Roads authorities running on empty

NAMIBIA needs more than N$900 million a year for essential road maintenance, but the State-owned enterprises in charge of the road network are all but penniless.

The Road Fund Administration (RFA) is in the red by N$602 million, according to its chief executive officer, Penda Kiiyala. “We are technically insolvent because of a huge deficit of N$602 million – this was established in March this year,” Kiiyala said yesterday at the opening of a two-day seminar on road financing.Things would have been better had the mass-distance charges (MDC) been introduced, Kiiyala said, “but the private sector successfully halted the implementation through a court order”.”We hope that Government can allocate sufficient funds to us to bridge the gap, as it did with other State-owned enterprises like Air Namibia,” Kiiyala stated.The largest part of the huge deficit was made up of a N$650 million loan taken out locally in 2003 with the approval of the Finance Ministry.”We pay an interest rate of 13 per cent on this loan and the instalments cost the RFA N$84,5 million per annum to complete paying off the loan by 2010,” Kiiyala said.Once the mass-distance charges were implemented in a revised form next year, the RFA could rake in N$4,6 billion by 2011 to cover its road maintenance and possibly the construction of new roads, Kiiyala said.”Cross-border charges are already in place for all foreign vehicles entering our country,” the RFA boss added.”Another method mulled is the concept of toll roads, where the use of certain main roads would require payment at a toll bridge,” said Kiiyala.”Most trunk roads in Namibia are at the end of their lifespan,” he added, “but new roads to be constructed in Namibia will add to the burden of the RFA, which has to find funds to maintain them.””New roads should not be built if additional funds for their future maintenance are not available,” Kiiyala stated.Opening the seminar, Works and Transport Minister Joel Kaapanda requested the 50 delegates to “come up with proposals to introduce a system of road infrastructure charging which passes on to the road users the costs associated with it”.The Permanent Secretary in the Ministry of Works, Transport and Communications, Shihaleni Ndjaba, told participants that one to three per cent of any country’s Gross Domestic Product (GDP) was lost when its roads were in poor condition.”If roads are badly maintained, which results in vehicle accidents and damage to freight transported by road, this can easily double.””For every one Namibia dollar invested in road maintenance, we would save N$3 in their reconstruction.”Most of the road projects in Namibia were funded through external loans, Ndjaba added.Last year some N$729 million was paid over to the Roads Authority for road infrastructure and road construction projects, but that was still insufficient, he said.According to Erastus Ikela, CEO of the Roads Authority (RA), some N$900 million each year was required to maintain Namibia’s roads.”We have 5 500 kilometres of tar roads, 25 000 km of gravel roads and about 12 000 km of earth (sand) roads,” Ikela said.”If we only seal some 440 kilometres of gravel roads each year with tar (asphalt), at today’s cost of N$170 000 per kilometre, we would need N$75 million per annum.If we just blade (grade) all gravel and earth roads eight times per year costing N$350 per kilometre, it would require N$100 million each year.”A local consultancy prepared a Sector Wide Approach (SWAp) analysis of the road sub-sector.This will enable the Transport Ministry and the relevant stakeholders in the road sector to bundle all road projects and programmes and to promote coherence between policy formulation, budgeting and actual project results.The study noted that two thirds of the funds required each year for road construction and road maintenance was generated by the RFA, mostly through the fuel levy, which currently stands at 82 cents per litre of petrol or diesel.One third of the generated funds is used for new roads and half is used for road maintenance.”The backlog built up regarding (necessary) rehabilitation of the road network amounts to over N$3 billion,” the experts warned.”We are technically insolvent because of a huge deficit of N$602 million – this was established in March this year,” Kiiyala said yesterday at the opening of a two-day seminar on road financing.Things would have been better had the mass-distance charges (MDC) been introduced, Kiiyala said, “but the private sector successfully halted the implementation through a court order”.”We hope that Government can allocate sufficient funds to us to bridge the gap, as it did with other State-owned enterprises like Air Namibia,” Kiiyala stated.The largest part of the huge deficit was made up of a N$650 million loan taken out locally in 2003 with the approval of the Finance Ministry.”We pay an interest rate of 13 per cent on this loan and the instalments cost the RFA N$84,5 million per annum to complete paying off the loan by 2010,” Kiiyala said.Once the mass-distance charges were implemented in a revised form next year, the RFA could rake in N$4,6 billion by 2011 to cover its road maintenance and possibly the construction of new roads, Kiiyala said.”Cross-border charges are already in place for all foreign vehicles entering our country,” the RFA boss added.”Another method mulled is the concept of toll roads, where the use of certain main roads would require payment at a toll bridge,” said Kiiyala.”Most trunk roads in Namibia are at the end of their lifespan,” he added, “but new roads to be constructed in Namibia will add to the burden of the RFA, which has to find funds to maintain them.” “New roads should not be built if additional funds for their future maintenance are not available,” Kiiyala stated.Opening the seminar, Works and Transport Minister Joel Kaapanda requested the 50 delegates to “come up with proposals to introduce a system of road infrastructure charging which passes on to the road users the costs associated with it”.The Permanent Secretary in the Ministry of Works, Transport and Communications, Shihaleni Ndjaba, told participants that one to three per cent of any country’s Gross Domestic Product (GDP) was lost when its roads were in poor condition.”If roads are badly maintained, which results in vehicle accidents and damage to freight transported by road, this can easily double.””For every one Namibia dollar invested in road maintenance, we would save N$3 in their reconstruction.”Most of the road projects in Namibia were funded through external loans, Ndjaba added.Last year some N$729 million was paid over to the Roads Authority for road infrastructure and road construction projects, but that was still insufficient, he said.According to Erastus Ikela, CEO of the Roads Authority (RA), some N$900 million each year was required to maintain Namibia’s roads.”We have 5 500 kilometres of tar roads, 25 000 km of gravel roads and about 12 000 km of earth (sand) roads,” Ikela said.”If we only seal some 440 kilometres of gravel roads each year with tar (asphalt), at today’s cost of N$170 000 per kilometre, we would need N$75 million per annum.If we just blade (grade) all gravel and earth roads eight times per year costing N$350 per kilometre, it would require N$100 million each year.”A local consultancy prepared a Sector Wide Approach (SWAp) analysis of the road sub-sector.This will enable the Transport Ministry and the relevant stakeholders in the road sector to bundle all road projects and programmes and to promote coherence between policy formulation, budgeting and actual project results.The study noted that two thirds of the funds required each year for road construction and road maintenance was generated by the RFA, mostly through the fuel levy, which currently stands at 82 cents per litre of petrol or diesel.One third of the generated funds is used for new roads and half is used for road maintenance.”The backlog built up regarding (necessary) rehabilitation of the road network amounts to over N$3 billion,” the experts warned.