Road Fund Administration to raise N$1.8b from toll routes

May 5, 2015, 8:10am

Road Fund Administration to raise N$1.8b from toll routes

Namibian motorists may soon be charged for using national roads, with the introduction of toll routes, to help the Road Fund Administration (RFA) raise the N$1.8 billion required to maintain and develop local infrastructure each year.
According to Beaulah Garises of the RFA, after a period of three years, local and foreign vehicles using Namibian roads may have to pay for using the roads, through the introduction of toll routes, as the Administration looks to raise N$2.3 billion annually, to maintain the road infrastructure at a cost of N$1.8 billion, as well as to cover its administration costs.
“It [introduction of toll routes] is a consideration but not in the coming two to three years. However, we are surfacing feasibility studies in that regard. We have currently interventions in place to encourage the ‘pay as you use the road principle’ both for foreign and local registered vehicles,” Garises told The Villager this week.
“A total of N$1.8 billion is required annually to fund the management of the national road network. We target to collect Road User Charges of N$2.3 billion per year over the business plan period. This will help us move from a current collection trend of N$1.6 Billion per annum and hence reduce the funding gap. The surplus will also improve the Fund’s financial position and absorb the administration costs,” she added.
Despite a good ranking of the country’s road infrastructure compared to other countries in last year’s global competitiveness report, reports surfaced late last year in which the Road Fund Administration’s Chairperson, Penda Ithindi, bemoaned the lack of adequate financial assistance rendered, particularly for the development of new road infrastructure.
“We cannot, as well, sing praise as if challenges do not exist in regard to the adequacy of both funding for and the quality of roads development and maintenance of existing infrastructure outlay,” Ithindi was quoted as saying.
Meanwhile, the RFA further revealed that it is challenged with a backlog of road maintenance, which it has to deal with before it can prioritise the development of new road infrastructure.
“The funding model drives on the basis that what funding is collected from Road User Charges would be used to rehabilitate and maintain the existing road network. Hence the prioritization is catching up with maintenance backlog. However, the infrastructural development of roads would also be channeled through government specific interventions,” Garises added, explaining the prioritization of the Administration’s funding model.
Increase of vehicles on national roads
Meanwhile the RFA also revealed that despite the increase of vehicles on national roads, owing to the importation of second-hand vehicles that are sold at affordable prices to local consumers, the budget required to maintain the local road infrastructure is not expected to exceed N$1.8 billion per year.
“The business plans assumes that a normalized funding of N$1.8 billion is required on an annualized basis to fund the road network taking into account anticipated increase in Road Traffic and lifecycle stages of the various roads,” Garises explained.
 SME Contractors lacking skills
Meanwhile the Namibia Roads Authority (RA) said that Namibia has a market of unskilled contractors, which is why it trained 270 SME contractors to cater to the high demand of good quality roads.
Chief Executive Officer of the Roads Authority, Conrad Mutongo Lutombi, said that a total number of 1436 SMEs went through informal skills training across various areas under the Roads Technical Training Unit (RTTU). He said RA has made progress in the development of SMEs and Contractors in Namibia.
“Our labour-based projects require SME Contractors to tender jointly with established Civil Engineering Plant Contractors. Successful SME tenderers are then trained on the job and equipped with much needed skills from the Civil Engineering Plant Contractors,” says Lutombi.
He said the training of SMEs contractors is done without compromising the quality of construction work. Lutombi said it should also be noted that the RA is training SMEs in the industry to equip them with the necessary knowledge and to enable them to tender not only for RA projects but also for other tenders in the industry.
The CEO said they are in the process of aligning their Procurement Policy and Tender rules to the Government Procurement Bill. He said the policy will make provision for projects to be placed in categories thus ensuring that projects that are meant for Namibian Owned entities will be awarded as such. He said the policy will also ensure tenders are awarded to competent and capable contractors and consulting engineers.
“Technical and financial competencies will play a major role in determining the successful tenderer,” says Lutombi.
He stated that many construction companies are faced with a challenge of inadequate funding for their businesses. According to him, it is a major challenge because to be competitive, a construction business requires huge capital outlays.
Lutombi mentioned that from his experience, many contractors that have all the ingredients necessary for success fail because of lack of cash flow that would sustain them.
The Roads Authority CEO also mentioned that government invests heavily into road infrastructure development and it rightly demands high standards when it comes to road construction. Lutombi added that what has been happening on some of their projects lately, cannot continue, they will demand high quality work.
“Sub-standard work and delays in completion of our projects will no longer be tolerated. Contracts of Contactors and Consultants who fail to honor their contractual obligations will be terminated in line with the RA Procurement Policy and tender rules,” says Lutombi, further indicating that they will introduce Technical and Financial Audits to ensure value for money.
He said they have recently crafted a new 3-year Strategic Plan for the organization. The Strategic Plan will focus on ensuring that they make project management a priority by including procurement and supervision core, to deliver on their mandate. Lutombi said they are also working closely with other stakeholders to come up with ways of efficiently utilizing their resources in order to meet sustainable environmental requirements while extending the road network at minimal cost to the Government and road users.
Lutombi said it is very important to have contractors with adequate skills, expertise and resources to execute the work according to the set standards and within the contract value and prescribed time frame. “The construction industry is critical to the achievement of the objectives of our Government’s growth and development strategy,” he said. He said construction of infrastructure is at the centre of attracting investment to Namibia and that the Government’s capacity to meet its infrastructure delivery targets such as clinics, schools and houses depends almost entirely on the responsiveness and performance of this sector.
Furthermore, he stated that work is progressing on some of their capital projects such as phase 2 of the upgrading to bitumen standard of the Otjinene-Grootfontein Road in the Omaheke and Otjozondjupa Regions, the rehabilitation and upgrading to a dual carriageway of the Windhoek-Okahandja road in Khomas Region, the upgrading to bitumen standard of the Oshigambo-Eenhana road in Oshikoto and Ohangwena Region and the upgrading of the Omafo-Outapi Road.

by Penda Jonas Hashoongo: The Villager