Transport: Is funding of the future beckoning?

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.

Readings:

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