The fight for control over nearly Sh100 billion shillings collected by the Kenya Roads Board (KRB) from the fuel levy annually has emerged as the new battle front between governors and the national government that has threatened to spill to the courts.
The dispute intensified nearly a fortnight ago when the National Assembly rejected proposals by KRB to cut funding for constituency roads from 22 per cent to 15 per cent and link roads from 10 per cent to 6.8 per cent.
KRB, which was established through the Kenya Roads Board Act of 1999, is the administrator of the Road Maintenance Levy Fund (RMLF) which is charged at Sh18 per litre on petrol and diesel and road tolls.
The law requires the agency to allocate at least 22 per cent of what it collects from RMLF and road tolls to all constituencies equally for development and maintenance of roads within constituencies.
It is also required to set aside at least 10 per cent of the collections for roads linking constituencies and administered by the Kenya Rural Roads Authority (KeRRA).
But MPs swiftly adopted a report tabled by Mr George Kariuki, who is the chairman of the National Assembly Committee on Transport and Infrastructure, which recommended the rejection of the proposed budget cuts.
In a heated session on September 28, 2023, the lawmakers instead called for the roads’ billions allocated to counties to be retained, even calling for the share allocation to KeRRA increased to as high as 50 per cent.
“We cannot sit back as MPs and let the same counties that have taken almost Sh400 billion to also take the RMLF. This committee must stand firm against such a move. Even the Kenya Roads Board Act was made in this House. We know and see the appetite governors have to dip their fingers in this Fund,” said Gilgil MP Martha Wangari.
This has earned lawmakers the ire of governors, who are demanding at least 20 per cent of what KRB collects from the fund, arguing that they are mandated by the Constitution to build and maintain county roads.
KRB’s collections from the fuel levy have been rising steadily in recent years driven by increased consumption of petroleum products.
The agency collected Sh63 billion from the fuel levy in FY2017/18 rising to Sh68.4 billion in FY2018/19. The Board received a fuel levy of Sh84.56 billion in FY2020/21, compared to collections of Sh73.81 billion for FY 2019/20, an increase of 15 per cent.
The MPs further accused Roads Cabinet Secretary Kipchumba Murkomen of pushing the Roads Board to amend the law through the back door by reducing KeRRA budgetary allocation ceilings.
“The only body that has the mandate to make, change or amend the Constitution, the law and statutes is this House. Therefore, any attempt by the Executive, especially the Cabinet Secretary through the Director-General of KRB, to even attempt to do a circular to the effect that they were setting ceilings as to how much should be spent on our roads is in itself ultra vires, they were acting beyond their powers and beyond what is stipulated in the Constitution,” said Kinangop MP Kwenya Thuku.
Ahead of the 21st ordinary Intergovernmental Budget and Economic Council (Ibec) meeting chaired by Deputy President Rigathi Gachagua on Friday, the Council of Governors (CoG) had issued a statement threatening to move to court to settle the matter.
Counties were allocated RMLF as a conditional grant starting from the financial year 15/16 to FY 20/21 at 15 per cent of the RMLF.
But during the 9th National and County Government Coordinating Summit held in February in Naivasha and chaired by President William Ruto, it was agreed that not only would counties resume being allocated the RMLF from FY2024/25 but that it would also be increased to 20 per cent from 15 per cent.
But after MPs excluded the RMLF allocation to counties for the FY2024/25 and FY2025/26, governors have threatened to move to court if the allocation is not included in the County Governments Additional Allocation Bill for FY 2024/25.
“I wish to note that the Council will seek legal redress in court if the above recommendations are not adopted immediately,” said CoG chairperson Anne Waiguru.
In a bid to reach an out-of-court settlement, DP Gachagua has convened a meeting next week bringing together the relevant stakeholders in the dispute to reach an amicable solution.
“The Council resolved to convene a consultative forum next week bringing together the Council of Governors, the Ministry of Roads, various roads agencies, CRA and relevant stakeholders,” DP Gachagua said on Friday.
“The forum aims to facilitate discussions on the equitable distribution of funds from the RMLF between the two levels of government with the intention of reaching an out-of-court settlement,” he said.
The allocation of RMLF to counties has been a thorny issue over the past 10 years. This is because while the Constitution gives counties authority over construction and maintenance of county roads, it does not specify what a national trunk road or county road is.
To solve this conundrum, the government in 2016 issued a legal notice that classified the country’s road network into national trunk roads (Class A, B and C) and county roads (Class D, E, F and G).
By 2018, some 121,819.15km of roads were classified as county roads while national trunk roads amounted about 40,002km. In the FY2020/21, KRB allocated Sh9.43 billion to counties from RMLF.
But even as the battle for the fuel levy billions rages, the government is staring in the face of lower RMLF collections due a significant drop in fuel consumption amid high prices.
