RFA Points Out Funding Challenges for Road Infrastructure

While the 2014 Global Competitiveness Report ranks Namibia’s road infrastructure at 52 among 144 countries assessed, the Chairman of the Road Fund Administrator (RFA), Penda Ithindi, has cautioned that “we cannot, as well, sign an endless song of praise as if challenges do not exist in regard to the adequacy of both the funding for and the quality of new roads development and maintenance of existing infrastructure outlay.” The global report assessed the quality of Namibia’s 45 400km roads network, including more than 6300km bitumen roads and 25 000km gravel roads.

Speaking at a stakeholder business meeting yesterday, where the RFA’s newly appointed Chief Executive Officer, Ali Ipinge, was introduced, Ithindi noted that Namibia’s Long-term Roads Master Plan of 2012 contemplated the optimal funding for road infrastructure within the Road User Charges to be at N$3.45 billion for the 201415 financial year, compared to N$1.98 billion that is actually funded. “The resultant funding gap of N$1.47 billion or some 42.5 percent of the required optimal allocation is largely inactive of the annual backlog in especially the maintenance of roads network. The funding gap, which has been accumulating for some time now underscores the need for internal rebalancing between roads maintenance on one hand, and new roads development on the other hand. It also calls for strategic prioritisation in project planning to avoid continuing to spread scare resources too thinly,” said Ithindi. The RFA also warned that continued funding constraints could defeat the country’s aim of becoming a regional transport hub.

The RFA Chairman added that notwithstanding the growing funding needs, the RFA has been able to maintain a steady growth in Road User Charges (RUC) revenues, in line with growth in the revenue base, with little or no RUC rate increases. RUC revenue is estimated to increase by about 17 percent to N$1.73 billion during the 201415 financial year, up from N$1.48 billion during the 201314 financial year.

Ithindi also noted that a distinct achievement at the RFA has been in the in-sourcing of the management and collection of Cross Border Charges (CBC, which were previously outsourced to a private service provider. “Unlike the textbook example of revenue adjustment costs experienced during the transitional period of institutional changes, CBC revenue productivity rised instantaneously, rending the insourcing transformation seamless and revenue enhancing,” remarked Ithindi.

Meanwhile, RFA’s newly appointed CEO, Ipinge, said that his institution’s ability to fulfil its mission to manage Namibia’s road user charging system to provide sufficient funds for a safe and economically efficient road sector, for the benefit of all users, depends on your trust and confidence. “My challenge will be to deliver on this mission without compromising RFA’s effectiveness and ability to execute and deliver what the sector needs. Greater involvement and transparency must help RFA to become an even more effective organisation. No-one wants it to be an inward looking organisation more concerned about running itself than delivering results”, added Ipinge.

Source : New Era