Road Fund receives N$350 million loan from Nedbank to upgrade highly trafficked gravel roads to a low volume bitumen seal
The Road Fund Administration has received a loan of N$350 million from Nedbank Namibia to finance its Low Volume Road Seal Strategy (LVRSS), to upgrade highly trafficked gravel roads to a low volume bitumen seal.
The LVRSS is an alternative maintenance strategy to optimize the available funding by doing more road maintenance work with limited financial resources. Upgrading roads to Low Volume Seal standards has wide-ranging benefits, which include, an increase in road user satisfaction and reduction of vehicle maintenance costs, reduction in dust emissions, improved road safety, access to communities and improved vehicle/driver efficiency that reduces fuel costs.
The Road Fund designed the LVRSS in October 2020 due to the increasing funding gap, as well as serious challenges due to inadequate maintenance, rapid deterioration of the gravel road network, depletion of available gravel material, and the high cost of gravel road upgrading, amongst others.
The main objective of the LVRSS is to improve the level of service on gravel roads to the road users, resulting in reduced vehicle operating costs and time savings. The overall maintenance demand is also reduced leading to cost savings in several routine maintenance activities.
“Due to budgetary constraints, it has become a serious challenge to adequately maintain the gravel road network. Consequently, the road network is in poor condition and continuously deteriorating. Indications are that if we do not act promptly, the situation will deteriorate to a point where 75% of the gravel road network is projected to be in a poor-to-very poor condition by 2025,” explained the Road Fund CEO, Ali Ipinge.
According to Nedbank, current estimates indicate that Namibia should upgrade 315 km to LVSR per year for N$923 million per year.
“The funding agreement with the RFA illustrates our commitment to playing our part in seeing the Namibian economy grow. Good roads play a crucial role in overall economic development. At Nedbank Namibia, we do not doubt that the -loan will add value to the transport sector in the country and further stimulate economic activities in other secondary and tertiary sectors,” said Nedbank Namibia Managing Director, Martha Murorua.