The Road Fund Administration (RFA) will increase road user charges by 4,3% from the start of May to raise additional funds for the maintenance of the country's roads.
RFA chief executive officer Ali Ipinge announced this at a media briefing today (Thursday). The increase in road user charges was approved by finance minister Calle Schlettwein in March and published in the Government Gazette on Tuesday this week.
"The Road Fund derives about 60% of its revenue from the fuel levy, which will be adjusted from N$1,30 per litre to N$1,36 per litre from 1 May 2019," Ipinge said.
Road user charges consist of a fuel levy, a vehicle licensing and registration fee collected through the Namibian Traffic Information System (Natis), cross border charges collected at RFA border offices, mass distance charges, abnormal load charges and road carrier permits.
Ipinge said that the company's administrative management costs currently stand at 12,5% of total revenue. He added, though, that the continued increase in road user charges would not be not sustainable in the long run.
He emphasised that on the company's 'pay as you use' principle users pay to benefit from newly upgraded roads.
In addition, Namene Kalili, RFAs executive program management and policy advisor, explained that the parastatal's motivation to potentially introduce toll charges on main roads in the future would be to take the weight off the fuel levy charge.
"Looking at the Windhoek-Okahandja road specifically, it has been upgraded from two lanes to eight lanes, so your maintenance cost is going to increase quite substantially," Kilili explained.
He added that toll charges would take care of the additional cost of road upgrades instead of slapping it on fuel levies.
Kalili said the problem with increasing the fuel levy is that 40% of road users are not based in Windhoek and most people will not use that road.
"Its unfair to actually put that cost onto them, so by tolling it you are specifically focusing on those who actually use it. If you don't use it you don't pay for it," Kalili said.
Despite unfavorable economic conditions, Ipinge said the RFA managed to collect revenue of N$2,37 billion during the 2017/18 financial year, which increased to approximately N$2,46 billion in 2018/19.
The RFA also came up with a five-year business plan from 2019 to 2024, in which they anticipate to collect N$2,5 billion in the 2019/20 financial year.
The business plan includes loans and expenditure for road projects and programs through the Road Fund (RF).
In the current financial year, the RFA will be able to fund N$1,2 billion for maintenance of the national road network and N$244 million for rehabilitation of the national road network, including bridges.
Local authorities and regional councils will be allocated N$119 million for the maintenance of urban streets and rural road networks. N$40 million will be allocated for the operation of Natis. Traffic law enforcement and agencies will receive N$38 million.
Funding will also be provided to the National Road Safety Council, and to cover the administrative expenses of the RA and RFA, and to buy land and build a one-stop Natis centre in Windhoek.