RFA moots tolls to meet N$6.3bn funding gap
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09 August 2019
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The country’s road infrastructure funding gap could reach N$6.3 billion in the next five years from the current N$1.1 billion, the Road Fund Administration (RFA) has warned.
“We need N$3.7 billion to maintain our N$101 billion road network. Therefore, the funding gap is N$1.1 billion in the current financial year and N$6.3 billion over our five-year business plan cycle,” RFA Chief Executive Officer Ali Ipinge told the Windhoek Observer.
Ipinge said the existing funding model was currently not sufficient to meet the funding needs of the country’s 47,555 km road network.
“The current road user charges fee structure is not equitable. As vehicles become more fuel efficient, road users pay less per kilometre of road travelled, however lower income groups are still stuck with fuel inefficient cars resulting in them paying more per kilometre of road travelled. This disparity has simply become too large to ignore and sadly, the lower income road users end up subsidising road maintenance for the wealthier road users. Therefore, in the interest of equitable distribution of the road maintenance costs, the RFA is seeking a road user charging methodology that is fair and transparent to all road users and socially just to the less fortunate,” he said.
This comes as RFA is moving ahead with a feasibility study aimed at introducing tolling on the country’s road, with the Windhoek-Okahandja being identified as the starting point of the plan.
The fund notes the surge in the country’s vehicle population could now justify the move, which was previously canned after a 2008 study.
“The last feasibility study was conducted in 2008, and it revealed that it was not feasible to toll any road in Namibia, since we did not have the proportionate daily traffic volumes to justify tolling. Since then, the Namibian vehicle population has increased from 196,000 registered vehicles to 370,000 registered vehicles, and this might be sufficient to build a business case for tolling, but at this stage we do not know, and hence we are investigating the feasibility of tolls,” he said.
The RFA CEO said the planned feasibility study for which a tender is currently open for bids, would determine the viability of tolling on the country’s roads and justify its plans.
“We first need to find out if it is feasible to toll and if so then we need to determine which roads are feasible to toll. Roads with the highest daily traffic counts are likely candidates for tolling, with Windhoek-Okahandja topping the list with the highest daily traffic count in the country,” he said.
Quizzed on the projected additional revenue to be generated if tolls are approved from the N$2.6 billion realized in the current financial year, Ipinge again said the study will provide the much-needed information.
“We have no projections of the possible revenue.  Part of the exercise is to determine if additional revenue will be generated, mindful of the collection costs, which tend to be high for tolling. We do remain open to more efficient collection methods, all of which require further research and continue to receive attention,” he said.
“We are extremely mindful of the proliferation of new electric vehicles globally, regionally and nationally. Eventually, internal combustion engines will disappear from our roads and so too with the revenue generated from fuel levies. At this stage fuel levies constitute 60 percent of our revenue. To ensure future sustainability, it is imperative that the RFA investigates and implements energy independent revenue streams to fund future road maintenance.”
Asked if tolls were the only other alternative funding model that the RFA was pursuing, he said, “No we do not think tolls are the only answer. We are exploring other distance-based road user charges, starting with the automation of the Mass Distance Charges on vehicles exceeding 3,500 kg. This will replace the self-administered logbook system with an electronic system, thereby increasing efficiency, accuracy and compliance.  By moving towards pay-as-you-use road user charges, road users don’t pay for the maintenance on roads which they do not use. Pay-as-you-use approaches seems to be the more popular methods used across the world and tolling is but one such approach,” Ipinge explained.
 “The RFA aims to strike a balance between road user charges and vehicle running costs. As road user charges increase, road quality improves and vehicle maintenance costs fall, and at the intersection of road user charges and vehicle maintenance cost, overall transport costs are minimized for the road user. We do not believe that Namibia is at this sweet spot and therefore we are pursuing new and innovative ways to get there. Thereby ensuring value for money for the road users and creating a conducive environment for the advancement of the government’s logistics hub development agenda.”
 
 
 
 
 
 
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WINDHOEK OBSERVER

The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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