DANGER: Road fund pothole ahead

ROAD USERS face a 15 per cent year-on-year increase in an assortment of levies through to 2008 to pay for a budgetary ‘black hole’ estimated to hit N$750 million next year.

A director at the Road Fund Administration (RFA) yesterday complained to the presidential commission of inquiry that the Roads Authority’s responsibility for the budget overrun may have stemmed from its failure to look at cheaper ways of keeping Namibian roads in good condition. The RFA has estimated its revenue over the 2003-2008 period as N$4,28 billion as against projected expenditure of N$4,6 billion, which has to be raised during this time.RFA Chief Executive Officer Shakespeare Masiza said the shortfall would be met through a 15 per cent comšpound annual increase in vehicle licence fees, cross-border charges, abnormal load charges, the introduction of “mass distance” road charges and, possibly, fuel levies.Harald Schmidt, an RFA director, said road users would have to cough up for the shortfall by increased charges of the type listed above.Schmidt said the RFA did not have “sufficient funding” to cover such an increase.He lamented that grants were no longer available and donor agencies had resorted to loan financing.”Those who do the job [consultants and contractors who build and maintain the roads] don’t ask where the money comes from.They do the job, they get paid and they go off,” he said, responding to a question by Petrus Kruger, a director of Windhoek Consulting Engineers (WCE).Schmidt was testifying at the public hearings of the inquiry into allegations of irregularities at the RFA and the Roads Authority.WCE is the firm in charge of rebuilding the Okahandja-Otjiwarongo highway, which has become controversial with the Roads Authority being accused of taking the most expensive option: ripping it up and building it afresh, at a cost of N$180 million.Schmidt said they had questioned the Roads Authority’s wisdom in committing N$180 million to one road.”As much as you can prove your point,” Schmidt said to Kruger, “I will not buy it that the entire road should be done in one go”.He said that as a result of money being spent on a few major projects within a short period, the RFA had to borrow N$750 million by next year.They would not start paying until 2007.It emerged during the hearings that the Roads Authority sometimes approved projects without checking whether the RFA had money available.”The challenge is: would road users be able to absorb fuel increases every year?” said Schmidt.”Mr Chairman, we are in a predicament because we have [over-]committed funds”.Schmidt said improved co-operation between the RFA and the Roads Authority, as well as “tools” to ensure the best options were adopted, would lead to “optimum” use of road funds.The RFA, which falls under the Ministry of Finance, collects revenue and pays it over to the Roads Authority, which was created out of the Ministry of Works, Transport and Communication to look after the country’s road network.The RFA has estimated its revenue over the 2003-2008 period as N$4,28 billion as against projected expenditure of N$4,6 billion, which has to be raised during this time. RFA Chief Executive Officer Shakespeare Masiza said the shortfall would be met through a 15 per cent comšpound annual increase in vehicle licence fees, cross-border charges, abnormal load charges, the introduction of “mass distance” road charges and, possibly, fuel levies. Harald Schmidt, an RFA director, said road users would have to cough up for the shortfall by increased charges of the type listed above. Schmidt said the RFA did not have “sufficient funding” to cover such an increase. He lamented that grants were no longer available and donor agencies had resorted to loan financing. “Those who do the job [consultants and contractors who build and maintain the roads] don’t ask where the money comes from. They do the job, they get paid and they go off,” he said, responding to a question by Petrus Kruger, a director of Windhoek Consulting Engineers (WCE). Schmidt was testifying at the public hearings of the inquiry into allegations of irregularities at the RFA and the Roads Authority. WCE is the firm in charge of rebuilding the Okahandja-Otjiwarongo highway, which has become controversial with the Roads Authority being accused of taking the most expensive option: ripping it up and building it afresh, at a cost of N$180 million. Schmidt said they had questioned the Roads Authority’s wisdom in committing N$180 million to one road. “As much as you can prove your point,” Schmidt said to Kruger, “I will not buy it that the entire road should be done in one go”. He said that as a result of money being spent on a few major projects within a short period, the RFA had to borrow N$750 million by next year. They would not start paying until 2007. It emerged during the hearings that the Roads Authority sometimes approved projects without checking whether the RFA had money available. “The challenge is: would road users be able to absorb fuel increases every year?” said Schmidt. “Mr Chairman, we are in a predicament because we have [over-]committed funds”. Schmidt said improved co-operation between the RFA and the Roads Authority, as well as “tools” to ensure the best options were adopted, would lead to “optimum” use of road funds. The RFA, which falls under the Ministry of Finance, collects revenue and pays it over to the Roads Authority, which was created out of the Ministry of Works, Transport and Communication to look after the country’s road network.