Drivers to pay 6.5% more for using local roads … as RFA limps with a N$600 million funding gap to fix roads

08 May 2018 15:10pm

Motorists criss-crossing Namibian roads are now required to pay 6.5% more as road-user charges to fix the many roads that have come under stress from a rising vehicle population and weather conditions, the Road Fund Administration has confirmed.

In simple terms, motorists for now will have to add 6.5% to their annual vehicle registration fees which goes straight in the pockets of RFA to fund the national road network.

Namibia has seen a consistent annual growth of between 4 to 6% in vehicle population as well as total annual distance travelled on the Namibian road network.  

“If you are paying N$1 000 to renew your vehicle, you are going to add N$65, on the fuel we are talking about the tariffs will be increased from N$1.22 to N$1.30 for both deiseal and petrol so that is 0.008cents. So that is the impact,” said RFA chief executive officer (CEO) Ali Ipinge. 

However, the hike in the charges are also meant to repay for two loan facilities taken by RFA from KFW amounting N$929 million.

The first loan facility to the amount of N$447 million was used to fully fund the first phase of the Windhoek-Okahandja dual carriageway road project while the capital repayment for it is expected to start as from financial year 2018/19, RFA chief executive officer (CEO) Ali Ipinge has revealed.

The second loan to the tune of N$482 million signed in December 2017 was taken to fund the rehabilitation of the TR1/3 between Keetmanshoop and Mariental (Section A: 87.8Km between Tses and Gochas.

Said Ipinge, “The interest payment for this loan is expected to commence from FY2018/19 onwards with capital repayment to start three years thereafter.” 

He said the increases, which comes at a time when the economic melt-down has put pressure in the pockets of households who are heavily indebted, will further bolster the capacity of the Road Fund to support road maintenance projects by Local and Regional Authorities given the government priority to avail mass serviced land to lower income groups across the country. 

RFA overall revenue projections as per its Five Year Business Plan for 2017-2022 averaged some N$2.6 billion per annum from road-user charges.

The current business plan for 2018-2023 projects total funding of N$13.01 billion, or an average of N$2.4 billion per annum, to mange the national road network.

Said Ipinge, “Total revenue raised by the Road Fund by way of road-user charges accelerated from N$2.21 billion in 2016/17 to N$2.35 billion in 2017/18 and is projected to increase to N$2.6 billion in 2018/19. A project increase of 11% which is above inflation.” 

Although the funding gap will likely not be closed down any time soon, Ipinge is optimistic it can be reduced despite a number of vehicles failing to be honest enough in disclosing what distances they would have travelled, thus cheating the state.

It is in that context that RFA has also committed to automate its systems so that individuals wont has to declare themselves, but such a system, the first of its kind in Africa, will pick it up.

Ipinge hopes this will be put in place this year although non has as yet been given a tender to work on it, and thus RFA has not yet come to a pointing of calculating how much this would cost.

He said currently they are busy with the upgrading of the Windhoek to Okahandja road.