Getting infrastructure back on trackPrivate sector must play bigger role At current tax rates, Government won't be able to foot the bill for the N$255-billion backlog in infrastructure development. Why not toll new roads, thereby increasing the transport network at little to no cost to the taxpayer? – Namene Kalili, FNB Namibia Namibia has a backlog of N$255 billion in infrastructure development and a lot has to be done if the goals of the Fifth National Development Plan (NDP5) are to be achieved.
“Over the past couple of weeks, the Namibian road sector has been in the news for a variety of reasons - be it financially or with regard to the upkeep of numerous roads used by companies, individuals and tourists alike. Fact is, we are currently lagging behind when it comes to road and rail infrastructure, something that is of vital importance to a country that strives to become a logistics and distribution hub by 2030,” says Namene Kalili, Senior Research and Development Manager at FNB Namibia.
An investment of nearly N$34.6 billion is needed to meet NDP5's targets for road infrastructure and railway network development over the five years to 2021/20 – N$25.9 billion for roads and N$8.7 billion for rail.
Of this, nearly N$2.5 billion should be spent on roads in the current fiscal, while N$1.01 billion is earmarked for rail.
Kalili says the funds allocated for this in NDP5 are commendable, but points out that Namibia's current infrastructure development backlog currently amounts to N$255 billion.
In 2014, the Bank of Namibia (BoN) broke down the infrastructure backlog as follows: Roads (N$17.9 billion), railway (N$60.9 billion), ports (N$34.9 billion), airports (N$9.7 billion), energy (N$50.8 billion), and housing (N$45 billion).
Projects of this magnitude, like roads, rail, housing, and to a certain extent even education and health services, cannot be achieved by Government alone, Kalili says.
“For many years we have been advocating for much more private sector participation and the unlocking of investment channels to increase infrastructure spend. This would lessen the burden on Government so that they can focus on social services and governance.”
For Namibia to be world class in terms of infrastructure, a huge amount of money is needed, something that the Government will not be able to raise at the current tax rates, he says.
“We feel that the private sector must start playing a much bigger role and not be seen as a provider of funds only. Namibians and non-Namibians alike use our roads and as such they should be allowed to participate and contribute towards the construction and maintenance of the roads through the right investment vehicles to enable even broader participation.
“We are all aware that vehicle numbers and trade volumes have increased massively within SADC countries, but our infrastructure is struggling to keep up with the demand and hence the roads have become very congested.”
Kalili called for more “freedom” in the maintenance, management and construction of infrastructure and less regulation on stakeholders as public goods and services. “Legislation may not allow road management to be implemented for a fee. Why not toll new roads, thereby increasing the transport network at little to no cost to the taxpayer and placing the expense squarely on the shoulders of those who choose to use such roads?”
Kalili says this could lead to the creation of new road management companies, which could eventually list domestically to broaden equity participation, while reducing the road infrastructure backlog and increasing the quality of the national road network. “Listed entities are usually more transparent because of the strict public disclosure requirements from the stock exchange,” he says.
(c) 2017 | NMH Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers