The Road Fund Administration (RFA) has given government some N$1.25 billion dollars out of its road users fee collections, meant to pay for outstanding invoices for construction projects carried out by private companies.
Speaking to The Patriot, RFA Chief Executive Officer, Ali Ipinge disclosed that of this total amount, some N$500 million has already been set aside to settle invoices during the course of this financial year alone.
Said Ipinge, “Government approached us to raise funding to meet these obligations,” adding that the money was not meant to fill up government coffers.
By July of 2017, all government invoices amounted to more than N$3 billion and were said to be settled by the end of August of that year. President Hage Geingob is on record registering his discontent with the piling up of unsettled invoices adding that he was aware of the serious consequences this was posing for business.
The same year, government said it only promised to settle all outstanding invoices that government owed to service providers that were accrued during the 2016/2017 financial year – not those of the current financial year. It turned out that not all service providers had received what was due to them as per the President’s promise.
Information coming from the construction industry is that some companies were resorting to borrowing from banks to pay their workers.
In the meantime, RFA has managed to collect revenues totaling N$2.37 billion during the 2017/2018 financial year which has increased to approximately N$2.46 billion for during 2018/2019.
RFA further anticipates collecting another N$2.5 billion during the 2019/2020 financial year as per its approved new business plan.
Ipinge said funds continue to be limited and that RFA will only be able to pump N$1.2 billion into the maintenance of the national road network by the Roads Authority.
Namibia’s quality of roads remains the best in Africa, according to a latest report.
The rehabilitation of the national road network which includes bridges will see a total of N$244 million being invested.
A N$119 million contribution to the maintenance of urban streets and rural road network will also be made to Local Authorities and regional councils this year.
Another N$40 million will be given to the Namibia Traffic Information System (NaTIS) while other monies will go to traffic law enforcement authorities, projects of the National Road Safety Council, administrative expenses of RA, RFA, development of a NaTIS one stop centre and the Mass Distance Charge Automation project.
Road user charges increased
In the meantime, finance minister Calle Schlettwein has approved a 4.3% inflation linked hike in road user charges.
Said Ipinge, “the effective date as per the government Gazette is the 1st of May 2019.
For instance, the Road Fund derives about 60% of its revenue from the fuel levy, which will be adjusted from N$1.30 per liter to N$1.36 per liter.
“This increase will certainly bolster the Road Fund revenue to provide additional investments towards the maintenance, preservation and rehabilitation of the urban road network which is critical to the attainment of Namibia’s transport sector programs, logistical hub agenda and economic growth.”
Ipinge also commended the country for doing well in terms of the global ranking in the quality of roads as per the World Competitiveness Report which ranks Namibia the 25th country with the best road network system in the world.
“RFA support research and innovation in road construction, best practices, usage or environmentally friendly material through the funded institutions,” he said.
Meanwhile, he also said the limited funding calls for other pools of revenue to be established, part of which would mean the installing of toll gates on national roads.
This then implies that road users will be doubly charged since they are already contributing road user fees.
“These are for people who use the roads, if you do not use it, you do not pay,” clarified RAF’s Namene Kalili.