed for development works: routine and spot improvements is
executed up to two years preceding the development works realisation. After works
implementation road sections receive routine and periodic maintenance.
Strategy SM6

Road sections not programmed for development works: all “high importance” sections,
regardless of pavement condition receive routine and periodic maintenance; the
remainder sections receive routine and spot improvement; and

Road sections programmed for development works: routine and spot improvement is
executed to two years preceding development works realisation; after works
implementation road sections receive routine and periodic maintenance.
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
3.3.3
Consultant’s Recommendations
The Consultant recommended:
(a) Adopt desirable programme D-1 since it supports the macro-economic objectives set
up by the GoT for the period 2001-2010; and
(b) The financing for development works is 10% and 90% sourced from GoT and
Development partners respectively. On the other hand for Maintenance works, GoT
and Development partners contribute 95% and 5% respectively.
In order to close the financial gap it is required to do the following:
i.
ii.
iii.
iv.
3.3.4
increase the allocations from the national budget;
improve the cost effectiveness and management of the development and maintenance
cost;
widen the international contribution; and
improve road fund collections.
Shortcomings of the Study
(a)
Road network under local authorities was not included in the study;
(b)
Recommended programme for implementation (Desirable D-1) does not include the entire trunk
and regional roads network; and
(c)
Program interventions need to be updated to bring in MKUKUTA clusters.
3.3.5
National Rural Transport Programme (NRTP)
The Government of the United Republic of Tanzania (URT) through PORALG in collaboration with the
Royal Kingdom of Norway through Norwegian Public Roads Administration (NPRA) initiated the
National Rural Transport Programme (NRTP). This programme will be incorporated into the ten-year
road sector development programme (10YRSDP) which is planned to start FY 2005/06.
(a)
Objective, Target and Approach
The objective of the programme is to support national strategies on rural development and poverty
reduction through capacity building and development of the rural transport.
The target is to support sustainable development of the road infrastructure.
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The participatory approach will be used during the period of implementing the programme. In addition to
this the following will be considered:
(ii)
Technical Assistance will be provided under this programme to bridge the existing capacity
gaps as well as experience shoring;
(iii)
The programme will be implemented at three levels;
 at PMORALG central level whereby policy issues will be translated and make
guidelines to be used by engineers and other field staff ;
 At Regional level, the Regional Secretariat Engineer – roads will support the district
engineers with technical advice; and
 At district level, the District Engineers will be responsible for the overall implementation
of the programme including selection of the roads to be included in the programme.
(b)
Programme Components
The programme will consist of two main components namely:
(i)
Institutional capacity building; and
(ii)
Rural transport component.
(c)
Planning For Rural Transport Component Development
The following philosophy will be adhered to while carrying out Physical Infrastructure (PI) Interventions:(i)
The programme will look into stabilising the rural road network by increasing access
through spot improvements; and
(ii)
The program will protect the roads already in maintainable standard by paving them either
by low cost seals or upgrading them to bituminous paved standard. Finally, upgrading of
roads leading to areas of social economic importance will be implemented.
Indicative magnitudes of road intervention are shown in the table 3.3 below:
S/N
1
2
3
TYPE OF
INTERVATION
YEARS
Upgrading to
paved standard
Spot
improvement
Rehabilitation to
gravel standard
Table 3.3: Indicative magnitudes for road intervention
YEARS OF IMPLEMENTATION
Preparatory phase NRTP – 1 (km)
TOTAL
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 (KM)
0
0
0
100
100
300
400
500
600
1,900
500
600
600
800
800
3,400
200
300
750
1,000
1,000
3,250
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Apart from the above intervention, trials on the application of low costs seals will be undertaken from
year zero up to the end of the programme.
The proposed budget for funding the preparatory phase as well as NRTP phase 1 is as shown in table
3.4.
Table 3.4: Proposed budget for funding the preparatory phase
YEARS OF IMPLEMENTATION
PREPARATORY PHASE
SOURCE OF
NRTP – 1 (USD MILLION)
(USD MILLION)
FUND
2005/06 2006/07
2007/08 2008/09
2009/10
NORAD
GoT and other
sources
TOTAL
(d)
2010/11
2011/12
5.00
8.00
8.00
8.00
8.00
8.00
8.00
0
0
33.00
60.50
85.00
109.50
119.50
5.00
8.00
41.00
68.50
93.00
117.50
127.50
Programme Justification and Expected Risks
The proposed programme supports the success of the country’s economy through reduction of transport
costs, facilitating increased levels of economic activity and the integration of domestic and foreign
markets. This will in turn increase the country’s foreign exchange earnings.
The programme is further justified on the grounds that it supports implementation of the following
policies and reforms:
(i)
(ii)
(iii)
(iv)
MKUKUTA;
Local government Reform;
Development of the domestic construction and consulting industries which would help
improve programme sustainability in the long term; and
Districts and feeder roads rehabilitation.
The following are the risks to be considered:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Delayed implementation of government reforms;
Road Fund base not increased to cover road maintenance requirements;
Availability of incentives for road staff at all level;
Availability of donors to support the programme;
Availability of adequate funding for the programme; and
Low capacity of implementation of council road projects.
This NRTP provides guidance towards better transport infrastructure and services which will in turn lead
to the development of other sectors including, education, agriculture, health care, access to water, and
general economic development.
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CHAPTER FOUR
4.0
CRITERIA AND METHODOLOGY FOR COSTING THE INTERVENTIONS
4.1
The Process
At the inception a two days stakeholders consultative workshop was organized by the then Ministry of
Works (MoW) in collaboration with the Economic and Social Research Foundation (ESRF) form 23 rd to
24 of August 2005. This workshop invited participants from the government, private sector, Civil Society
Organizations, Development Partners, the academia and research institutions. The objective of the
workshop was two folds:
 create awareness among stakeholders on the costing process.
 seek the stakeholders’ views on the approach and methodology.
 specifically discussions focussed on the assumptions, cross cutting issues, sectoral
linkages and synergies, sectoral needs assessment and the sectoral interventions.
Thus, after opening ceremony, the facilitators took time to guide participants on the workshop
procedure, objectives and what was expected of the participants. The emphasis was given to the major
activities participants were expected to do during the course of the workshop in plenary and group
discussion sessions. Two papers were presented during the workshop. The first paper on “Status of the
Road Sector, Sector Needs and Interventions” was presented by the Sector Ministry and the second
paper on “Proposed Approach for Costing MKUKUTA Interventions - The Road Sector” was presented
by ESRF.
General discussions i.e. questions and answers sessions followed the presentations where the
participants were given an opportunity to react to the presentations. Several clarifications were made
had to made for example, participants demanded a clear definition of rural roads and whether rural
roads are different from feeder roads. They also wanted to know when the ongoing study on the road
network under PMO-RALG will be accomplished.
Before breaking into groups the facilitators took some time to explain clearly on Terms of Reference of
the Group Work Sessions so than all the group members know exactly the kind of output the workshop
expect at the end. The whole evening of the first day of the workshop and the early morning of the
second day was spent on group discussions. The discussions covered 5 major topics namely Sector
Needs, Sectoral Linkages and Synergies, Cross Cutting Issues, Important Assumptions and the sector
interventions.
During the plenary session in day two of the workshop, each group presented the outcomes of the
discussions they undertook in the groups. The presentations were based on the 5 topics underlined
earlier. The session also highlighted the recommendations that each group had for the costing process
consideration. After the group presentations, another round of questions, answers and contributions
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session was opened where the participants received clarifications and recommended on issues that
might have been left out in the group discussion sessions.
In addition, 2 subsequent workshops were organized where members of the sector working group and
the drafting team peer reviewed the earlier drafts of the Road Sector Costing Report. The findings from
the preceding workshops are presented in the subsequent sections.
4.2
General Assumptions for Roads Sector Methodology
Costing is divided into three parts in line with the sub-sectors, which correspond to trunk roads, regional
roads as well as district, urban, feeder and community roads. The overall methodological approach is
based on several fundamental assumptions that can be generalised for all sub-sectors as outlined
below:
(a)
Costing is financially unconstrained. It is not based on current or past financial resource
availability or spending, but purely on the need for attainment of the targets. Other, nonfinancial constraints (e.g. regarding capacity) are taken into account. This means that, it
reflects the full resource requirements to maintain the current road network in addition to
resource increments required for scaling-up interventions to reach MKUKUTA targets and
MDGs;
(b)
All costs are in USD equivalent exchange rate for year 2005. Inflation is not taken into
account, so that actual required spending in nominal terms may be higher. For figures in
TSH that had to be converted into USD, the exchange rate was assumed to be 1,000
TSH/USD;
(c)
Estimated costs will match required expenditure if funds are spent as efficiently as
possible. It is assumed that there will be neither mismanagement nor leakages of funds;
(d)
All inputs required for road construction, rehabilitation and maintenance will be available
whenever needed;
(e)
The interventions have been categorised into major development and maintenance
activities i.e. construction, rehabilitation and upgrading for development works; and
routine and periodic/spot improvements for maintenance works. The costing will be based
on the unit costs for the above mentioned interventions in line with standard budgeting for
road sector. This categorisation into major interventions simplifies the costing exercise by
avoiding use of unit costs for detailed activities which are many and would make the
exercise cumbersome;
(f)
The unit cost of inputs will be derived from the national average rates for the interventions
based on the information from development and maintenance projects in the regions;
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(g)
Costing is based on the analytical framework, e.g. every intervention previously listed is
costed (after assessing the needs) with reference to the targets;
(h)
Interventions will follow different scaling-up paths. Technically, the scaling-up refers to the
way in which the overall costs are distributed over the entire period. For some
interventions like maintenance operations, which are carried out recurrently, the annual
costs are predetermined. For construction works, the cost will also be predetermined and
distributed annually over the period of the project;
(i)
Scaling-up choices are made based on non-financial constraints (especially regarding
capacity) and based on priorities (the cost for full implementation of quick wins are
considered within the first two years to the extent possible). It is assumed that through a
gradual and simultaneous scale-up of all interventions capacity constraints can be
removed; and
(j)
Projections for the post-2015 period are made based on the needs to maintain the MDG
level.
The level of costs will depend on the following variables:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
4.3
Method of executing works i.e. labour-based versus capital-intensive technology;
Category of the road to be constructed;
Geographical location, type of soil and terrain;
Overhead costs i.e. compensation and tender advertisement;
Costs fluctuations i.e. fuels, equipments and taxes;
Choice of technology and materials to be used;
Length and condition of the roads;
Study to identify intervention required (i.e. alignment, structures and cross-cutting issues);
and
Advocacy and sensitisation.
Demographic and Other Basic Parameters
The size of both the current as well as future population, the share of the rural and urban population and
the population growth rates strongly influence the demand for road network and therefore results of the
costing of the road sector. Thus MKUKUTA based MDG costing relies on data of the population census
of 2002. Population projections including the population figures for 2006 were made based on actual
growth rates between 1988 and 2002 for rural and urban areas. Table 4.1 presents results of population
projections for 2006, 2010 and 2015.
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Table 4.1: Population projections
Population
Value
census 2002 mainland
census 2002 rural
census 2002 urban
2006 mainland
2006 rural
2006 urban
2010 mainland
2010 rural
2010 urban
2015 mainland
2015 rural
2015 urban
Household size
4.4
33,461,849
25,907,011
7,554,838
37,559,171
27,932,773
9,537,809
42,158,200
30,116,936
12,041,264
49,202,780
33,088,852
16,113,927
5
Growth
Rates
Total
Rural
Urban
Value
2.93%
1.9%
6.0%
Percentage
2002 rural share
2002 urban share
2010 rural share
2010 urban share
2015 rural share
2015 urban share
Value
77.4%
22.6%
71.4%
28.6%
67.2%
32.8%
Analytical Tools
Costing analysis for road construction, rehabilitation and maintenance is carried out using two types of
software tools namely, the Highway Development Management (HDM4) and Road Economic Decision
(RED) Model. Choice of a tool to use depends on the type of road in question.
4.4.1
HDM4 Model
HDM4 model was developed to carryout technical and economic appraisals of road investment projects.
The model carries out life cycle analysis by predicting long-term pavement performance, effects of
maintenance standards and calculating annual costs. This model is ideal for paved and unpaved roads
with traffic volume of more than 300 vehicles per day (VPD).
The HDM4 strategy analysis applies the concept of “Network Matrix” which comprises of categories of
the road network defined according to key attributes that most influence pavement performance and
road user costs. When undertaking a strategic analysis, the physical road network may be categorized
into a matrix defined by user-defined parameters such as road class, surface type, and pavement
condition or traffic flow. This approach is particularly used for medium and long term network based
planning purposes by roads agencies responsible for thousands of kilometres of road network. It is
therefore cumbersome to make an analysis due to data hiccups.
4.4.2
RED Model
Road Economic Decision (RED) Model is another tool used for costing analysis for road construction,
rehabilitation and maintenance. RED model performs economic evaluation of improvements and
maintenance projects. It adapts the consumer surplus approach, which measures benefits to road users
and consumers at reduced transport costs.
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4.4.3
Adopted Tools of Analysis
The current analysis has employed HDM4 model alone mainly because the data set available could
better be analysed using this model than the Road Economic Decision Model. The Road Economic
Decision Model could not therefore be utilized. Before running the HDM4 Model, manual projections
were performed based on the major road interventions, unit costs and respective growth rates of costs.
Two sets of the findings have therefore been generated.
The findings from HDM-4 Model analysis show that, the ‘Unconstrained Programme’ total resource
requirement for the roads sector maintenance and improvement for the period of 10 years from 2006 to
2015 amounts to US $ 5,488,453. The roads network under the Ministry of Infrastructure Development
(TanRoads) requires a total of US $ 4,664,032 for maintenance and upgrading of trunk (US $
3,922,333) and regional roads (US $ 741,699). Out of this amount, a total of US $ 243,209 is for routine
and recurrent maintenance while US $ 128,086 is required for periodic maintenance and US $
4,292,737 is for development works. The roads network under the councils (PMO-RALG) requires a
total of US $ 824,420 consisting of US $ 374,045 for routine and recurrent maintenance while US $
450,375 is required for development works to the district, urban and feeder roads.
However, due to some limitations embodied in HDM-4 Model of analysis which includes the fact that it
considers paved and unpaved roads with traffic volume of more than 300 vehicles per day (VPD), the
costs of interventions in the roads sector were also estimated manually for both comparison as well as
ensuring accuracy and validity of the findings5. Note that while HDM-4 Model considers paved and
unpaved roads with traffic volume of more than 300 vehicles per day, in reality Tanzania have a huge
roads networks especially those under PMO-RALG with traffic volume less than 300 vehicles per day.
Thus the approach and findings presented in the subsequent sections are based on the manual
estimates alone which reflect crude estimates for F/Y starting 2005/06 to F/Y 2014/15. These findings
are expected to be improved when the new data set of the trunk and regional roads network in Tanzania
are incorporated at a later stage.
4.5
Interventions, Intersectoral Linkages and Cross-cutting Issues for
MKUKUTA and MDGs Targets
Consultative workshop for road sector which met on 23 – 24 August, 2005 identified interventions,
intersectoral linkages and cross-cutting issues required for road sector to contribute effectively towards
attainment of MKUKUTA and MDGs targets.
5
HDM-4 Model considers paved and unpaved roads with traffic volume of more than 300 vehicles per day. However, in
reality Tanzania have a huge roads networks especially those under PMO-RALG with traffic volume less than 300
vehicles per day.
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4.5.1
(a)
The Interventions and Quick Wins
Major Interventions
Following the needs assessment consultative workshop in August 2005, the interventions below were
identified:
(i)
Ensure that 50% of the entire road network is in good condition by 2010;
(ii) Maintain (routine and periodic) all roads in good and fair condition annually by 2010;
(iii) Rehabilitate 2,420 km of unpaved district, urban and feeder road networks annually (which
makes 24,200 km by 2015);
(iv) Upgrade 484 km of unpaved district, urban and feeder road network to paved roads annually
(which makes 4,840 km by 2015). The target for each council is to pave 4 km per annum;
(v) Rehabilitate a total of 7,410 km of both trunk and regional roads annually;
(vi) Construct to paved standard 200 km of trunk roads annually; and
(vii) Provide technical support.
(b)
The Quick Wins
The quick wins of the road sector includes all road projects which are not only short term but also with
rapid outcomes. Thus, the quick wins of the road sector may be any of the 7 broad interventions listed in
(a) above. In other words, any maintenance (routine or periodic), rehabilitation, upgrading, construction
works, or technical support is the quick win for the road sector provided it entails a rapid impact and/or
results to the community.
A number of criteria are used by the road sector to identify the quick wins. These criteria include
accrued economic benefits, the extent of poverty reduction, employment generation and savings in
vehicle operating costs. Others are savings in maintenance costs, access to social services, reduction in
travel time, improve marketability and macroeconomic stability. So for example, a road project which
improves the road network in terms of achieving high connectivity or accessibility to bituminised roads
will automatically qualify. In addition and given the national priorities, importance of the agricultural
sector with respect to cash crop production, food crop production; importance of the mining sector;
importance of the tourism sector; and importance in the international transit trade with neighbouring
countries are also taken in to account. The road projects listed in appendix 1 have therefore been
identified as quick wins for the road sector6.
4.5.2
Inter-sector linkages and synergies
Multiple and/or concurrent interventions (or investments) are required across many sectors to be able to
achieve certain targets or goals in the road sector. For example, quarrying and energy production are
two important interventions in the mining and energy sectors respectively for some road maintenance
6
Note that, this list does not include trunk roads and the road network under PMO-RALG.
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outcomes to be realised in the road sector. Thus, this section makes an analysis of inter-sectoral
linkages and services from other sectors.
(a)
Lands Sector
Roads sector needs collaboration with land sector. For example, before a road is constructed there is
need for a co-ordination between the two sectors with respect to compensation, surveying and mapping.
(b)
Water Sector
Construction, rehabilitation, maintenance and repair of roads need water resources from water sector. A
close link with the water sector is therefore necessary in order to ensure sustainable supply of water
from various sources. In some areas rationing of water is inevitable to avoid denying water to other
users.
(c)
Environment Sector
Roads construction, rehabilitation, maintenance and repair can be destructive to the environment.
During road construction, trees are cut; dust and smoke are emitted from construction sites; and
sometimes there is water contamination from oils, fuel, dust and smoke. There is a subsequent need to
collaborate with the environment sector, and adhere to Environmental Impact Assessment (EIA)
principles.
(d)
Tourism Sector
Tourism sector is one of the fast growing sectors in the service industry which contributes positively to
the GDP. In order to boost tourism, tourist sites like national parks, hotels and beaches must be easily
accessible. The road sector plays an important role in assuring that these areas have passable roads
throughout the year. Also, the sector must take strict measures along roads passing through tourist
areas in order to protect flora and fauna.
(e)
Energy Sector
Modern road works cannot be implemented without use of machinery and equipments. These
machinery and equipments require energy in the form of fuel and electricity. Collaboration with the
energy sector is therefore important for the road sector to have adequate supply of fuel for road
construction. In other road activities, there is a need to use electricity. Coordination between the two
sectors will therefore facilitate the attainment of sectoral objectives.
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(f)
Mineral Sector
Roads construction, rehabilitation, repairs and maintenance requires inputs from mineral sector. In order
for the road sector to have good roads, selection of construction materials from industrial mineral type is
of great importance. These materials include: stones, aggregates and sand; limestone; clay; red soil;
pozzolana; and marble. On the other hand, the roads network plays a key role for the mineral sector’s
performance.
(g)
Private Sector
Good roads attract not only private sector investments but also Foreign Direct Investments (FDIs).
Tanzania is rich in natural resources like minerals and timber. Likewise vast areas are good for
agriculture. Investments to these areas need good roads to ensure easy accessibility of the respective
areas by potential investors. Roads construction and maintenance is therefore of high priority for
investors to invest in these areas. Interventions to be applied here will be upgrading and rehabilitation of
roads, use of labour based technology and promotion of local contractors.
(h)
Employment
As noted earlier, one of the objectives of the road sector is to contribute to economic development and
poverty reduction by creating employment in infrastructure investments technologies (LBT). Road sector
plays an important role in employment creation in community based construction and maintenance of
rural roads. of the targeted areas of interventions expected to create jobs will be through the use of
Labour Based Technology (LBT), improved capacity of local contractors and consultants, and women
participation in road sector (where clients are encouraged to employ women). This is linked with the
operational target of reducing unemployment from 12.9% in 2000/01 to 6.9% by 2010 and address
underemployment in rural areas. As contained under Cluster 1 - Growth and Reduction of Income
Poverty.
(i)
Agriculture
The road sector has a direct linkage with agriculture in attainment of MKUKUTA cluster 1 which is
Growth and Reduction of Income Poverty. It has also a direct link to MDG 1 on eradicating of extreme
poverty and hunger. Provision of feeder roads for example, will provide access for agricultural products
from the farm gate to the markets around the world as well as facilitate distribution of farm inputs.
(j)
Macroeconomic Stability
List of areas of interventions is through improvement of roads which will have an immediate impact of
lowering transport cost and time delivery of goods and stimulation of production activities. The ultimate
impact will be enhanced macroeconomic stability. Road sector plays an important role of ensuring that
the operational target of accelerated GDP growth rate of 6-8% per annum is attained by 2010. The
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linkage is for all sectors. Intervention to be used in attaining that GDP growth rate will be through
upgrading and rehabilitation of roads. In attaining the operational target of repaired 15,000 km of rural
roads annually by 2010 from 4500 km in 2003 the sector will have impact (linkage) to all other sector in
achieving their targets.
(k)
Marketing
The sector is directly linked in attaining the operational target - secured and facilitated marketing of
agricultural products through improved transport systems, leading to lowered transport costs and
improved marketing.
(l)
Transportation and Urban Development
Road sector plays an important role in urbanisation that accelerates demands for social services like
education, health and water. For example the construction of Manyoni – Tabora – Kigoma Road will
increase tonnage transportation from the present 2 to 12 million tons a year. Tabora town will expand
twice in 5 to 10 years after road completion and there will be a boost of not only demand for social
services but also economic activities.
(m)
Education
Improved road network is fundamental if education sector has to achieve its set goals in the country.
The link between the two sectors is very close. For example, roads are important for procurement of the
teaching materials. Roads make it possible and easy to transfer teachers to remote areas. Roads can
ensure retention of teachers in different parts of the country. Construction of new school buildings and
therefore increasing the number of schools may not be feasible where roads are poorly developed.
(n)
Health
Road transport facilitates access to medical services. A good road network can reduce the number of
prevalent cases of diseases like malaria by paving potholes, fill in pits and drain ponds. Areas with poor
road network have experienced problems such as attacks from wild animals, and difficulties to cater for
the handicapped especially in rural areas.
(o)
Trade and Industries/Business Community
To meet the growing demand around the world, manufacturers and members of the business
community need to transport raw materials to factories to produce finished goods, which in turn are
transported back to the market for consumption. Transportation and therefore the road network forms
the backbone of local, regional, national and international trade, making most economic activities
critically dependent upon this resource. Thus, as noted earlier, roads infrastructure is not only an
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important factor for the private sector development but also the gateway for prosperity of the business
enterprises in the country.
4.5.3
(a)
Cross-cutting Issues
HIV/AIDS
HIV/AIDS has been declared a national disaster that must be addressed accordingly. It is reducing
production and productivity in many sectors of the economy due to loss of labour force. In an effort to
address this problem, the road sector is carrying out various interventions aimed at curbing the spread
of HIV/AIDS. Some of these interventions include:-
(b)
(i)
HIV/AIDS awareness campaigns;
(ii)
Promotion of voluntary counselling and testing for HIV/AIDS to individuals in the road
sector;
(iii)
Mainstreaming HIV/AIDS into the road sector planning and budgeting process; and
(iv)
Carrying out capacity building programmes for key personnel dealing with HIV/AIDS.
Gender
In the efforts to reduce the gender gap and/or gender inequities which have been prevalent in the
country thus, affecting household productivity and general welfare of members of the communities
especially in the rural Tanzania, gender balance in road sector is being encouraged during road
construction. For big projects, women participate in various activities such as: excavation of catch water
and mitre drains, cleaning of inlets and outlets of bridges and culverts and reshaping of side drains. In
addition, they are deployed as flag women and helpers during bridge and culvert construction whereby
they collect water for construction purposes and water for curing. In labour based projects women
participate fully almost in all activities such as: grubbing, spreading of soil, sloping works and excavation
during road formation. Also they participate in gravel spreading.
For the purpose of promoting employment opportunities for women, some clients introduce incentives to
contractors which encourage them to employ women. For example, the labour based project in
Mwanza region under decentralisation programme sponsored by UNDP/UNCDF has specific incentives
which encourage contractors to employ more women. Also, under this Programme awareness meetings
for encouraging women to participate in road construction were organised in those villages which are
served by the project road.
At regional and district levels, contractors are encouraged to employ women not only for works which
are done by hand, but also operating equipment and other technical activities. Experience has shown
that, most contractors have been responding positively.
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(c)
Environment
One of the achievements in the road sector is the finalisation of Sustainable Development Strategy for
Environmental Management (SDSEM) in the Road Sector 2003 – 2005, and Road Sector
Environmental Management Guidelines (RSEMG), which was used to develop Environmental
Assessment Training Manual for Roads Sector Stakeholders (EATMRS) Part I. These documents are
now in use and every road project being undertaken has to carry out EIA.
4.5.4
Contribution of Road Sector to MDGs
Contribution of the sector to MDGs targets can be gauged through the following windows:
(a)
Extreme Poverty and Hunger
As noted earlier, normally the road sector adopts LBT interventions. LBT creates employment for poor
people, and the income generated from such projects ensures food security, accessibility to health and
education by communities. Construction of roads especially in rural areas enhances labour productivity
by transporting farm inputs and agricultural produce to the markets. Roads are essential to the business
community and an important link between productive areas and markets or food surplus areas and food
deficit areas. Road transport facilitates distribution of food especially during drought season.
(b)
Achieve Universal Primary Education
Roads are very important in providing accessibility to schools. Construction of schools, teacher’s
willingness to be transferred to remote areas and availability of teaching materials depend much on
accessibility to the respective areas. Roads are therefore desirable for the achievement of universal
primary education.
(c)
Promote Gender Equality and Empower Women
Empowering women economically will accelerate development of this country. Road sector has a direct
role of promoting gender equality and equity through LBT. Since in most areas women are farmers, road
transport enables them to reach farms and markets. This is a direct linkage and/or contribution to
women empowerment.
(d)
MDG Goal 4 and 5: Reduce Child Mortality and Improve Maternal Health
Road transportation facilitates transportation of medical services for maternal and child immunisation to
different areas. It also facilitates accessibility to hospitals, health centres, clinics and dispensaries with
medical facilities, personnel, and drugs. Thus, a good road network facilitates provision of health and
education services.
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(e)
Combat HIV/AIDS, Malaria and Other Diseases
Road transport facilitates access to medical services, sensitisation and awareness programmes
HIV/AIDS awareness and sensitisation seminars and workshops can be conducted easily in these
areas. HIV/AIDS campaigners tend to ignore remote areas because of the difficulty of reaching them. A
good road network is important for a speedy and timely provision of health services.
(f)
Ensure Environmental Sustainability
As mentioned earlier EIA) studies are carried out in all road projects to ensure that they abide to
environmental standards before, during and after construction. Also, road construction companies are
required by law to abide to environmental rules. Some of these rules include: reduction in smoke
emission from construction equipments, reduction of dust emitted from construction sites, avoidance in
water pollution and unnecessary tree cutting.
(j)
Develop a Global Partnership for Development
Roads enhance regional cooperation by extending link with bordering countries. This facilitates crossborder trade. Increased assistance from development partners will accelerate further roads
development. Development partners insist on good roads construction especially to areas with
economic importance.
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Table 4.2: Summary Matrix to show Inter-sectoral Linkages required for road sector towards the attainment of MKUKUTA and MDG targets
Operational Target
MKUKUTA Cluster strategies
Linkage to MDG targets
Intervention
Macro-economic stability
Sustain efforts to contain inflation to a level close Eradicate extreme poverty & hunger
Supply side interventions through
maintained
or equal to that of major trading partners by
improved road infrastructure resulting in
pursuing prudent fiscal and monetary policies
Develop a global partnership for development
low transport costs and timely delivering
of goods and services.
Reduced unemployment from Create employment in communities through
Eradicate extreme poverty & hunger
o Rural roads maintenance
12.9% in 2000/01 to 6.9% by community based construction and maintenance
o Use of labour based technology
2010 and address
of rural roads. This has the following positive
Promote gender equality and empower women
o Women employed in the road sector
underemployment in rural
linkages:
o Improved capacity of local
areas
contractors
 Improved health services
 Improved education services
Accelerate GDP growth rate
Modernise and expand trunk roads connections, Eradicate extreme poverty & hunger
Improve and expand trunk road
to attain growth rate of 6-8% ports, and airports and transport services e.g. in
connections
per annum by 2010
development corridors through enhanced public
–private partnerships.
Increased agricultural growth
Eradicate extreme poverty & hunger
Trunk, regional, rural, feeder roads
from 5% in 2002/03 to 10%
development
by 2010
Promote gender equality and empower women
Rehabilitated 15,000 km of
rural roads annually by 2010
from 4,500 km in 2003
Provide adequate level of physical infrastructure
needed to cope with the requirements of poverty
reduction targets
Involve rural communities in construction and
management of rural roads
Increased food crops
productions from 9 million
tones in 2003/04 to 12
millions tons in 2010
Secured and facilitated
marketing of agricultural
products
Improved access to inputs by subsistence
farmers through targeted inputs subsidy to
selected food crops and increasing accessibility
to micro finance credit
Improve transport systems, thus lowering
transport costs and improve marketing to ensure
high profit margins for producers
o Eradicate extreme Poverty and hunger
o Achieve Universal Primary Education (UPE)
o Promote gender equity and empower women
o Reduce child mortality
o Improved maternal Health
o Combat HIV/AIDS, Malaria & other diseases
o Ensure environment sustainability
o Develop global partnership for development
Linked to MDG goal 1- Eradicate Extreme
Poverty and Hunger
o
o
Eradicate extreme poverty and hunger
Global partnership enhanced (through
WTO negotiations)
Rural road rehabilitation
Involve local people in road works
through labour based technology.
Provision of infrastructure
Labour based technology works
o
o
o
Improve transport system
Provision of infrastructure i.e. roads
Invest in infrastructure
Operational Target
Increased gross and net
enrolment of boys and girls in
primary schools from 90.5%
in 2004 to 99% in 2009
Increased proportion of rural
population with access to
clean and safe water from
53% in 2003 to 65% in
2009/10 within 30 minutes of
time spent and collection of
water
Increased urban population
with access to clear and safe
water from 73% in 2003 to
90% in 2009/10
Improve passable (good/fair
condition rural) roads from
50% in 2003 to at least 75%
in 2010
MKUKUTA Cluster strategies
Invest in infrastructure and widen access to
markets within the country , region and
internationally to increase productivity and
incomes in agriculture
Ensure all children with disabilities, orphans, and
other most vulnerable children are able to
effectively access and compete high quality,
child friendly and gender sensitive primary
education
 Increase sustainable access
to inexpensive and reliable
sources of water in both
rural & urban areas
Linkage to MDG targets
 Sustainable management of
catchments forest areas
o
o
o
o
o
o
o
o
o
o
o
Ensure environmental sustainability
Promote gender equity and women
Improved material Health
Combat HIV/AIDS, Malaria and other
diseases
Ensure environmental sustainability
Eradicate extreme poverty & hunger
Achieve Universal Primary Education
Promote Gender equality & empower
women
Reduce child mortality
Combat HIV/ADIS, Malaria & other diseases
Develop a global partnership for
Development
o Apply lifeline tariffs that ensures affordability .
of access to water, focusing in untameable
household including older people headed
households
o Implementation of the Policy and water
regulation frameworks
Ensure the basic infrastructure exists, in
All MDG targets
particular adequate facilities and network of
passable roads to enable the delivery of basic
social services.
Intervention
Provision of transportation to allow
children with disabilities to get to schools
and for schools to be accessible
Provide access for Non Motorised
Transport (NMT)
Roads to main water sources, sewage
ponds and protected catchments areas
Rehabilitation and upgrading of rural
roads
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4.6
Trunk and Regional Roads: Needs Assessment and Interventions, Unit
costs and Estimated Units required7
As noted earlier, a number of steps and specific technical assumptions for manual estimation of
the interventions related to trunk road and regional roads in Tanzania were considered. This
section outlines the major steps and technical assumptions made.
4.6.1
The Major Steps
In costing the interventions for the trunk and regional roads manually the following steps were adopted:
4.6.2
(a)
For each specific area of intervention, a package was identified. Each package was broken
down into activities, with each activity falling under a specific category (e.g. technical
equipment and tools, labour, staff recruitment and retention, and infrastructure construction,
rehabilitation and maintenance);
(b)
For each intervention the measurement unit and the unit cost were established;
(c)
For each intervention, it was estimated how many units are necessary;
(d)
The cost of one intervention was derived by multiplying the quantity of units needed with the
unit cost;
(e)
Total cost was computed by summing up the costs of all corresponding interventions;
(f)
Double costing was minimised by avoiding overlap between development and maintenance
activities. Some interventions were omitted because they do not add additional costs. Costs
for support departments and cross-cutting departments within the Road Sector have only
been partially included to circumvent an overlap with capacity building interventions; and
(g)
In areas where data was not available estimations were made through discussions within
the drafting team. Other estimates were derived from consultations and interviewing road
sector experts.
Sequenced Actual Costs of Interventions and Scaling up for 9 years Period
(2006–15)
After establishing the overall costs, the annual costs for the period between 2006 and 2015 as well as
the sequencing of the scaling-up of interventions were determined. The scaling-up of the interventions
was agreed to be gradual and simultaneous so that all constraints are removed so that they do not
prevent the attainment of the targets.
7
Needs assessment and interventions include inter-sectoral and cross-cutting issues.
Most interventions were carried out recurrently (i.e. monthly, yearly or every four to five years) so that
frequently, the costs per year were predetermined. Generally, all other interventions followed a linear
scaling-up path (e.g. the incremental number of new structures built per year remains constant).
To the extent possible, the cost of quick win interventions were considered in the first two years. Table
4.5 provides a summary of the sequenced costs for trunk and regional roads related interventions. Since
in the fiscal year 2014/2015 most costs will be recurrent, the projections for the years after 2015
coincide with the last year of the costing so as to maintain the MDG achievement. Apart from physical
interventions other interventions of capacity building, awareness creation and cross-cutting issues were
identified and costed separately because cost variables are different in nature and prices.
4.6.3
(a)
Technical Assumptions and Approach in Determining the Costing for Trunk and
Regional Roads
Roads Data Review
Available data was reviewed and tabulated. This include list of all on-going development works,
proposed roads for upgrading and roads requiring to be rehabilitated up to year 2012. The table
therefore provides kilometers and corresponding costs for the different interventions of rehabilitation,
upgrading and reconstruction. Unit costs are also provided for trunk, regional and bridges for
construction and maintenance (See tables 4.3 and 4.4).
(b)
Operational Targets
Targets to be achieved were also identified through reviewing available road sector targets, MKUKUTA
targets and MDG targets. These include:
(i)
MKUKUTA Targets
 expanding trunk roads connections;
 rehabilitation of 15,000km of rural roads (12,000km are under Local Government
Authorities)
 improve the condition of road network (good/fair condition road) from 50% in year 2005
condition to at least 75% in 2010.
(ii)
MDGs Targets
 Upgrading, construction and maintenance of paved roads.
(iii)
Other Targets
 Connect regional centres with paved and through roads to bordering countries and exit
ports.
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(c)
Maintenance Intervention
Maintenance is a continuous activity undertaken annually, which will extend throughout MKUKUTA and
MDG’s period (2005 to 2015). Roads in good and fair condition will receive full routine maintenance,
including completed road sections under development works in the following year.
Apart from receiving routine maintenance, road sections in good and fair condition will as well get
periodic maintenance annually at a distance equal to 1/7 and 1/5 of km in good and fair condition for
paved and unpaved roads respectively. Roads in poor condition will be improved through rehabilitation
or reconstruction activities. Spot improvement will be provided to poor roads, which are not planned for
intervention in a particular year.
(d)
Development Interventions
Rehabilitation, upgrading, reconstruction are the major interventions on trunk and regional roads. These
interventions will ensure both MKUKUTA and NON-MKUKUTA goals/targets to be attained.
(i)
Regional Roads
Under MKUKUTA, the target is to rehabilitate 3,000km of regional roads and 12,000km of District,
Urban, and Feeder Roads.
However, about 5,172km in total (out of 24,700km) of regional roads require rehabilitation. Only 3000km
are considered under the MKUKUTA interventions. Therefore 2,172km out of the planned kilometers
would require a different intervention of either spot improvement or backlog maintenance to bring them
into maintainable condition. The remaining length (19,528km) will receive routine and periodic
maintenance. Also those, which are rehabilitated, will revert to routine maintenance.
Table 4.3: Unit Rates for Trunk and Regional Roads - Development
TRUNK ROADS REGIONAL ROADS
TYPE OF INTERVENTION
UNIT COST IN
UNIT COST IN (x1000
(x1000.USD/km) USD/km)
Upgrading Gravel to Bitumen
400
300
Upgrading to Gravel
35
30
Rehabilitation - Paved
200
160
Bridges Construction
L/S
500
Supervision
8%
4%
Design works
4%
4%
Administration
1%
1%
Monitoring
0.10%
0.10%
Capacity building
0.10%
2%
Cross Cutting issues
0.25%
0.25%
Note: % is a percentage of total development works
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
42
Table 4.4: Unit Rates for Trunk and Regional Roads - Maintenance
TRUNK ROADS
REGIONAL ROADS
TYPE OF INTERVENTION UNIT COST IN
UNIT COST IN (x1000
(x1000 USD/km)
USD/km)
Routine - paved
1.48
0.04
Periodic - paved
Routine - unpaved
80
1.18
60.00
0.78
Periodic -unpaved
Backlog maintenance
25
35
20.00
30.00
Bridge maintenance
Supervision
2.5%
4%
3%
4%
Administration
Monitoring
Weigh bridge operations
Capacity building
Cross cutting issues
1%
0.1%
2.0%
0.25%
0.25%
1%
0.10%
0
2%
0.25%
Note: % is a percentage of total maintenance works
(ii)
Assumptions Specific for Trunk Roads

Tentative figure of 200,000 USD is assumed for six (6) bridges on trunk roads and one
ferry. Similarly 100,000 USD per bridge on regional roads is assumed and 10 bridges will
be constructed;

Development program will be executed as planned;

Development works will cover both rehabilitation and upgrading of all paved and unpaved
roads;

Maintenance lengths will increase as development programs get completed;

Lengths of unpaved trunk roads for maintenance will decrease proportional to development
lengths completed under upgrading to bitumen standard programs;

Total trunk roads length is 10,300km;

Cost for bridge maintenance is assumed to take 2.5% of the total maintenance works cost;

Headquarter based activities are assumed to cost 5% of the total maintenance works cost;
and

It is assumed that the trunk roads will grow at a rate of 5% over the ten year period.
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
43
(iii)
(iii)
Assumptions Specific for Regional Roads

Total length of 4,658.8 km of unpaved regional roads in poor condition will receive backlog
maintenance at a rate of 465km each year;

Length of road that will not receive backlog maintenance will get spot improvement;

Length of road that has received backlog maintenance will revert to normal routine
maintenance in the following year;

With this approach poor roads will be improved gradually until all are in maintainable
condition at the end of ten year period from 2005/06 to 2014/15; and

It is assumed that regional roads will grow at a rate of 5% over the ten year period.
Assumptions specific for TANROADS salary projections

Salary bill for FY 2006/07 is estimated at US $ 6,371,038.065

Salary bill will increase by 15% from FY 2006/07 to FY 2007/08

Minimal salary increase from FY 2008/09 to 2014/2015 is estimated at an average of 12.5%
per year to cater for:
o Anticipated salaries increase for public service
o Overall increase in staff complement in specific core posts
o Changes in staff mix

Salary includes basic salary, superannuation statutory contributions by employer, medical
insurance at 3%, and gratuities for long contract staff.
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
44
Table 4.5: Sequencing actual cost of interventions and scaling-up for 9 years period (2006 – 2015) for Trunk Roads
2005/06
Length (km)
ROUTINE
PERIODIC
BRIDGE MAINTENANCE
Total works
HO BASED ACTIVITIES
SUPERFVISION
WEIGHBRIDGE OPERATIONS
ADMINISTRATION
MONITORING
CR0SS CUTTING ISSUES
CAPACITY BUILDING
TOTAL
MAINTENANCE
WORKS(TRUNK)
TOTAL BUDGET TRUNK(DEV &
MTCE)
6,668
1334
3%
5%
4%
2%
1%
0.10%
0.25%
0.50%
1.18
25.00
7,868
33,340
2,202
90,294
4,515
3,612
6,668
1,334
98,421
2006/07
Cost (X 1000
USD)
7,868
33,340
2,202
90,294
4,515
3,612
1,806
903
90
226
451
101,897
Length (km)
5,932
1,186
-
-
419,884
26672
2007/08
Cost (X 1000
USD)
6,999
29,658
2,326
95,374
4,769
3,815
1,907
954
95
238
477
107,629
Length (km)
5,010
1,002
-
-
2008/09
Cost (X 1000
USD)
5,912
25,050
4,730
103,978
5,199
4,159
2,080
1,040
104
260
260
117,079
Length (km)
4,089
818
-
-
2009/10
Cost (X 1000
USD)
4,824
20,443
2,636
108,085
5,404
4,323
2,162
1,081
108
270
540
121,974
Length (km)
3,167
633
-
-
2010/11
Cost (X 1000
USD)
3,737
15,835
2,791
114,440
5,722
4,578
2,289
1,144
114
286
572
129,146
Length (km)
2,570
514
-
-
2011/12
Cost (X
1000 USD)
3,032
12,848
2,892
118,561
5,928
4,742
2,371
1,186
119
296
593
133,796
Length (km)
1,972
394
-
-
Cost (X 1000
USD)
2,327
9,860
3,014
123,588
6,179
4,944
2,472
1,236
124
309
618
139,469
Length (km)
1,375
275
-
-
2012/13
Cost (X 1000
USD)
1,622
6,873
3,093
126,802
6,340
5,072
2,536
1,268
127
317
634
143,096
Length (km)
777
155
-
-
2013/14
Cost (X 1000
USD)
917
3,885
3,193
130,923
6,546
5,237
2,618
1,309
131
327
655
147,746
Length (km)
180
36
-
-
Cost (X 1000
USD)
212
898
3,294
135,043
6,752
5,402
2,701
1,350
135
338
675
1,294,229
4,250,419
467,603
477,053
481,947
489,119
373,458
379,131
382,758
387,408
392,058
6,371.038
7,326.694
8,242.531
9,272.847
10,431.953
11,735.947
13,202.940
14,853.308
16,709.971
KM FOR ROUTINE MTCE PAVED
Regular mtce
kmfrom dev
3,632
3,632
736.47
3,632
736.47
3,632
736.47
3,632
736.47
3,632
736.47
3,632
736.47
3,632
736.47
3,632
736.47
3,632
736.47
921.514444
921.514444
921.514444
921.514444
921.5144444
921.514444
921.514444
921.5144444
921.514444
921.514444
921.514444
921.5144444
921.514444
921.514444
921.5144444
921.514444
921.514444
921.5144444
921.514444
921.514444
921.5144444
597.474444
597.4744444
597.474444
597.474444
597.4744444
597.4744444
597.474444
597.474444
597.4744444
597.474444
597.474444
597.4744444
597.474444
597.4744444
597.4744444
Total for routine mtce of paved
roads
Total for routine maintenance of
unpaved roads
3,632
-
4,368
-
5,290
-
6,211
-
7,133
-
7,730
-
8,328
-
8,925
-
9,523
-
10,120
10,300
10,300
10,300
10,300
10,300
10,300
10,300
10,300
10,300
10,300
10,300
6,668
5932
5010
4089
3167
2570
1972
1375
777
180
10300
0.025
0.025
2791.224743 0
115669.139
2
0.025
0.025
2891.72848 0
Total costs for routine & PM
88,092
Bridge mtce costs 5% of above
0.03
2,202.30
0.025
0
93047.56243
99248.03819
105448.514
0.025
0.025
2326.189061 0
0.025
0.025
2481.200955 0
0.025
2636.212849
111648.9897
0.025
0
120573.5508
0.025
3014.338771
0.025
0
123709.4381
127729.5876
0.025
0.025
3092.735954 0
0.025
3193.23969
131749.7371
0.025
0
0.025
3293.743427
*** Note that projected salaries are for both trunk and regional roads. The grand totals in Tables 4.5 and 4.6 do not therefore include salaries
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
37,451
158,689
30,172
1,147,088
57,354
45,884
22,942
11,471
1,147
2,868
5,475
152,397
88,092
TANROADS Salary Projections***
Total Cost (X
1000 USD)
45
Chart 4.1: Financial Trend (Interventions)
Financial Trend ('000 US $) Trunk Roads
350,000
300,000
'000 US $
250,000
Routine
200,000
Periodic
150,000
Bridges
Development
100,000
50,000
20
11
/1
2
20
12
/1
3
20
13
20
/1
14
4
/1
5
(M
D
G
)
20
05
/0
6
20
06
/0
7
20
07
/0
8
20
20
09
08
/1
/0
0
9
(M
K
U
K
U
TA
)
20
10
/1
1
0
Chart 4.2: Financial Trend (Cumulative)
Financial Trend Cumulative ('000 US $) Trunk Roads
4,500,000
G
)
(M
D
14
15
20
13
/
20
14
/
13
20
12
/
12
20
11
/
11
20
10
/
20
09
/
10
(M
K
20
05
/
06
0
U
TA
)
500,000
09
1,000,000
U
K
1,500,000
08
2,000,000
20
08
/
2,500,000
20
07
/
3,000,000
20
06
/
'000 US $
3,500,000
07
4,250,419
3,858,360
3,470,952
3,088,194
2,709,063
2,605,720 Development
2,394,471
2,335,605
Maintenance
2,183,222
1,971,973
1,846,486
Total Needs
1,760,724
1,549,476
1,364,539
1,232,179
1,147,088
887,487914,882
881,1221,012,045
754,320
597,585
512,171630,732
419,884
280,288185,668289,646397,731
90,294
4,000,000
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
46
Chart 4.3: Physical Trend
Physical Trend Trunk Roads
12,000.00
10,300.00
10,300.00
10,300.00
10,300.00
10,300.00
10,300.00
10,300.00
10,300.00
10,300.00
10,300.00
Length (km)
10,000.00
8,000.00
Maintainable
6,000.00
Poor condition
4,000.00
2,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
20
11
/1
2
20
12
/1
3
20
13
20
/1
14
4
/1
5
(M
D
G
)
20
05
/0
6
20
06
/0
7
20
07
/0
8
20
20
09
08
/1
/0
0
9
(M
K
U
K
U
TA
)
20
10
/1
1
0.00
Chart 4.4: Paved roads in maintainable condition
Paved roads (km ) in m aintainable condition
12,000
10,120
10,000
Length (km)
8,000
7,133
6,000
4,000
3,632
2,000
0
2005/06
2009/2010 (MKUKUTA)
2014/15 (MDG)
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
47
Table 4.6: Sequencing actual cost of interventions and scaling-up for 9 years period (2006 – 2015) for Regional Roads
INTERVENTION /PROJECT TYPE
2005/06
Total
Unit Cost
Length (km) (x1000 USD) Length (km) Cost
USD)
2006/07
(x1000
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
Cost (x1000
Cost (x1000
Cost (x1000
Cost (x1000
Cost (x1000
Cost (x1000
Cost
Length (km)
Length (km)
Length (km)
Length (km)
Length (km)
Length (km)
Length (km)
USD)
USD)
USD)
USD)
USD)
USD)
USD)
(x1000
2014/15
Cost
Length (km)
USD)
(x1000
Length (km)
Total
cost
Cost (x1000 (x1000USD)
USD)
1. DEVELOPMENT WORKS - Rehabilitation/Upgrading
(I) Gravel to Bitumen
720
300
0
(ii) Earth to Gravel
5,172
30
(iii) Rehabilitation - Paved
16
160
16
(IV) Bridge Construction
40
100
4
517
-
80
24,000
80
24,000
80
24,000
80
24,000
80
24,000
80
24,000
80
24,000
80
24,000
80
24,000
216,000
15,515
517
15,515
517
15,515
517
15,515
517
15,515
517
15,515
517
15,515
517
15,515
517
5,515
517
15,515
155,147
2,560
0
-
-
0
-
0
-
0
-
0
-
0
-
0
0
2,560
400
4
400
400
4
400
4
400
4
400
4
400
4
400
4
400
4,000
4
400
4
Sub Total 1
18,075
39,515
39,515
39,515
39,515
39,515
39,515
39,515
39,515
39,515
373,707
Supervision 4%
722.99
1,580.59
1,580.59
1,581
1,581
1,581
1,581
1,581
1,581
1,581
14,948
Admnistration 1%
180.75
395.15
395.15
395.15
395
395
395
395
395
395
3,737
Monitoring 0.1%
18.07
39.51
39.51
39.51
40
40
40
40
40
40
374
Capacity Building 2%
361.49
790.29
790.29
790.29
790
790
790
790
790
790
7,474
Cross - Cutting Issues 0.25%
4,518.66
9,878.66
9,878.66
9,879
9,879
9,879
9,879
9,879
9,879
9,879
93,427
493,666
Total Budget ( Dev. Regional roads)
-
23,877
-
52,199
-
52,199
- 52,199
-
52,199
-
52,199
-
52,199
-
52,199
-
52,199
-
52,199
2. MAINTENANCE WORKS
(a) Paved roads
-
(I) Routine
3,368
0.94
308
289.52
340.00
320
340.00
320
340.00
320
340.00
320
340.00
320
340.00
320
340.00
320
340.00
320
340
320
3,166
(ii) Periodic
481
60.00
44
2640
49
2914
49
2914
49
2914
49
2914
49
2914
49
2914
49
2914
49
2914
49
2914
28,869
(I) Routine
212,387
0.78
19,504
15213.12
19,889
15514
20,275
15814
20,660
16115
21,046
16416
21,431
16717
21,817
17017
22,202
17318
22,588
17619
22,973
17919
165,662
(ii) Periodic
42,477
20.00
3,901
78016
3,978
79558
4,055
81100
4,132
82642
4,209
84184
4,286
85726
4,363
87268
4,440
88810
4,518
90352
4,595
91893
849,547
(iii) Back log Maintenance
4,655
30.00
465
13964.535
465
13965
465
13965
465
13965
465
13965
465
13965
465
13965
465
13965
465
13965
465
13965
139,645
(iv) Spot Improvement
20,947
0.50
4,189
2094.68025
3,724
1862
3,258
1629
2,793
1396
2,327
1164
1,862
931
1,396
698
931
465
465
233
0
0
10,473
Sub Total 2
284,315
1,197,362
(b) Unpaved roads
-
112,218
114,132
115,742
117,352
118,962
120,572
122,181
123,791
125,401
127,011
Bridge Maintenance3%
3,367
3,424
3,472
3,521
3,569
3,617
3,665
3,714
3,762
3,810
35,921
Supervision 4%
4,489
4,565
4,630
4,694
4,758
4,823
4,887
4,952
5,016
5,080
47,894
Admnistration 1%
1,122
1,141
1,157
1,174
1,190
1,206
1,222
1,238
1,254
1,270
11,974
Monitoring 0.1%
112
114
116
117
119
121
122
124
125
127
1,197
Capacity Building 2%
2,244
2,283
2,315
2,347
2,379
2,411
2,444
2,476
2,508
2,540
23,947
Cross - Cutting Issues 0.25%
281
285
289
293
297
301
305
309
314
318
2,993
Total Budget (Maintenance)
-
123,832
-
125,945
-
127,721
- 129,498
-
131,274
-
133,051
-
134,827
-
136,604
-
138,380
-
140,157
1,321,289
TOTAL BUDGET (Dev. + Mtce -Regional
Roads)
-
147,709
-
178,144
-
179,920
- 181,697
-
183,473
-
185,250
-
187,026
-
188,803
-
190,579
-
192,356
1,814,955
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
48
Chart 4.5: Financial Trend (Interventions)
Chart 4.6: Financial Trend (Cumulative)
Chart 4.7: Physical Trend
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
49
Chart 4.8: Paved roads in maintainable condition
Paved roads (km) in maintainable condition Regional Roads
1,200
967
1,000
Length (km)
800
567
600
400
311
200
0
2005/06
4.7
2009/2010 (MKUKUTA)
2014/15 (MDG)
District and Urban Roads: Needs Assessment and Interventions, Unit
Costs and Estimates of Required Units
Like in the case of trunk and regional roads, in costing the interventions for the district and urban roads,
the methodology involves a number of steps as well as the underlying assumptions as presented in the
subsequent sections. Note that, with exception of a few cases these major steps and technical
assumptios apply to both the two categories namely, District and Urban Roads as well as Feeder and
Community Roads Networks.
4.7.1
Important Steps
In estimating the cost of interventions for the road networks under PMO-RALG i.e. district and rural
roads the following steps have been followed.
(a)
A package of activities and therefore the respective cost items were identified for each
specific area of intervention. Then each package was disaggregated into activities, with
each activity falling under a specific category (e.g. technical equipment and tools, labour,
staff recruitment and retention, and infrastructure construction, rehabilitation and
maintenance);
(b)
For each intervention the measurement unit and the unit cost were established;
(c)
For each intervention, the number of units required was estimated;
(d)
The cost of one intervention was derived by multiplying the required units with the unit cost;
(e)
Total cost was computed by summing up the costs of all corresponding interventions;
______________________________________________________________________
Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
50
4.7.2
(f)
Double costing was avoided to the extent possible. Some interventions were omitted
because they do not add additional costs. Costs for support departments and cross-cutting
departments within the Road Sector have only been partially included to circumvent an
overlap with capacity building interventions; and
(g)
In areas where data was not available estimations were made through discussions within
the drafting team. Other estimates were derived from consultations and interviewing road
sector experts.
Sequenced Actual Costs of Interventions and Scaling up for 9 Years Period
(2006-15)
After establishing the overall costs, the annual costs for the period between 2006 and 2015 as well as
the sequencing of the scaling-up of interventions were determined. The scaling-up of the interventions
was agreed to be gradual and simultaneous so that all constraints are removed and therefore they do
not prevent the attainment of the targets.
Most interventions were carried out recurrently (i.e. monthly, yearly or every four to five years) so that
frequently, the costs per year were predetermined. Generally, all other interventions followed a linear
scaling-up path (e.g. the incremental number of new structures built per year remains constant). To the
extent possible, the cost of quick win interventions were considered in the first two years.
Tables 4.9 provide a summary of the sequenced costs for all the interventions related to District, Feeder
and Urban Roads. Since in the fiscal year 2014/2015 most costs will be recurrent, the projections for the
years after 2015 coincide with the last year of the costing so as to maintain the MDG achievement.
The five groups of interventions including district and urban roads infrastructure, capacity building,
awareness creation and cross-cutting issues that were identified in trunk and regional roads were
costed separately. This is because the cost variables between the trunk and regional roads on one hand
and that of the districts and community roads are mostly different in their nature and prices.
4.8
Feeder and Community Roads: Needs Assessment and Interventions, Unit
costs and Estimates of Required Units8
As noted earlier, in costing the interventions for the feeder and community roads methodology also
involved the major steps as presented in sections 4.7.1 and 4.7.2.
Table 4.9 provides a summary of the sequenced costs for district and feeder roads related interventions.
The five groups of interventions including feeder and community roads infrastructure, capacity building,
awareness creation and cross-cutting issues that were identified in trunk and regional roads were
8
Also includes inter sectoral and cross cutting issues
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
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costed separately. This is because the cost variables between the trunk and regional roads on one
hand and that of the feeder and community roads are mostly different in their nature and prices.
4.8.1












Assumptions Made for District, Urban and Feeder Roads Cost Projections
All roads in good condition get full routine maintenance.
Community roads are assumed to be within the Feeder roads.
Paved roads in good and fair condition get periodic maintenance every 7 years.
Unpaved roads in good and fair condition get periodic maintenance every 5 years.
About 20% of paved roads in poor condition get spot improvement.
About 10% of unpaved roads in poor condition get spot improvement.
Development of paved roads: 121 Councils each get 4 km paved roads each year. Actual
lengths for different Councils to vary.
Development of unpaved roads: 121 Councils each get 20 km gravel roads each year. Actual
lengths for different Councils to vary.
Development works carried out to roads in poor condition.
Maintenance to bridges is 10% of total maintenance costs.
Emergency is 5% of total maintenance costs.
Adopted unit rates established by TANROADS for regional roads.
Table 4.7: Unit Rates for Regional Roads
Unit Rate (US $/km)
Paved
Unpaved
Routine
940
Periodic
60,000
Spot
1,200
Development
Upgrading
300,000
Maintenance
Routine
780
Periodic
20,000
Spot
1,000
Upgrading
30,000
Maintenance
Development





Unit rate for development works includes costs for design.
Exchange rate used is Tshs. 1,000 is equal to 1 US $.
Provision made for supervision by councils & consultants (4%), monitoring & administration by
Headquarter and the Regional Administrative Secretary (0.5%), Capacity building (2%) and
Cross cutting issues (0.25%) all totalling 6.75% of total development and maintenance costs
Cross cutting issues caters for HIV awareness, Environmental issues, Gender, Road Safety and
Advocacy.
Capacity building is for staff and facilities of PMO-RALG and Councils; Contractors and
Consultants.
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



In FY 2011/12 those roads upgraded to gravel standard in FY 2005/06 get Periodic
Maintenance. Same for those upgraded in FY 2006/07 etc. in consequent years.
In FY 2013/14 those roads upgraded to paved standard in FY 2005/06 get Periodic
Maintenance. Same for those upgraded in FY 2006/07 etc. in consequent years.
Road network condition from PMO-RALG for the 50,000 km is as shown in table below.
Road condition (km):
Table 4.8: Road Condition for District, Feeder and Urban Roads
Good
Fair
Poor
Total
Paved
485
-
15
500
Unpaved
8,015
-
41,485
49,500
Total
8,500
-
41,500
50,000


The road network will have a growth of 5% over the ten year period. This implies 5% of 50,000
km = 2500 km will be built over the 10 year period
Cost will be 2,500 km x Tshs. 30 million = Tshs. 75 billion.
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Table 4.9: Sequencing actual cost of interventions and scaling-up for 9 years period (2006 – 2015) for District, Feeder and Urban Roads
Road Type
Intervention
Unit
Rate
(US
$)/km
2005/06
2006/07
Length (km)
Cost
('000 US
$)
2007/08
Length
(km)
Cost
('000 US
$)
2008/09
Length
(km)
Cost
('000 US
$)
2009/10
Length
(km)
Cost
('000 US
$)
2010/11
Length
(km)
Cost
('000 US
$)
2011/12
Length
(km)
Cost
('000 US
$)
2012/13
Length
(km)
Cost
('000 US
$)
2013/14
2014/15
Length
(km)
Cost
('000 US
$)
Length
(km)
Cost ('000
US $)
TOTAL FOR MDG
Length
(km)
Cost
('000 US
$)
Length
(km)
Cost
('000 US
$)
TOTAL FOR
MKUKUTA
Length (km)
MAINTENANCE:
Paved
Routine
0.94
485
456
969
911
1,453
1,366
1,937
1,821
2,421
2,276
2,905
2,731
3,389
3,186
3,873
3,641
4,357
4,096
4,841
4,551
26,630
25,032
7,265
Unpaved
Routine
0.78
8,015
6,252
10,435
8,139
12,855
10,027
15,275
11,915
17,695
13,802
20,115
15,690
22,535
17,577
24,955
19,465
27,375
21,353
29,795
23,240
189,050
147,459
64,275
8,500
6,708
11,404
9,050
14,308
11,393
17,212
13,735
20,116
16,078
23,020
18,420
25,924
20,763
28,828
23,106
31,732
25,448
34,636
27,791
215,680
172,491
71,540
Sub-total for Routine
Maintenance
Paved
Periodic
60
69
4,157
69
4,157
69
4,157
69
4,157
69
4,157
69
4,157
69
4,157
69
4,157
553
33,197
553
33,197
1,661
99,651
346
Unpaved
Periodic
20
1,603
32,060
1,603
32,060
1,603
32,060
1,603
32,060
1,603
32,060
1,603
32,060
4,023
80,460
4,023
80,460
4,023
80,460
4,023
80,460
25,710
514,200
8,015
1,672
36,217
1,672
36,217
1,672
36,217
1,672
36,217
1,672
36,217
1,672
36,217
4,092
84,617
4,092
84,617
4,576
113,657
4,576
113,657
27,371
613,851
8,361
Sub-total for Periodic
Maintenance
Paved
Spot
Improvement
1.2
3
3.6
3
3.6
3
3.6
3
3.6
3
3.6
0
0
0
0
0
0
0
0
0
0
15
18
0
Unpaved
Spot
Improvement
1.0
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
41,485
41,485
15
4,152
4,152
4,152
4,152
4,152
4,152
4,152
4,152
4,152
4,152
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
4,149
41,500
41,503
20,743
Sub-total for Spot
Improvement
Bridges
Repairs
Emergency
10.0%
5,538
5,814
6,090
6,365
6,641
6,916
12,886
13,161
16,853
17,129
97,394
5.0%
2,769
2,907
3,045
3,183
3,320
3,458
6,443
6,581
8,427
8,564
48,697
SUB-TOTAL FOR
MAINTENANCE
14,324
55,385
17,228
58,140
20,132
60,896
23,036
63,652
25,940
66,408
28,841
69,160
34,165
128,857
37,069
131,613
40,457
168,534
43,361
171,290
284,551
973,936
100,659
DEVELOPMENT:
Paved
Upgrading
300
484
145,200
484
145,200
484
145,200
484
145,200
484
145,200
484
145,200
484
145,200
484
145,200
484
145,200
484
145,200
4,840
1,452,000
2,420
Unpaved
Upgrading
30
2,420
72,600
2,420
72,600
2,420
72,600
2,420
72,600
2,420
72,600
2,420
72,600
2,420
72,600
2,420
72,600
2,420
72,600
2,420
72,600
24,200
726,000
12,100
2,904
217,800
2,904
217,800
2,904
217,800
2,904
217,800
2,904
217,800
2,904
217,800
2,904
217,800
2,904
217,800
2,904
217,800
2,904
217,800
29,040
2,178,000
14,520
SUB-TOTAL FOR
DEVELOPMENT
Supervision by Councils &
Consultants
4.0%
11,718
11,837
11,955
12,073
12,191
12,309
14,870
14,988
16,572
16,690
135,204
Monitoring & Administration
Headquarters
0.5%
1,465
1,480
1,494
1,509
1,524
1,539
1,859
1,874
2,071
2,086
16,900
Capacity Building
2.0%
5,859
5,918
5,977
6,037
6,096
6,155
7,435
7,494
8,286
8,345
67,602
Cross cutting issues
0.25%
732
740
747
755
762
769
929
937
1,036
1,043
8,450
292,959
295,915
298,870
301,826
304,781
307,732
371,750
374,706
414,299
417,254
3,380,092
TOTAL
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
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115,179
Chart 4.9: Financial trend for district, urban and feeder roads
Financial Trend ('000 US $) District, Urban & Feeder roads
250,000
Routine
'000 USD
200,000
Periodic
150,000
Spot
Bridges
100,000
Emergency
50,000
Development
20
05
/0
6
20
06
/0
7
20
07
/0
20
8
09
2
00
/1
0
8/
(M
09
KU
KU
TA
)
20
10
/1
1
20
11
/1
2
20
12
/1
3
20
20
13
14
/1
4
/1
5
(M
DG
)
0
Chart 4.10: Financial trends cumulative
Financial Trend Cumulative ('000 US $)
3,500,000
3,017,418
2,500,000
2,000,000
1,462,589
1,500,000
1,029,330
1,000,000
1,755,330
1,058,412
292,959
500,000
334,534
08
20
08
(M
/0
K
9
U
K
U
TA
)
20
10
/1
1
20
11
/1
2
20
12
/1
3
2
01
20
3
14
/1
/1
4
5
(M
D
G
)
06
Development
Maintenance
Total Needs
20
09
/
10
20
06
/
20
05
/
07
217,800
55,385
0
20
07
/
'000 US $
3,000,000
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
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Chart 4.11: Physical trend for district, urban and feeder roads
Physical Trend
60,000
Length (km)
50,000
48,393
41,500
40,000
34,392
Maintainable
30,000
Poor condition
15,608
20,000
10,000
8,500
1,607
20
05
/0
6
20
06
/0
7
20
07
/0
8
20
20
09
08
/1
0
/0
(M
9
K
U
K
UT
A)
20
10
/1
1
20
11
/1
2
20
12
/1
3
20
13
20
/1
14
4
/1
5
(M
D
G
)
0
Chart 4.12: Length of Paved roads in maintainable condition
Paved roads (km) in maintainable condition
6,000
4,854
Length (km)
5,000
4,000
3,000
2,430
2,000
1,000
485
0
2005/06
4.9
2009/10 (MKUKUTA)
2014/15 (MDG)
Summary of the Findings
The manual projections of the costs of interventions for the roads sector have been carried out in three
different categories namely, Trunk Roads (Table 4.5); Regional Roads (Table 4.6); and District, Urban
and Feeder Roads (Table 4.9). The findings from the three categories are summarized in Table 4.10).
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Table 4.10: Summary of the Costing Estimates: Cumulative Financial Trend (in 000 US $)
2009/10
2014/15
Sn
Costing Category
2005/06
(MKUKUTA)
(MDG)
1
Trunk Roads
419,884
2,335,605
4,250,419
2
Regional Roads
147,709
814,264
1,814,955
3
District, Urban and Feeder Roads
292,959
1,462,589
3,017,418
4
Grand Total
860,550
4,612,458
9,082,792
5
TANROAD Salary Projections
6,371 (for 2006/07)
31,213
98,147
The findings indicate that the total resource requirement for the roads sector development and
maintenance for the period of 5 years from 2005/06 to 2009/10 (MKUKUTA targets) is US $ 4,612,458
thousand, while for 10 years i.e. from 2005/06 to 2014/15 (MDG targets) amounts to US $ 9,082,792
thousand. The roads network under the Ministry of Infrastructure Development (TANROADS) requires a
total of US $ 2,335,605 thousands by 2009/10 and US $ 4,250,419 thousands by 2014/15 for
development and maintenance of the trunk road network. The corresponding resource requirement for
the regional road network is US $ 814,264 thousands and US $ 1,814,955 thousands respectively.
Likewise, the Prime Ministers Office, Regional Administration and Local Government (PMO-RALG)
requires a total of US $ 1,462,589 thousand by 2009/10 and US $ 3,017,418 thousands by 2014/15 for
development and maintenance of the district, urban and feeder roads in Tanzania.
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
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CHAPTER FIVE
5.0
FINANCING STRATEGY
5.1
Overview
MKUKUTA costing is based on the assumption of unconstrained financial resources. Three major
sources of resources exist for the road sector. These are domestic government financing through
existing internal sources, external financing through Donor financing and resource mobilization through
East African Community (EAC) initiatives. Not that in EAC road Master Plan individual governments is
expected to mobilize and finance road projects implemented within their respective countries. However,
there are also efforts to mobilize resources at regional level with the aim to benefit the regional road
network. Because the resources available locally are not sufficient to finance all the expenditures, then
external finances are required to complement the emerging gap. So in developing the financial strategy
for MKUKUTA and MDG costing for the road sector the initial step is to identify these sources of
financing i.e. (Government financing vs. external financing). The other important step is to determine the
amount of resources available currently and also to make projections for the future, for the five years of
MKUKUTA implementation (2010) and nine years for meeting the MDG goals and targets (2015). The
third step involve establishing the resources requirements for each financing source based on the costs,
and from there determining the financial gap basing on the two sources above. The final stage will
involve the strategies to cover the financial gap as well as implications for future budget guidelines.
5.2
Analysis of the Current Financing
The financing of Road Sector activities is basing mainly on the government source through development
budget, Road Fund and from external sources. Therefore, government allocation to road sector includes
development and the recurrent budget. The Local component of this government financing is used to
finance development projects i.e. new construction, upgrading and rehabilitating activities and recurrent
expenditures (maintenance) of trunk, regional and rural roads while the external component also
finances the development activities.
Development budget allocations form the largest share of both domestic and external sources. These
allocations have been growing every year. It is expected that over the five years of MKUKUTA
implementation and MDG these resources need to grow even more than the current proportional rate to
accommodate the gap which will emerge from MKUKUTA and MDG financing.
The table below summaries the Road Fund allocation to the road sector implementing Ministries –
Ministry of Infrastructure Development through its implementing agency- TANROADS and PMORALG
through LGAs for the past years. The allocations are made by Road Fund Board which was established
by Road Tolls (Amendment) Act No 2 of 1998 to manage the Road Fund Monies. The Board was
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
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formed to advise the government on the sources of funding for road maintenance and to manage the
Fund and its disbursement to the various road agencies.
Table 5.1:Road Fund Collections and Disbursement for the last twelve years
Year
Collections
Tshs. mill
Collections
In USD thousands
Exchange rate
for USD
MoID Tshs.
mill
PMORALG
Tshs. mill
1991/1992
3,742
10,846
345
2,464
616
1992/1993
6,841
15,035
455
5,337
1,334
1993/1994
14,272
27,393
521
8,515
2,317
1994/1995
21,199
38,404
552
16,266
3,797
1995/1996
28,308
48,723
581
16,000
4,000
1996/1997
25,399
41,638
610
15,998
3,450
1997/1998
33,745
51,129
660
15,000
2,600
1998/1999
38,365
53,582
716
29,819
12,779
1999/2000
39,392
48,752
808
25,639
10,468
2000/2001
47,252
52,678
897
29,184
10,847
2001/2002
52,881
55,315
956
35,498
15,240
2002/2003
59,390
56,187
1,057
46,772
19,302
2003/2004
67,342
60,234
1,118
45,364
19,146
2004/2005
73,414
64,682
1,135
51,610
21,808
Chart 5.1: Summary of Road Fund collections for the past 12 years
80,000
60,000
40,000
20,000
0
Collections
19
91
/
19 199
94 2
/
19 199
97 5
/
20 199
00 8
/
20 200
03 1
/2
00
4
Amount collected
Road Fund Collections
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Government allocation to roads sector for 2005/2006 is summarized in the table below.
Table 5.2:Government Allocations to the Road Sector (In TZS)
Recurrent
Allocation
Personal
emolument
Other charges
Development
Total
Ministry of ID (Local)
2,338,250,600
10,895,166,400
141,538,834,000
154,772,251,000
Ministry of ID
(Foreign)
0
0
129,528,500,000
129,528,500,000
Sub Total
2,338,250,600
10,895,166,400
271,067,334,000
284,300,751,000
PMORALG (Local)
12,700,937,500
16,782,484,100
3,300,000,000
32,783,421,600
PMORALG (Foreign)
0
0
149,964,484,400
149,964,484,400
Sub Total
12,700,937,500
16,782,484,100
153,264,484,400
182,747,906,000
Road Fund
0
80,413,000,000
0
80,413,000,000
Grand Total
15,039,188,100
108,090,650,500
424,331,818,400
547,461,657,000
5.3
Financing Mechanism
In developing a realistic and viable financial strategy in the road sector the following issues were
established /considered.

Projections for the coming five year MKUKUTA period and nine year MDG targets. In coming
up with these projections several assumptions were considered; i.e. projections were made in
the current USD and exclude increases due to inflation.

The amount of financial resources required to implement MKUKUTA for five years was
established.
By comparing the current financing in the road sector with the MKUKUTA and MDG financing
mechanism it has been possible to predict the amount of domestic resources which will be required and
the future trend of loans and grants.
Table 5.3: Summary of MKUKUTA and MDG Financial Projections (Co
Year
Projections for
MKUKUTA/MDG (Mio USD)
Road Sector projected
Allocation (Mio USD)
Financing Gap
(Mio USD)
2005/2006
845,582
5,474
840,108
2006/2007
932,494
6,352
926,142
2007/2008
951,416
6,987
944,429
2008/2009
965,461
7,686
957,775
2009/2010
801,844
8,455
793,389
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
60
Year
Projections for
MKUKUTA/MDG (Mio USD)
Road Sector projected
Allocation (Mio USD)
Financing Gap
(Mio USD)
2010/2011
794,623
9,300
785,323
2011/2012
867,347
10,230
857,117
2012/2013
876,750
11,253
865,497
2013/2014
923,626
12,378
911,248
2014/2015
933,693
13,616
920,077
Road Sector allocation of resources for 2006/07- 2009/10 and beyond is based on MTEF projections of
10% increase per annum. The above listed summary clearly indicates a situation where the
MKUKUTA/MDGs requirements are not matched by the projected allocation to the road sector over this
period. Therefore, in order to implement MKUKUTA and MDGs additional resources for Road Sector
have to be sought to bridge the emerging financing gaps. Relationship between MKUKUTA/MDGs and
projected allocation to road sector is presented in the chart below:
Chart 5.2: MKUKUTA/MDGs and Road Sector Projections
1,200,000
1,000,000
800,000
600,000
Series1
Series2
400,000
200,000
20
05
/2
00
6
20
07
/2
00
8
20
09
/2
01
0
20
11
/2
01
2
20
13
/2
01
4
0
5.4
Options for Additional Resources Mobilization for MKUKUTA and MDG
Implementation in the Road Sector
The public financing gap can be filled by both additional external resources and additional domestic
revenue. Road Fund has so far been the major source of revenue for road maintenance activities.
Tanzania macro economic performance has led the country to be identified in the HIPC initiatives which
lead to the first PRS. This second PRS (NSGRP) put the country to access further additional resources
as it complements to the first strategies. The country and other development donors have commitments
in ensuring that MDG and MKUKUTA targets are reached. This also stands to be the advantage for
additional resources first within the country and then outside for these external resources. Tanzania has
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
61
also stronger and impressive governance performance than other countries in sub – Saharan Africa
which signifies that the additional resource mobilised will be efficiently used.
The public financing gap can be closed by the following measures:

Increase the domestic revenues parallel to the increase in financial requirements resulting from
MKUKUTA and MDG.

Involving the private sector through Public-private partnership. BOOT approach can be the best
option to minimize and close the financial gap. This will also help to address the capacity
constraints.

Widen Road Fund Revenue sources

More additional funds can be met by curbing tax evasions, efficient collection of fuel levy and
proper management of the utilization of funds.
5.5
Assumptions taken into Consideration while Preparing the Financing
Strategy

Government commitment for additional financial resources to meet MKUKUTA requirements.

The ‘gap’ estimates the amount of external resources which will be required to meet both
MKUKUTA and MDGs

There will be an increase in absorption capacity

Global commitment on Overseas Development Assistance
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Mkukuta Based MDGs Costing for the Road Sector: Draft Final Report
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CHAPTER SIX
6.0
CONCLUSION AND RECOMMENDATIONS
The costing exercise undertaken by road sector will stand as a model in the preparation of other sector
budgets. The results of the costing will be used as a basis for planning and budgeting in the roads
sector so that optimal outcomes can be reached under financial constraints. While preparing future
plans and budget for the road sector especially the plans, which will fall within MKUKUTA (2006- 2010)
and MDGs (2006- 2015), the costing and financial requirements will need to be taken on board.
What is actually required is for the sector to expand and find new sources to finance the established
gap. This will only be possible if reference will be made to interventions and needs assessment
established for this sector. As of now the Road sector budget guidelines, SBAS and MTEFs will be
pegged to the MKUKUTA and MDG costing. MKUKUTA costing for road sector will serve as a good
reference during preparation of both the inputs of the sector to the budget guidelines and for the budget
ceilings for road sector. Therefore, the ceiling for the sector budget preparations need to put strong
consideration of the costing made in this document.
In order to build up capacity it is strongly recommended that intensive training on HDM-4 Model, RED
Model and other roads development models be provided to Engineers and other technical staff in the
road sector.
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APPENDICES
APPENDIX 1: THE QUICK WINS FOR THE ROAD SECTOR
Sn
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Project Name
Tunduma – Laela - Sumbawanga
Tanga - Holoholo
Nzega - Tabora
Masasi - Tunduru
Dodoma - Babati
Geita - Usagara
Dodoma - Iringa
Korogwe – Mkumbara - Same
New Bagamoyo Road (Kawawa/Ali Hassani Jctn – Wazo Hill)
Singida – Babati - Minjingu
Kigoma - Nyakanazi
Songea - Matemanga
Bagamoyo – Saadani - Msata
Sumbawanga - Mpanda
Tabora - Ipole
Tabora – Malangalasi - Kigoma
Tunduru - Matemanga
Songea - Peramiho
Peramiho – Mbinga – Mbamba bay
Mikumi – Msimba
Mafinga - Nyololo
Mgololo – Makambako - Igawa
Kidatu – Ifakara - Mahenge
Kigamboni Bridge
Kilombero Bridge (Morogoro)
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