I just had to borrow the
title of Ernst Hemingway’ book For Whom the Bell Tolls for this article,
especially knowing that the main character in the novel (set during the Spanish
Civil War) is named Robert Jordan and that the debate in Jordan is about tolls
and roads. All similarities stop here, of course.
اضافة اعلان
Jordan launched the Economic Modernization Vision on
June 6, 2022, a blueprint for economic accomplishments (366 initiatives
presented within the vision, covering 35 key sectors and subsectors) over the
next 10 years. One initiative, related to infrastructure, states that the aim
is to improve the transport infrastructure and related services, develop a
strategic plan for public transport throughout Jordan, and raise the efficiency
of road management.
In response, the government announced last week that
it will begin examining the details of the priorities and initiatives of the
Economic Modernization Vision, on June 18, 2022. Meanwhile, the government was
also busy making announcements, alas, all negative in content, regarding
energy, food, and water, thus cloaking the outlook in a shroud of darkness and
misery.
A quick scan of the vision shows that it mentions
“traffic tolls” only once. However, the
media reported that the World Bank is studying the financial underpinnings of a
project to improve Jordan’s road and highway management. Simultaneously, talk
began of imposing tolls on roads and highways. The conversation, which is one
sided, of course (from the government to the public at large), already
specified the size of the tariffs for use on the toll roads (JD0.11 per kilometer
on small vehicles and JD0.22 per kilometer on trucks). This is highly unusual.
The whole discourse is odd, to say the least. What
about all the projects in the vision? Why pick the one that requires the
imposition of a fee, instead of the ones that provide enhancements and
opportunities for development?
A wise policymaker would seek the support of the populace first, which is best generated through the introduction of some quick benefits and gains (low-hanging fruits), not burdens and tolls, especially in a country where per capita income and wealth have been deteriorating over the past 12 years.
Tolls are usually used by countries to finance new
roads that save time and money for commuters, they are not levied for existing
roads. They are alternative, more efficient means, and their use is optional.
If these roads are built by investors in one form or another of a
public-private partnership (PPP) project, the government (central or local)
enters into negotiations with the investor to determine the tolls to compensate
the investor for the cost of building the road. The toll itself does not need
to persist after the investor is fully compensated (cost plus profit) because
it is a vehicle for facilitating investment and not a new source of revenue for
the government.
Moreover, a typical PPP project requires a minimum
of one year of preparations, negotiations, and tendering. It has to go through
government approvals relating to: selection as a PPP project; making a proper
feasibility study, with a somewhat detailed technical design; deciding the bidding
mode: bidder invitation documents, selection of bid winners, and final
approval(s).
Meanwhile, the Ministry of Finance has to commit to
allocate the necessary resources over several years. Transparent and multi-year
commitments and assurances to investors have to be provided by the government.
In other words, a PPP project entails many steps and involves many entities,
and one of its outcomes is the determination of a toll. As such, deciding the
toll before starting such and arduous and lengthy process is, to say the least,
unusual.
In addition, one wonders if the World Bank study
took into consideration the many nuances that relate to the transport sector in
Jordan. Jordan levies all types of taxes and fees on vehicles, which amount to
80–140 percent of the original value of the car. Furthermore, taxes on fuel are
levied purportedly for all types of purposes (environment, road maintenance,
for example). Since the Constitution does not allow the fees or taxes to go to
a specific purpose, even though they are charged for that purpose, the imposed
fees go into the Treasury to be spent on all avenues, including, possibly, the
maintenance of the road network.
Another observation begs to emerge. It is common
sense that no modernization plan that promises a better future should start
with a toll, fee, tax, price hike, or any additional burden upon the population
of a country. A wise policymaker would seek the support of the populace first,
which is best generated through the introduction of some quick benefits and
gains (low-hanging fruits), not burdens and tolls, especially in a country
where per capita income and wealth have been deteriorating over the past 12
years.
Let us hope we will not hear the road till toll.
The writer is CEO of the Envision Consulting Group and
former minister of state for economic affairs.
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