Highway financing has become a major concern in most countries. Highway construction and maintenance is an expensive undertaking and yet governments all over the world are faced with budgetary constraints, characterized by huge deficits. As a result, road pricing has become a common practice, not only as a means of recovering road costs, but also as a method of rationalizing the use of highway facilities.; Road pricing presents even greater difficulties to the developing countries, due to a number of factors. Firstly, because of capital shortage, developing countries rely very heavily on external borrowing to raise highway finance. In most cases the leading financial institution is the World Bank, which now requires its borrowers to address the issue of road pricing. Secondly, road user charges, such as import duty and sales tax on transport inputs (petroleum, vehicles, tyres and spare parts) contribute substantially to government revenue, in developing, countries. Thirdly, in most developing countries, no suitable framework has been developed for estimation and allocation of road costs to different vehicle classes.; In this study a framework has been developed for estimating and allocating Uganda's road costs. The extent to which the current level of road user charges recover road costs was estimated. In addition, the possible impact of marginal cost pricing on cost recovery and government revenue in Uganda has been evaluated.; The findings of the study indicate that the current user charges recover estimated road costs by a factor of 1.07. The present user charges are biased in favour of heavier vehicles, and yet these vehicles do more damage to the pavement. If adopted, marginal cost pricing would recover only 43% of the estimated road costs, would reduce road user revenues by 60% and result in a loss in total government revenue of about 27%. (Abstract shortened by UMI.)
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