RFA hits a N$100m bump in the road

THE Road Fund Administration (RFA) says it faces a N$100 million deficit following a High Court decision to scrap mass distance charges for lorries.

As a result, the company says, it will not be able to finance urgent maintenance work, and continue with the rehabilitation of the notoriously bad strip of road between Karibib and Okahandja. RFA Chief Executive Officer Penda Kiiyala told a media briefing yesterday that although the company has accepted the High Court ruling, it will continue to explore and implement the best possible method for collecting mass distance charges (MDCs) from lorry owners based on the mass of their vehicles and the distances travelled.He said the company needed the money to ensure safe and economically efficient Namibian roads.On June 1, Judge Kato van Niekerk set aside the Government notice which forced truck owners to pay mass distance charges, together with their licence fees, to NaTIS and its collecting agents on an annual basis .The Namibia Road Carriers’ Association (Namroad), supported by the Namibia Agricultural Union, challenged the decision in the High Court after a series of unsuccessful consultations with the Road Fund Administration.Kiiyala said the RFA, like the Roads Authority (RA), accepted the judgement.He said the RFA did not believe that lodging an appeal would be in the best interests of Namibia’s road sector.”The Administration will, however, persist to find the most equitable, practical and cost-effective measuring system in terms of which heavy vehicle owners could contribute their cost-responsibility and fair share towards their use of Namibia’s roads,” he said.During an information campaign in March this year, the RFA informed lorry owners that it had a budget deficit of N$100 million and wished to raise the funds through mass distance charges in the course of the 2006-2007 financial year.The money was to fund road maintenance.Kiiyala said the collection of MDCs by means of fuel levies alone would not promote equity among different categories of road users.”The fuel levy would not sufficiently recover the cost of ‘road consumption’ by heavy vehicles.The main reason is that the road consumption increases more sharply with increases in vehicle weight than it does with fuel consumption,” he said.He added that the Ministry of Mines and Energy determines the fuel price and that Government was also not in favour of drastic increases in fuel levies to make up for the deficit.According to Kiiyala, the RFA will not be able to finance urgent maintenance work, such as the resurfacing of the tarred road between Okahandja and Karibib during the current budget.”The backlog in maintenance work on Namibia’s roads due to a shortage of funds will have to be recovered in future from the heavy-vehicle owners at a possible increased cost.The RFA wishes to underline that the fuel levy cannot replace the MDC,” he said.Kiiyala said the RFA had entered into consultations with the road transport industry on Monday regarding the way forward, including refunding truck owners who had already paid mass distance charges from June 1.He said application forms for refunds would be sent to all the affected truck owners by tomorrow and refunds would be paid as soon as the applications were received.RFA Chief Executive Officer Penda Kiiyala told a media briefing yesterday that although the company has accepted the High Court ruling, it will continue to explore and implement the best possible method for collecting mass distance charges (MDCs) from lorry owners based on the mass of their vehicles and the distances travelled.He said the company needed the money to ensure safe and economically efficient Namibian roads.On June 1, Judge Kato van Niekerk set aside the Government notice which forced truck owners to pay mass distance charges, together with their licence fees, to NaTIS and its collecting agents on an annual basis .The Namibia Road Carriers’ Association (Namroad), supported by the Namibia Agricultural Union, challenged the decision in the High Court after a series of unsuccessful consultations with the Road Fund Administration.Kiiyala said the RFA, like the Roads Authority (RA), accepted the judgement.He said the RFA did not believe that lodging an appeal would be in the best interests of Namibia’s road sector.”The Administration will, however, persist to find the most equitable, practical and cost-effective measuring system in terms of which heavy vehicle owners could contribute their cost-responsibility and fair share towards their use of Namibia’s roads,” he said.During an information campaign in March this year, the RFA informed lorry owners that it had a budget deficit of N$100 million and wished to raise the funds through mass distance charges in the course of the 2006-2007 financial year.The money was to fund road maintenance.Kiiyala said the collection of MDCs by means of fuel levies alone would not promote equity among different categories of road users.”The fuel levy would not sufficiently recover the cost of ‘road consumption’ by heavy vehicles.The main reason is that the road consumption increases more sharply with increases in vehicle weight than it does with fuel consumption,” he said.He added that the Ministry of Mines and Energy determines the fuel price and that Government was also not in favour of drastic increases in fuel levies to make up for the deficit.According to Kiiyala, the RFA will not be able to finance urgent maintenance work, such as the resurfacing of the tarred road between Okahandja and Karibib during the current budget.”The backlog in maintenance work on Namibia’s roads due to a shortage of funds will have to be recovered in future from the heavy-vehicle owners at a possible increased cost.The RFA wishes to underline that the fuel levy cannot replace the MDC,” he said.Kiiyala said the RFA had entered into consultations with the road transport industry on Monday regarding the way forward, including refunding truck owners who had already paid mass distance charges from June 1.He said application forms for refunds would be sent to all the affected truck owners by tomorrow and refunds would be paid as soon as the applications were received.