Taxi union happy about shelving plan for toll roads

Pendapala Nakathingo, the secretary general of the Namibia Bus and Taxi Association (Nabta) yesterday said he was delighted that the Road Fund Administration (RFA) has shelved plans to introduce tollgates on the country’s national highways.

He said the tolling system would not benefit Namibians.

“They have made a good observation. Introducing the tolling system now is not a good thing.

“Looking at the current charges and the economy, local transportation would have suffered. We appreciate and welcome this move,” he said.

From the onset, the plan has been criticised for potentially overburdening Namibians who are already battling high food and fuel prices.

Fears were that the N$4,2 billion project would result in companies transporting goods passing the costs of tolls on to consumers.

This plan came after the Cabinet approved the introduction of a tolling system in principle.

The RFA has since identified over 70 road sections across the country for tolling, of which only 23 are viable for setting up tollgates.

However, the administration has announced that the plan has been postponed.

RFA chief executive officer Ali Ipinge in a statement yesterday said there is a funding gap of 22% of the allocated budget.

“The revenue collected from the current road user charges is insufficient to fund the needs of road network maintenance.

“The total funding needs for the 2023/24 financial year are N$4,2 billion, resulting in a funding gap of 22% of the allocated budget,” he said.

The RFA has commissioned two feasibility studies on tolling, which found it is economically and practically feasible in Namibia.

“The feasibility study found that 21 roads could fund N$5,8 billion in capital and maintenance expenditure over five years, possibly generating N$7,5 billion in additional revenue to subsidise roadworks across the entire network.

“Empirical research shows toll roads are better maintained, resulting in more jobs, economic opportunities, and lower vehicle operating costs,” he said.

Ipinge said an additional econometric analysis revealed that tolling would add N$1,7 billion to the Namibian economy, increasing gross domestic product growth by 0,4% annually.

“This would be accomplished by creating new jobs, lower vehicle operating costs, and the effects of toll infrastructure investment.

“As a result, the RFA looked into the viability of introducing road tolls as an additional revenue stream to maintain the N$101 billion national road network,” he said.

Ipinge said due to the proliferation of electric and fuel-efficient vehicles over the last 15 years, vehicle fuel demand has fallen by 2% per year.

“This trend will continue as the world phases out gasoline and diesel-powered vehicles, which would result in regular funding gaps for maintenance, and a systematic deterioration of the road infrastructure.

“Fuel-powered vehicles and associated fuel demand will eventually phase out, rendering the current road maintenance funding model unsustainable,” he said.

Currently, the fuel levy contributes about 54% to the RFA’s revenue streams, and an over-reliance on this for road maintenance is not feasible in the long run, he said.

Ipinge said as a result of the prevailing economic climate, coupled with high interest rates and inflation, the RFA has decided to defer planned stakeholder and public consultations on the implementation of toll roads in Namibia until further notice.

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