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RFA invests N$30bn in road infrastructure since inception

By February 24, 2023 2841 0
RFA invests N$30bn in road infrastructure since inception

The Road Fund Administration (RFA) says it has invested more than N$30 billion in road infrastructure in the country, leading Namibia to be ranked number one in Africa and 21 in the world in terms of quality of road infrastructure.

According to the fund, Namibia’s road network of approximately 49,000km is valued at N$101 billion, of which about 83% is unpaved.

The RFA, in its latest annual report, recorded an 11% increase in revenue to N$2.4 billion while assets increased from N$1.8 billion to N$2 billion.
Of the revenue, the fund pocketed a staggering N$1.3 billion in revenue from fuel levies.

Furthermore, Vehicle Licensing earned N$793 million, Cross Border Charges (CBC) earned N$137 million, Mass Distance Charges (MDC)-Foreign earned N$39 million, Mass Distance Charges-Local earned N$150 million, and Abnormal Load Fees earned N$12 million.

Road Carrier Permits contributed N$1 million.

This comes as the fund is targeting to raise over N$700 million from roads tolling after having identified 23 road sections for the establishment of toll gates.

RFA Chief Executive Officer Ali Ipinge said the fund's solvency and liquidity positions have remained stable compared to previous fiscal years, and this has been supplemented by an increase in RFA's reserve fund from N$152 million in 2021 to N$227 million this fiscal year.He stated that RFA collected N$2.42 billion in revenue and invested N$2.2 billion in the management and maintenance of national roads.

Given the backdrop of a protracted Covid-19 pandemic, the period under review did not record significant growth in the road network apart from the upgraded bitumen surfaced sections from road capital projects and rural access roads.

On average, gravel roads were bladed 65 times in the year, which translates to blading every six days. Consequently, the annual blade kilometres increased by 45% during the financial year under review. These generated economies of scale, thereby reducing the unit costs of blading by 26%.

Therefore, the road user paid N$161 per blade kilometre, which is significantly better than the N$217 per blade kilometre paid last year.

Re-gravelling costs according to the RFA remain high, escalating by 39% on a per kilometre basis during the reporting period.

With only 174km re-gravelled, it is to be noted that RFA is not generating the economies of scale to drive down the unit costs to the levels reached in 2018, when re-gravelling unit costs averaged N$365,000/km.

Additionally, reseal unit costs increased by 120% during the year under review and as such, reseal unit costs remain high, rising from N$495,000/km in 2018 to a staggering N$3.2 million/km during the year under review. This unit cost is approaching the unit cost for low volume seals, which requires a lot more engineering work. Thus, this is an area of concern. As the paved road network increases in age, 830 km of roads need resealing which is the focus going forward.

During the year, 517 road signs were replaced at a total cost of N$4,587,757 yielding a unit cost of N$8,874 per road sign.

"Overall, the unit costs analysis reveals unsatisfactory value for money on the major road works, characterised by hyper inflationary costs escalations which results in unit costs running higher than usual. Unit price costing has been included into RFA’s procedure’s agreement with the Roads Authority, to cast management’s attention to unit costs.”
“Considering the aforesaid, management can benchmark these cost escalations against Stats SA producer price index for road engineering works in order to become more cost diligent and deliver better value for money," said RFA.

"We have also deployed funding of approximately N$96 million to 57 Local Authorities and 14 Regional Councils while N$24 million has been afforded to Traffic Law Enforcement (TLE). Notably, our funding is empowering TLE agencies to deploy technology into their operations, driving efficiencies in their respective traffic law enforcement activities and thereby contributing towards a safe road sector," he added.

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Last modified on Friday, 24 February 2023 18:57
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