RFA views in on Namibia’s Logistics Hub
Foreign trucks on Namibian roads could minimize mass distance charges.
31 December 2019 | Infrastructure
RFA Executive for Programme Management, Policy and Advice Namene Kalili, says foreign trucks on Namibian roads will minimize mass distance charges (MDCs), which accumulate to almost N$200 000 per person per year.
Kalili said that Namibia has a very small population as well as a small vehicle population. With a road network that measures about 48 000km and with only about 390 000 vehicles registered in Namibia, the cost per vehicle is high to maintain for such a big road network.
He added that per capita, Namibia has the seventh highest number of road kilometers per person in the world.
“We have more roads per person than most European countries. The United States is the only major economy that has more roads per person than us. This makes it very expensive for Namibian road users. So we have to bring in foreign vehicles and trucks to spread the road user charges (RUC) over a much larger base.”
Kalili stated that the RFA is trying to support volume growth as much as possible to avoid continuously drawing from the existing small base.
“We are busy at a country level to look at the costs of RUCs along the corridors to allow for competitive corridors in terms of cost and time to further attract more cargo. Proximity to a road network increases your income substantially. The question is, how do you bring traffic onto the road to increase the wealth for those along the roads?”
According to Kalili, foreign trucks pay about N$40 million a year to use Namibian roads. During the financial period from April 2018 to March 2019, the RFA recorded an increase in revenue from about N$28 million to about N$41 million from foreign trucks that used our roads.
He attributed this to the efforts of WBCG and maintains that once you have the right volumes, you can build roads to the right standard.
“This is where you get the money for upgrades. The foreign vehicle component is crucial as we cannot maintain this road network with the current vehicle population in Namibia.”
Kalili is also of the opinion that the RFA can positively contribute towards Namibia’s logistics hub aspirations. “We just need to align and make sure that our charges and policies are friendly to foreign trucks.”
The RFA is involved in discussions surrounding TransNamib’s road-to-rail strategy. As a result of the damage to roads caused by the trucks and to reduce maintenance costs, cargo needs to be shifted from road to rail. However, once truck’s contributions to road maintenance is reduced, the revenue aspect shrinks.
“As a result, the strategy being looked at now is to introduce a rail fund, which will run similarly to the RFA, but will maintain the rail network. Now you pay a kilometer usage fee for the rail and this can create opportunities for private sector involvement as well. A lot more cargo will go onto the railway line and the funding would maintain it,” Kalili said.