RFA revenue at risk due to increased fuel-efficient vehicles – Ipinge
WINDHOEK – The Road Fund Administration (RFA) says it is cognisant that the future will bring dramatic technological improvements to the transportation sector, requiring closer stakeholder engagement and policy innovation to create the legal framework for intelligent transport systems.
This is according to RFA CEO, Ali Ipinge, who said at the institution’s recent annual general meeting (AGM) that whatever the future of transportation holds, the RFA will continue to track developments to ensure that Namibia has a safe, reliable and more connected road network.
He added that with the advent of improved fuel-efficient vehicles as well as new electric vehicles, which brings joy and relief to the road users in terms of less or no fuel usage, the demands for roads and maintenance thereof however is increasing, placing the future revenue generation of the RFA at risk. Said Ipinge: “This in turn will affect the sustainability and upkeep of our road network. Thus, RFA has to seek equitable road user charging methodologies, and may consider in the near future looking into possibilities of methods such as distance-based road user charges, which means road users will have to pay for actual distance travelled on the roads. The RFA will consequently strive to find more creative funding mechanisms to sustainably increase road maintenance funding from the current N$2.6 billion annually to the optimal level of N$3.2 billion needed in order to maintain the quality of our N$101 billion valued road network.”
The RFA held its AGM with its shareholders on Tuesday, October 8, 2019 at the Ministry of Finance in Windhoek. It is mandatory for RFA to conduct an AGM with the shareholder and Tuesday’s meeting was attended by the Deputy Minister of Finance, Natangwe Ithete, as well as representatives from the Ministry of Public Enterprises, RFA Board of Directors and management.
At the meeting Ithete congratulated RFA for its continued achievements in ensuring sustained revenue collection for sustainable upkeep of the national roads and for presenting an Integrated Annual Report and Audited Financial Statements for the 2019 financial year. In noting that Namibia has amongst the best quality roads in Africa, and that RFA is at the helm of ensuring sustainable funding for the upkeep of safer roads, Ithete urged RFA to make improved contributions towards road safety education, as the country continues to lose productive lives due to road accidents. The deputy minister also highlighted that public enterprises were established to contribute to the country’s developmental agenda but to the contrary a number of public enterprises continue to rely on government for bailouts.
He duly commended the RFA for being amongst few public enterprises that generate sufficient revenue to meet its mandate and for further assisting government over the past two years to settle outstanding invoices for road capital projects. The RFA managed to raise N$500 million on behalf of government in the financial year under review for this purpose.
Ithete added that the positive results were achieved due to strong financial discipline, robust governance processes, application of technology, improvements in the organization’s processes and systems, and an empowered yet dedicated workforce.
In addition, Ipinge at the same occasion highlighted that the 2018/2019 financial year has been most gratifying in many respects, and the implemented strategic initiatives were achieved amidst challenging economic environment. He further pointed out that RFA has made considerable progress over the past five years, with substantial increase in revenue growth in excess of 60 percent and an improved balance sheet – with assets close to the N$1 billion mark. Moreover, the RFA was able to take up loan facilities in excess of N$950 million to fund the much-needed road rehabilitation program, which has inadvertently resulted in an increased fund liability position.
“The brief summary of achievements as narrated are made possible through the Road User Charges System (RUCS) under ‘user pay’ principle of the RUCS. RFA acknowledges that the Namibian RUCS Model in its current form is not sustainable in the long term, as the national road network has substantially increased over the past 10 years which requires additional resources to maintain it. This is coupled with reduced fuel demand and consumption (thereby dampening the fuel levy income of RFA) in the economy,” read Ipinge’s statement. Meanwhile, RFA Board Chairperson Penda Ithindi emphasised that the
2018/2019 financial year had been positive for the RFA, with encouraging results achieved across all strategic themes as per the RFA Strategic Plan. These themes include the optimisation of funding, stakeholder synergy; enhanced operational efficiency; and building a high-performance team culture.
2019-10-11 08:09:06 | 9 months ago