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Home / RFA justifies increase of road user charges
RFA justifies increase of road user charges
2018-05-16Staff Report 2 Jeremiah Ndjoze Windhoek – Treasury may have to step in if the Road Fund Administration (RFA) of Namibia is to stay true to its governing Act of realising and maintaining a ‘safe and efficient road sector’. This according to the recently unveiled five-year business plan of the RFA, which came into effect from April 2018 and to run up to March 2023. The document reveals that the amount of funding that can be collected through the road user charging system by the parastatal is substantially inadequate to achieve the object of the state-owned enterprise. “The achievement of this aim on a broader national funding level will therefore depend on the government assuming responsibility for funding the difference between the amount of funding as determined for achieving economic efficiency, and the amount that the road user charging system can contribute subject to the road user charges constraints imposed,” the business plan stipulates. New Era has learned that all road user charges, which comprise fuel levies on petrol and diesel, license fees, entry fees and cross-border charges, as well as mass distance charges, have been increased by 7% across the board. These increments were approved in June 2017. According to the RFA’s five-year business plan, the direct result of constraints on the increases of road user charges is that the Road Fund as from the financial year 2019 (ending in March 2019) will only be able to fund the following expenses linked to the national road network to the tune of N$1.193 billion, albeit only at a suboptimal level: a contribution to the maintenance of urban streets to the tune of N$118 million, likewise at a suboptimal level; a contribution towards the rehabilitation of TR1/3, between Keetmanshoop and Mariental – a 87.3km stretch between Tses and Gochas, to the amount of N$482 million which is to be realised from the KfW loan; the operation of the Namibian Traffic Information System (NaTIS) which requires N$38 million; as well as contributions to traffic law enforcement and to projects of the National Road Safety Council, which require N$35 million and N$2 million respectively as some of the RFA’s foreseen expenses. The parastatal is furthermore expected to finance the servicing, including capital redemption, of a KfW loan of N$447 million by the government to the Road Fund, and for the financial arrangements towards the KfW loan as signed in November 2015 as well as the servicing, including capital redemption, of an additional KfW loan of N$482 million by the government to the Road Fund, and for the financial arrangements towards the KfW loan as signed on December 13 2017. The administrative expenses of the Roads Authority (RA) amounts to N$423 million while the administrative expenses of the RFA total N$112 million. Also to be bankrolled by the RFA are the MDC Automation Project to the tune of N$65 million and the ICT Systems Development (ERP) which runs into N$16 million. The completion of the RA head office is expected to guzzle about N$20 million, while the acquisition of the land for and development and construction of a One Stop NaTIS centre in Windhoek is expected cost about N$22 million. BP Overview The RFA develops a five-year plan on an annual basis. Speaking to New Era on what was learned from drawing up the 2017 – 2022 business plan, the chief engineer and acting executive on the Project Management and Policy Advice Committee, Elton Gaoseb, maintained that the parastatal’s business plan (BP) has been prepared in accordance with the directives issued by the Ministry of Public Enterprises. As such the BP in essence presents the financial position of the RFA as well as the five-year projections of the budget comprising the revenues generated from road user charges and expenditure for projects and programmes towards road maintenance, road safety and traffic law enforcement. “Each BP is specific to the needs to be addressed and the lessons learned from the previous BP include the critical review of the projected revenues due to the economic downturn and the re-prioritisation of projects and programmes to meet the available funding levels,” Gaoseb said. Among the challenges that impacted the state entity negatively in terms of the implementation of the previous business plan, according to Gaoseb, are the direct impact of the economy on the projected revenue income of the parastatal and the slow implementation of projects and programmes by some of the recipient authorities. In order to minimise such challenges, in the implementation of the current BP, the RFA has resolved to improve its stakeholder consultations with the government and private sector in an effort to achieve the objectives set in the Harambee Prosperity Plan (HPP) and NDP5. Gaoseb further revealed that the company is in the process of looking into additional sources of revenue as well as the enhancement of its technical monitoring and evaluation programmes to ensure value for money, amongst others. “As a responsible corporate citizen, the RFA continues to engage its stakeholders and the general public at various platforms, so that the role of the organisation is understood and appreciated,” Gaoseb said. 2018-05-16Staff Report 2
