Road funds, financed from user charges, have been practiced in many countries in securing more reliable funding for roads. The idea of an off-budget source of funding is appealing. But they are most effective where they,form part of a broader strategy to manage roads in a more business-like way on a fee-for-service basis: the link between user charges tariffs fur road use - and road expenditures, reinforced by user participation in their oversight, creates a sense of ownership and puts pressure on road agencies for greater transparency, accountability, and efficiency. This is in tune with Indonesia's moves towards better governance and democratic accountability under decentralization. But success elsewhere is no guarantee to Indonesia's special conditions - notably the current decentralization process and embryonic arrangements for regional autonomy; the condition and division of responsibilities for the road network; the way road works are planned, financed and implemented; and the potential sources of revenue for a system of cos. recovery - that could complicate prospects for implementation. The paper summarizes the results of a study to investigate the appropriateness of establishing a road fund in Indonesia and introduced several options for possible implementation, although it was found that with decentralization in its early stages, the prospects for implementing road fund in Indonesia are not yet clear.
