By Hilary Mare
THE Roads Fund Administration (RFA) has refuted claims that it bailed out government, by paying N$318 million earlier this year to contractors working on various projects for the Roads Authority (RA).
RFA Chief Executive Officer, Ali Ipinge, told Confidente that the funding that was extracted from the parastatal’s reserves was earmarked for situations of that nature, and therefore cannot be considered as a bailout.
Ipinge’s explanation came as the RFA increased road user charges by seven percent last week.
“It will never be a bailout. As you know, over the years we have managed to clear all our deficits and manage the RFA from the money we collect in each financial year,” he said.
“This has given us room to grow healthy reserves, and hence, when the shareholder requested us to assist, we saw it as an opportunity to from our side to improve our road network, and should be seen as our continued effort to assist initiatives that ultimately lead to better roads for road users,” Ipinge said, when asked whether treasury will reimburse the money in the entities reserve fund.
The payment in question was part of N$800 million that the RA owed contractors from the 2015/16 financial year, which government had not budgeted for in the 2016/17 financial year.
Therefore, Finance Minister Calle Schlettwein requested the RFA to pay out the N$318 million, while the rest of the amount is to be paid out by government during the current financial year.
Earlier in the year, Schlettwein confirmed that the projects that had been affected by the over-committal of the budget, included the Windhoek-Okahandja highway, and the Windhoek-Hosea Kutako International Airport road, among others.
It is, however, notable from a report that was compiled, following an RFA stakeholder consultation workshop held on 22 November 2016, that one of the key issues and recommendation is to eventually reduce the alignment of the RFA to the RA.
The other recommendations are a review of funding allocation strategies to approved authorities, a focus on road preservation, more specifically the condition of gravel roads, the investigation of benchmark strategies with neighbouring countries, the implementation of public-private partnerships and making additional revenue from driver offences.
While justifying the need to increase the burden of road users, by financially hiking various user tariffs, Ipinge said that given the consistent annual growth in the country’s vehicle population, of between seven to eight percent, and the natural depreciation in the condition of the country’s roads, the RFA requires an additional N$170 million per annum to sustain its current minimum maintenance levels of the national road network.
“In an effort to maintain a good balance between the ever-increasing road infrastructure capital expenditure (new roads) and revenue collections from road user charges (RUCs), the need to secure annual inflationary adjustments on the RUCs tariffs remains ever important,” Ipinge said.
“It is of paramount importance to start to attend to the unpaved (gravel) road network, with the same level of effort and funding allocation. The RFA will be implementing a strategy in the 2017/18 – 2021/22 business plan period, to prioritise efforts towards the re-gravelling programme, by increasing the current capacity of gravelling maintenance units (GRUs), from four units to eight units, as from the 2017/2018 financial year. These additional GRUs will require an additional funding allocation in excess of N$150 million per annum,” said Ipinge.
Confidente. Lifting the Lid. Copyright © 2015