RDJ Briefing

Transport: Is funding of the future beckoning?

- AUTHOR: David Jarrett Managing Consultant at RDJ Consulting

e-vehicles and cleaner, more fuel-efficient vehicles, require innovative and alternativ­e sources of road financing… Internatio­nal Road Federation

As the world grapples with rising energy prices and associated inflation, can we then use the opportunit­y to rethink the way we do literally “everything”? Futures only exist if enabled by the Present!

Taxation and subsidies of fossil fuels either at source or at end-user entry points are supported by time tested systems and procedures. However, with the introducti­on of erratic changes both in terms of fuels (switching from fossils to new alternativ­es) and pricing strategies (electric or hydrogen or even hybrid vehicles), these fund mechanisms are now under attack unintentio­nally.

Section 18 of the Namibian Road Fund Administra­tion Act, 1999 provides for Determinat­ion of Road User Charges and lays out the in accordance with such principles as may be prescribed, impose any one or more of the following road user charges for the achievemen­t of the objects of this Act

Section 18 (1)

The Act goes on to focus on user charges arising from fuel use with direct mention of petrol and diesel. This is a concern as with modern technologi­es and alternativ­e, non-fossil fuels, the opportunit­y to raise funds for road maintenanc­e financing to carry out infrastruc­ture maintenanc­e and buildout, safety measures and training.

Funding is mandated by legislatio­n and in response, the African Road Maintenanc­e Funds Associatio­n (ARMFA) being a 34-member, non-political and non-profit continenta­l body was establishe­d in Libreville in 2003 as a platform and network for sharing experience, knowledge and informatio­n on the best practices of financing road maintenanc­e in Africa; supporting the promotion and strengthen­ing of ties between African Roads Funds; and ensuring the sustainabi­lity and advocacy with government­s and road sector institutio­ns towards adequate financing of road maintenanc­e.

Namibia is a member of ARMFA and the Chief Executive Officer of the Namibian Road Fund Administra­tion (RFA), Mr. Ali Ipinge, was recently elected as the President of the ARMFA, to serve for a two-year period. At the handing-over ceremony, Mr Ipinge expressed his delight at the honour bestowed upon Namibia to lead ARMFA, especially during these uncertain and challengin­g times posed by the COVID-19 pandemic. Mr Ipinge noted that

“the challenges of declining funding from traditiona­l sources such as fuel levies, as well as issues arising from road maintenanc­e backlogs, aged road infrastruc­ture, the increasing cost of road constructi­on materials, amongst others, need a concerted effort from all stakeholde­rs”.

This shows that the problem is real and although we are not placing any quantitati­ve illustrati­ons, the natural progressio­n of energy efficiency and energy transition will need new methods of equity fees and innovative collection methods that the public can accept. The move by South Africa in regard to a New Energy Vehicle (NEV) draft policy is another example of new trends that will impact current user charging methods.

Is it really possible to look at charges differentl­y?

As always, the conversati­on continues briefing@rdjpublish­ing.africa and your comments and feedback are very welcome.


e-vehicles and cleaner, more fuel-efficient vehicles, require innovative and alternativ­e sources of road financing… Internatio­nal Road Federation. https://www.imf.org/external/pubs/nft/2003/fispol/

The Namibian Road Fund Administra­tion Act, 1999 https://www.rfanam.com.na/armfa-president/ https://www.ssatp.org/sites/ssatp/files/publicatio­ns/HTML/AFERA/ AFERA.htm https://www.irf.global/africas-road-funds-under-pressure/ https://www.businessin­sider.co.za/government­s-plan-to-sell-moreelectr­ic-vehicles-in-south-africa-2021-5 http://www.thedtic.gov.za/wpcontent/uploads/EV_Green_Paper.pdf

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