Could impede access to financing needed to pave roads to Zwedru, Toe Town
The Ministries of Finance & Development Planning and Public Works have written the Speaker and members of the House of Representatives to intervene in the unblocking of the National Road Fund and allowing the Inter-Ministerial Steering Committee (IMSC) to function, use and collect US$30 million from petroleum importers to support the 2017/2018 National Budget.
In order to contribute to the support of the budget, the IMSC set a US$0.25 (Twenty-five U.S. cents) road user charge on every gallon of petroleum product brought into the country – and the cumulative sum from these charges is projected to be US$30 million for 2017. Conventionally, the IMSC authorized the Liberia Revenue Authority (LRA) to collect the fees on behalf of the fund.
Unfortunately, in an attempt to collect the charges from petroleum importers, Srimex Oil & Gas sought a stay on the action from the Supreme Court, arguing that the IMSC is acting in contravention of the law.
In a letter to the chief clerk of the House, Mildred Sayon, requesting the assistance of the House of Representatives, Acting Finance Minister Alvin. E. Attah said: “The Justice in Chambers granted the petitioner’s request, staying the action and ordering all parties to return to the status quo…”
Minister Attah further said: “In view of this, the Road Fund is stalled. We run the possibility of a budget shortfall if this situation persists. It affects our ability to receive the matching fund from the MCC Compact, which would impede on the World Bank’s ability to work with the Liberian government to secure private financing to pave the 215km road from Ganta to Zwedru as well as the 10km road from Zwedru to Toe town.”
As a way forward, the Acting Finance Minister argued that the levels and sources of the road user charges are subject to legislative approval because the Legislature passed the law establishing the National Road Fund on December 12, 2016; and among other things, the law authorized the IMSC to raise money for the fund through road user charges.
“It was our assumption that the negotiations and hearings of the budget process between the Ministry of Finance and Development Planning and the Joint Finance, Ways, and Means Committee of the Legislature in determining US$30 million as contribution from the Road Fund to the National Budget satisfied the requirement of the law regarding approval from the Legislature,” Minister Attah wrote.
“In view of the above, I am writing to request communication to the following effect: that the leadership recognizes the Ministry of Finance as the IMSC member which shall consult with the leadership of the Legislature. That the budget negotiation process will satisfy the condition of consultation with and approval from the National Legislature and that the Joint Ways, Means, and Finance Committee in setting and agreeing on projections from the Road Fund to the National Budget would convey the Legislature’s approval. This action would allow us to remove the stay order and make the National Road Fund functional and viable.”
For his part, Public Works Minister Gyude Moore also wrote the House of Representatives, saying the IMSC has agreed that of the US$0.50 (Fifty U.S. cents) previously collected as storage fee by the Liberia Petroleum Refining Company (LPRC), US$0.25 was set aside as a “road user charge.”
Besides Srimex Oil & Gas, Aminata has also challenged the US$0.25 charge from every gallon to support the National Budget.
“I am therefore requesting a communication from you (Speaker J. Emmanuel Nuquay) acknowledging that there was a procedural lapse, that the IMSC should have formally sought approval for the US$0.25 levy and that nevertheless, this action was anticipated and accounted for in the budgeting process. Any future levy, increase or decrease in the existing levy will have to be formally approved before going into effect,” said Minister Moore.
“This would resolve the legal question around the fund and make it functional. It will also allow us to complete our negotiation with the World Bank for the private sector to invest up to US$200 million in our road sector and bring much-needed relief to our people. It will also allow the MCC to match our road fund up to US$15 million as part of the compact.”
On Tuesday, December 5, during the 72nd day sitting, the House’s Plenary mandated its leadership to receive the two communications from the Acting Minister of Finance and Development Planning and the Minister of Public Works, and act upon them appropriately and timely.