Select Page

Unions, analysts at odds with the Road Fund Administration’s planned toll system

Unions, analysts at odds with the Road Fund Administration’s planned toll system

By Clifton Movirongo.

Economic analysts and national union leaders have refused to jump on the bandwagon and support the Road Fund Administration (RFA) proposed plan to introduce a toll system.

Economic analyst, Klaus Schade, said that the RFA is coming under pressure from various angles such as more fuel-efficient vehicles result in lower fuel levies and that road network upgrading from sandy tracks to gravel roads to bitumen standards increases maintenance costs. He expressed that another reason is, the introduction of e-vehicles in the not so distant future would under the current levy system not contribute to road maintenance financing.

“Increased mobility could mitigate the effect of more fuel-efficient vehicles but will not solve the overall financing challenges. Currently motorists contribute about N$488 million in form of fuel levies. Hence, the additional N$800 million for just a few selected roads could be a significant burden on commercial and private road users. The costs and modalities of the introduction of the toll system has not been explained in detail. It is also not known whether these are net revenue – meaning toll fees minus operating expenditure such as personnel expenditure – or gross revenue,” commented Schade.

The economical analyst explained that it is also not known whether RFA has conducted feasibility studies into any alternative financing models, which would be important to weigh the costs and benefits of these different options.

Schade advised that one option that Namibia would need to pursue in earnest is to promote intermodal transport and move more goods and passengers on the rail system. “This would reduce the heavy traffic on our roads substantially and hence, reduce maintenance costs, and most likely also road traffic accidents. Likewise, reliable speedy rail passenger services to the north could reduce the number of minibuses and private vehicles on our roads and again lower maintenance costs.”

Several national unions have also weighed in and strongly condemned the RFA’s initiative regarding toll systems. The unions, particularly the National Union of Namibian Workers (NUNW), Namibia Transport and Taxi Union (NTTU), and Namibia Farm Workers Union (Nafwu) have deemed the RFA’s plan a total no go.

Speaking to the Economist, NUNW Secretary-general, Job Munyaro said he “totally” does not support what the RFA is trying to accomplish and cautioned that “these people (the RFA) should know when enough is enough”. “That is pure exploitation and it is not going contribute to the development of this country,” he said.

Munyaro added that the RFA is only thinking about “their pockets and do not envision what disruption toll roads will cause to the transport system” and how negatively it will affect those who cannot afford toll fees.

NTTU president, Werner Januarie, said tolling of roads is economically not viable for such a small population and that “it is totally not acceptable as it pertains exorbitant fees”.
He added, “We must have an understanding that it is not something that government should prioritise right now because that is definitely going to shift the fares for the transport system plus toll roads will heavily affect the poor as tolls will increase exorbitantly,” said Januarie.

“I’m absolutely not supportive of toll roads but maybe in the future, 20 to 30 years from now it might be feasible. With that said, the RFA should go play far with such ideas and above all, Ipinge must call up his conscious,” Januarie commented.

Nafwu Secretary-general, Rocco Nguvauva, articulated that most farmers travel and move their livestock in cohorts and a toll system will put them to a disadvantage. He said as farmers are the lowest paid class group in Namibia, most of them cannot live up to such high fees that toll roads is accustomed with.

The RFA in its defence argues that at present, rehabilitation costs are around N$6.1 million per kilometre and that the actual requirement is to rehabilitate 200 km of roads annually. However, the parastatal additionally added that it has a 4.5-year rehabilitation backlog of 900 km.

“The RFA cannot afford such rehabilitation with its current revenue base and if nothing is done about it, then the country will lose 900 km of roads and an asset worth N$10 billion in the near future. This would compromise our fickle economy even further, as 73% of our tourists enter our country by road, 63% of our imports enter by road and 22% of our exports leave by road, whilst supporting 24,700 formal and 10,700 informal jobs,” said Namene Kalili, RFA’s Executive Manager for Programme and Policy Advice.

“At this stage, we know that most vehicle manufacturers will produce more electric vehicles than internal combustion engine vehicles by 2023, at which point we expect 20,000 electric vehicles to enter our country annually and by 2030, we expect all vehicles to be electric. Thus, we are in a race against time to restructure our current road maintenance model to accommodate electric vehicles before the fuel levy become redundant,” Kalili said.

He added that “current deterioration models show that for the current level of road maintenance at N$2.7 billion, the road user needs to fork out an additional N$3.9 billion in damages to their private vehicles due to the poor road condition”.

According to Kalili, this amounts to N$6.6 billion cost to the road user. He added that if road maintenance funding can be increased to N$4 billion annually, then roads can be restored to their original design specifications.

“Tolling is one of many options the RFA is exploring to close the maintenance funding gap. Globally we are seeing more and more countries moving towards tolling. Most countries that have better roads and higher road connectivity than Namibia have toll roads, to supplement road maintenance funding. And if we want to maintain the quality and connectivity of our roads, we will have to develop new charging mechanisms,” Kalili added.

The parastatal also maintains that tolling merely one of the proposed new revenue streams that it is exploring to close the funding gap and effectively the maintenance and rehabilitation of the national road network.


 

About The Author

Intern

The Economist accommodates two interns every year, one per semester. They are given less demanding, softer issues to hone their skills, often with a specific leaning to social issues. Today, many of our interns are respected journalists or career professionals at economic and financial institutions. - Ed.

Rain Rate >UTC + 2 hrs = Namibian Time<