What should be the Namibian approach on road conservation? Before we can work out new strategies and tactics for an optimised road conservation management system, we should deal with the present physical state of Namibia´s road sector.




Namibia's Department of Transport is in a predicament in so far that the conservation expenditure has accelerated faster than the ever rising conservation demands of the increasing road system could reasonably expect. The reasons for this disturbing situation in Namibia are the same as in many other countries: inflation, recession, low productivity, constant increase in traffic and axle loads to unforeseen levels and environmental factors like the specific Namibian climate. Additional aggravating circumstances in Namibia were caused by a situation of colonial power structures until very recently with the resulting unbalanced economical situation. All these factors have contributed to the situation where the budgetary road conservation situation simply got out of hand [10].

More than one half of the Namibian road system of approx. 5.200 km of paved roads has pavements which are more than 20 years of age [11]. For the next 5 years the length of paved roads which are older than 20 years will increase with approx. 300 km/year. It has been proved over 30 years of maintenance experience on Namibia's paved road network that the optimum maintenance sequence will be an 11, 9, 7, 5 years reseal cycle. After completion of this cycle, after approx. 30 years, rehabilitation or even rebuilding of the paved road can be done. To keep this reseal sequence it would be required to reseal 600 km paved roads per year while between 1980 and 1986 only 190 km per year were in fact resealed. This tendency has aggravated even further in the 1990s. The mean cost of a reseal is in the order of US $ 20.000 per km for a 13 mm chips surfacing which represents the average value between a cheap fogspray and a full-scale premix. For an ideal maintenance tempo of 600 km/year US $ 12.000.000 will have to be budgeted for. But besides these more regular reseal requirements a road has to be rebuilt after some time. Under best circumstances it can be assumed that a road will need a complete rebuilding upgrade after 30 to 40 years of service life. With this re-building-cycle, for a current network of 5.200 km of paved roads and a current mean price of US $ 125.000 per km for a re-built road, a further US $ 5.000.000 per year is required. This total estimate of US $ 17.000.000 (N$ 65.000.000 approx.) for full paved road conservation is not fully available at the current date.

Even in Namibia, which always had boosted to possess the "best road system in Africa", the trend was towards a progressive deterioration of the paved road network during the first half of the 1990s. The state of paved roads in Namibia can be divided into four groups [12]:

# Group 1: Collapsed Roads

Such " collapsed and unserviceable roads" which represent Phase 4, as described earlier in Par. 1.4, are fortunately not found in Namibia as yet. But, the writing is on the wall! The basic structure of these roads - which are ample in some of our northern and north-eastern neighbouring countries due to civil wars and/or a complete lack of road conservation - is a destroyed pavement structure and these roads are difficult, expensive and dangerous to use. They can only be recovered by a partial or complete reconstruction at a cost which comes to 50% and more of the full costs of constructing a new highway.

# Group 2: Roads at the " Critical Point"

Unfortunately there are quite a number of Namibian candidates in this group which represents Phase 3 (Par. 1.4) like Trunk Road 1/11: Oshivelo to Ondangwa, Trunk Road 1/8: Otjiwarongo to Otavi, Trunk Road 8/2: Mururani to Rundu ( carbonation problem), Main Road 92: Ondangwa to Oshakati and Oshakati via Oshikuku to Ombalantu, Trunk Road 2/3: Omaruru to Karibib and others. These roads have reached the critical points of their lives and need part or complete surface strengthening to keep their basic layerworks structure intact. The rehabilitation costs for such rehabilitation candidates can be as high as 50 % of the costs of a new highway. If no rehabilitation will be applied within the next couple of years deterioration will continue with no real possibility of stopping the process. They will gradually develop into "Group 1: Collapsed Roads" if nothing is done. In spite of the surface wear like extensive cracking and singular pot-holes or the eating-away of bitumen edges at the shoulders, some of these roads still seem to have an acceptable appearance, and the majority of their users do not perceive how critical their state really is.

# Group 3: Roads in the State of an " Accelerated Wearing Process"

This is a large group of roads (see Phase 2 in Par. 1.4) which - in spite of reasonable routine conservation - shows normal surface wear by reaching the end of the economic and technical life time and needs re-surfacing or rejuvenation of the bituminous seal. Nevertheless, either as a result of insufficient routine conservation or because of technical deficiencies during the construction stage some of these roads will need surface strengthening quite soon. Candidates in this group are parts of Trunk Road ½: Keetmanshoop to Grünau, Trunk Road 1/4: Kalkrand to Rehoboth, Trunk Road 2/5: Otjiwarongo to Outjo, Trunk Road 7/1: Okahandja to Karibib and others. It has to be observed that roads in this group can still look rather good and only highway engineering experts will detect the symptoms of an accelerated wearing process.

# Group 4: Well Conserved Roads

Fortunately there are in Namibia a large group of paved roads which are still in a good to satisfactory condition of conservation. This group represents roads which are satisfactorily conserved according to a programme adapted to traffic volumes and types, road materials, climate, pavement types and other variables. This group symbolises approximately 60 % of the total network of paved roads in Namibia.

In summary, in Namibia approximately 40 % of all paved roads are falling in Group 2 or Group 3. The volume of overdue surface strengthening, rehabilitation and reconstruction works could soon become a problem of unmanageable proportions if not urgent steps - especially of funding - are taken now! At the same time there is currently no proper mechanism which could ensure adequate financing of the rehabilitation works and it seems there is no flexible and efficient organisation within the framework of the Ministry of Works, Transport and Communication in place which can carry out this great job .

Therefore it can be concluded that there are two major problem areas which have to be dealt with before we are able to devise a new system for an optimised road conservation framework:

# How should road conservation be financed? (Overcoming virus 1);

# Which changes in a new Road Authority dispensation will be indispensable to the new successful road sector organisation? (Overcoming virus 2).




Financing of road network conservation should be by means of a new Namibian System of Road User Charges. Such a system was designed for Namibian economic and technical conditions since Independence. With the forthcoming implementation (as from April, 1st 1996) of this new system Virus 1 can be successfully overcome. The key points of this new system will be summarised in the next section of this Position Paper [13].




1. The proposed system for a new road user charging policy has at its core the premise that road users should pay for their use of the roads and that the price paid be linked to the budgeted expenditure on road conservation and provision. Furthermore the latter should determine the level of the former. A further premise should be that the road conservation and road provision budget is appropriate according to the national economic objectives of the Government of the Republic of Namibia (GRN), thus no overspending nor underspending on road conservation and provision should take place. This means that such road user charging system has to be based on optimised road conservation and road provision systems and on sound technical and engineering analysis to establish real costs and not on guess work. At this stage only physical, marginal costs in a direct engineering sense are analysed. External or environmental costs like direct pollution of air, groundwater and soil as well as noise pollution are not considered in the Namibian road charging analysis but this cannot be excluded in the future [14].

2. In practice this will mean that road users will by means of annual license fees be paying for the privilege of being able to use the roads and for the actual use made of the roads, by means of fuel levies, transit charges, fees and fines for overloading and also weight-distance charges for heavy vehicles. The implications are that in future all vehicles, including those owned by the Government of Namibia, with the exception of diplomatic vehicles, will pay annual license fees. Furthermore, a refund of the fuel levy can be claimed only for fuel actually used for off-road purposes.

3. Transit charges and weight-distance charges are new to Namibia, and will have to be implemented after some careful preparatory work. Transit charges would have an impact on international traffic from neighbouring countries and should be implemented after consultation with the countries concerned (see: Annexure 3). Weight-distance charges are of absolute necessity in order to achieve the objectives of the proposed new road charging scheme but will require some investigation concerning their enforcement.

4. The proposed road user charging system would not mean that the Ministry of Finance might lose her ability to use the road transport sector for general fiscal aims because excise duties and general sales tax and other road-related taxes will still remain fiscal taxes.

5. A proposed Dedicated Road Fund will play an important role by ensuring that the tax monies collected as road user charges are indeed spent on road conservation and provision. The whole issue of a Dedicated Road Fund is an intricate issue and needs careful investigation in practice before it can be implemented.

6. A further implication of the proposed system is that local authorities will be reimbursed for the marginal costs of urban road provision. The payments will replace the current subsidies and will be made from the income derived from the application of road user charges. The same principles will in future apply to the Namibian Police as far as the cost of traffic control is concerned. This approach represents an improvement on the previous system of subsidies as firstly, all traffic related expenditure are covered and secondly, the payment is related to the actual use made of the roads. Under the previous subsidy system, the less the local authorities spent, the less they received (or conversely the more they spent, the more they received), irrespective of the use made of the road system.

An analysis of this Namibian Road User Charging System will follow in the next sections of this Position Paper.




It has to be clearly understood that the Namibian Road User Charging System should rather follow economic and not so much fiscal principles. The using of any rural or urban road must be regarded as a consumption of a road and the charging for this consumption should be rather regarded as a price and not as a tax. Road consumption should fall in the same category as water or electricity prices. In devising the Namibian Road User Charging System the following three major principles were observed:

# The User Pay Principle: The road user charges should be set that road users as a group pay the full costs of providing rural roads and conserving both, rural roads and urban streets ( Full recovery of all costs);

# The Equity Principle: The road user charges should be set that no cross-subsidisation between different user categories should take place;

# The Efficiency Principle: The road user charges should be set to promote efficient utilisation of resources (levelling the playing field between different modes of surface transport: optimum use of the rail/road systems).




In order to obtain an effective and efficient Road User Charging System the system had to be designed to be non-discriminatory, simple, bold, equitable and transparent. Basically this means that the most efficient way of charging road users is to include rates into the fuel price [15] and to ask license fees. The charging mechanism of fuel levies should be used for road conservation and the license fees for fixed and capital road costs. Capital road costs can also be regarded as "long term marginal costs". Thus there exists an overlapping "grey area" between fuel levies and license fees which allows a measure of flexibility between the two charging instruments.

Tolls are much less efficient. Direct charging by a private company might not be well received by the road users. Many research efforts have proved that charging tolls are only feasible on roads with an average traffic volume of more than 2 000 vehicle units per day. There are very few roads in Namibia which reach these traffic loads. With less traffic, the revenue is too low to justify the high fixed and administrative costs of a toll road system. In some cases the revenues collected were less than the toll collecting costs. The system is also open to various forms of corruption. It is desirable that a toll road always requires a parallel running "free" road. This is not viable under Namibian infrastructural and traffic circumstances. Therefore it was decided not to consider such a system for Namibia.




For more than five years the Namibian Ministry of Works, Transport and Communication has done research on the topic of correct and efficient road user charging. It would be too pretentious to review the whole path of engineering analysis we have followed but we developed a road user charging system which is based on engineering arguments and not on guesswork. The system resulted in a concept of marginal cost pricing (the damage inflicted by various vehicle categories and axle loads on different road pavements) via the fuel levy and of fixed cost pricing via vehicle license fees. Additionally there must be made provision in the system for the extra charging of heavy vehicles. But, it should also be fully understood that the balance point between marginal costs and fixed costs should not be too rigid because as it was stated above, capital road costs can also be regarded as "long term marginal costs". Thus there exists an overlapping "grey area" between fuel levies and license fees which allows a measure of flexibility between the two charging instruments.

In summary the Namibian Road User Charging System entails the following pricing components:

# Traffic-Related Costs (marginal costs as function of marginal damage by vehicles to pavements have to be paid by fuel levies and weight-distance charges (for heavy vehicles) as well as transit charges).

# Non-Traffic Related Costs ( traffic signs, maintenance of drainage structures, cleaning of road reserve etc. and capital costs for the provision of new roads) have to be paid by license fees with some flexibility between the two charging instruments as far as capital costs are concerned.

Many options do exist how to balance the traffic-related costs and the non-traffic related costs in the New Road User Charging System. There is a cost responsibility for different vehicle categories (depending on different axle loads) for different pavement types and different traffic loads which had to be devised into the Namibian Road User Charging System. This led to different road conservation cost levels for different pavements and different traffic loads (economy of scale). WHAT HAS TO BE PRICED BY ROAD USER CHARGES


The central question here is what exactly is the road user charge meant to finance? It was already spelled out that the Namibian Road User Charging System makes provision to finance the traffic-related costs by fuel levies and weight-distance/transit fees and the non-traffic related costs by license fees. Furthermore it is intended that the whole proclaimed Namibian road network has to be included into the system, even if this means that a certain degree of cross-subsidisation between highly-trafficked paved roads and low-volume unpaved roads in rural areas is taking place. [16] The "non-cross- subsidisation principle" cannot be fully applied, out of practical necessity (to make the system simple: prices have to be averaged) under Namibian conditions. We should therefore not differentiate between " viable" and "non-viable" roads ( non-viable roads could be roads with a traffic load of less than 50 vehicle units per day, depending on road materials, climate, pavement types etc.). THE COST LEVEL FOR ROAD USER CHARGING


The spending level for the conservation of a road network and the provision of new roads is a function of the in-depth knowledge of the entire road system characteristics and optimised, appropriate conservation levels for different pavements. This concept is based on a good, computerised road inventory and optimised "Road Management Systems" for both: paved and unpaved roads which will be dealt with in section of this Position Paper.

As a rule of thumb it can be assumed that approximately 2,5 to 3,5 % of the total replacement value is annually required for the conservation of a road network. For Namibian conditions this would amount to approximately N$ 200 million per year. If the spending level is calculated via an idealised, balanced road budget for road conservation ( traffic-related and non-traffic related costs) and capital costs, the figure rises to N$ 225 million. Another important input variable is the calculation of the approximate quantity of fuel consumed over the entire road network. All these different cost variables were balanced in order to achieve an optimised cost level for the Namibian Road User Charging System [17].

But, it must be emphasised that in the past heavy vehicles have not paid their fair share for road conservation and were cross-subsidised by other road user categories. CHARGES FOR LIGHT AND HEAVY VEHICLES


All vehicles are causing a certain amount of damage to the roads they use. The whole system of the Namibian Road User Charging System for the conservation of the road network is designed to compensate for the marginal damage caused by vehicles to road pavements. The marginal damage caused also bears a clear relationship to the mass of vehicles. Under normal circumstances, heavy vehicles, together with the effects of penetrating water into the layerworks of a road, are the principal causes for road deteriorations. Basically heavy vehicles are causing much more damage to pavement layers through the deformation of the layers than light vehicles. Therefore, the Namibian system was devised on the principle that it would not be fair to charge all road users a uniform rate.

The new system makes therefore provision for an additional charging instrument in addition to fuel levies and license fees: the weight-distance charge for heavy vehicles. Without such an additional charging instrument it is not possible to equitably charge different vehicle categories because the damage inflicted on road pavements is increasing much more steeply [18] with its mass (weight) than its fuel consumption. TRANSPARENCY OF USER CHARGES


In order to have a transparent Road User Charging System the composition of the fuel price should be designed that fuel levies as road user charges are clearly differentiated from fiscal fuel taxes which the Minister of Finance might charge.




An existing road is considered economically viable when the costs of conservation are smaller than the combined user savings resulting from travelling over a road with a good riding quality in comparison with a road with a weak riding quality. On this basis the optimal points of (1) grading an earth or gravel road, (2) of gravelling an earth road or (3) paving an unpaved road can be found and should be incorporated into the optimised road conservation system.

Cost and quality optimised road models compare the future flow of benefits of a facility with the initial cost of construction as a basis. Therefore it is necessary to consider the time value of money. This is done by discounting the future costs and benefits to a present value ( Present Worth 'PW' of the Costs and the Present Worth of the Future Benefits) by using the discount rate or the opportunity cost of capital (OCC). For investments OCC is assumed to be an average of the short-term and long-term rates of interests. When the effect of public investment in highways is considered, the interest rate must reflect the return on investment in the national economy. Such cost/quality optimised models are assisting the establishment of the Net Present Worth (NPW) for gravel-surfacing and bitumen-surfacing of roads which are based on real cost-optimised justifications and not on guess-work. The NPW of a given investment is obtained by subtracting the present worth of the costs from the present worth of the future benefits. The benefits as well as the costs are discounted at the OCC interest rate. The investment or the conservation measure is feasible if the NPW is positive. On the basis of this cost and quality optimising philosophy the optimised conservation levels have to be developed [19].

It has again to be emphasised that road conservation is one of the activities to pay for itself with the clear understanding "who is paying for it" and "why". URBAN STREETS


Except arterial through roads which should be regarded as rural thoroughfares, the provision of urban streets should be financed by municipal taxes and not by vehicle license fees. Marginal costs for the conservation of urban streets is fully incorporated into the Namibian Road User Charging System and is covered through fuel levies. But, some specific urban conservation activities like parking places should be financed from other funds. SOURCES OF FINANCING ROAD NETWORKS


The conservation and provision of road networks should be financed from road user charges and via a Dedicated Road Fund. Bank loans to fully or partially finance road conservation should be seriously questioned. When considering the using of bank loans for totally or partially financing road conservation we have to differ between current variable (marginal) costs ( traffic related variable costs and traffic related fixed costs) and capital (investment) costs.

If the funding is not sufficient the following could be the causes:

# The Road User Charge is too low;

# The Road User Charge is sufficient, but the collected charges are allocated to non-road-related activities;

# The existing traffic loads do not justify the standard of the present road network;

# The Road Authority is not efficient;

# The volume of new road investments is too large and leaves no room for adequate and appropriate road conservation.

The Namibian Road User Charging System is making provision to avoid above problems but other problem areas have to be addressed in the next sections of this Position Paper.

If "soft" loans are considered it has also to be differentiated whether institutional reform to upgrade road management is absent or implemented. In the absence of institutional reform "soft" loans may have the following advantages [20]:

# Soft loans can allow to apply more road conservation, which is undoubtedly better than no road conservation at all due to a lack of funds;

# Soft loans may, to some extent, lead to a change in the orientation of the Department of Transport: Directorate of Roads, placing more emphasis on road conservation;

# Road conservation is economically highly feasible because the Internal Rates of Return are high. They can be as high as 50 to 100% because for every spent US $ on road conservation you can achieve as much as 2 to 3 US $ in road user savings (vehicle operating costs).

On the other hand, negotiating " soft" loans as the normal way of financing road conservation has the following disadvantages:

# Soft loans can be an easy way out of an unsustainable situation, since the input of "new" funds into the system can cover up the institutional shortcomings and the deficient financing of road networks;

# Soft loans can be contrary to the principle of transparency;

# Soft loans can reduce the pressure which is needed to initiate badly needed institutional change.

If, one the other hand institutional change is implemented, then "soft" loans can be especially usefully applied in the following cases:

# Soft loans should be used to implement and speed up institutional reform in order to promote effectivity and efficiency, including the clear definition of the role of both, the public and the private sectors;

# Helping to restructure the spending on roads and shifting the emphasis from the provision of new roads to the conservation of existing roads.

But, it has to be observed that continually resorting to "soft" loans for road conservation is tantamount to transferring the costs of bad management to future generations well knowing that the new generations will in all possibility not receive the full benefits of these loans. All these points had to be observed in designing an optimised Namibian Road User Charging System and the implementation of institutional change in order to optimise road management.




In the previous sections of this Position Paper it was outlined that Virus 1 can only be overcome by an efficient and equitable Namibian Road User Charging System on the principle of the full cost recovery for all road-related costs on the basis of the " User-Pay Rationale". This system will lead to Financial Autonomy.

It was repeatedly outlined that an optimised road conservation and provision system can only be safeguarded by an efficient road management system. It was also summarised that an optimised Road User Charging System can only efficiently work when the problem of efficiency in the road management is solved simultaneously. Otherwise, if the degree of inefficiency is kept at the present level or even increases, imposing a Road User Charging System would mean a penalty for the road users. Simply, changing the form of financing, that is replacing general tax revenues with a road user charge, is neither a solution in itself nor an incentive for better efficiency in road management. Therefore, the next sections of this paper will concentrate on the optimised management of road networks in Namibia.






Road institutions in most developing and even developed countries are normally not autonomous. In many cases road agencies have the following major administrative features:

# Road agencies propose measures and policies, but they have no power of decision: The final decision rests with Government;

# Road agencies are subjected to exhaustive and restrictive financial and administrative regulations (red tape);

# Road agencies receive their financial resources from the Government, which assigns these resources to specific tasks;

# Accounts and votes for the use of financial resources are allocated, but not explicitly for the condition of the road network or for the value of the road assets.

The current institutions in most countries are not necessarily ineffective but grossly inefficient. This is also the case with the Roads Directorate within the Department of Transport of the Ministry of Works, Transport and Communication in Namibia. BASIC CAUSES OF INEFFICIENCY IN NAMIBIA


The basic cause for inefficiency of road management within the Namibian Ministry of Works, Transport and Communication can at best be described by identifying the motives absent in the ministerial environment [21]:

There is no fear, as is the case in private companies, of losing an investment made. The employees of the Department of Transport do not own the roads of the country nor is their income generated through the returns on capital invested in roads. A employee's well being is not threatened by inefficient management of the Namibian road network. Given the relatively low level of salaries of technicians and engineers, there is little material or financial incentive for the improvement of performances. In contrast to the low salaries paid to technicians and engineers in the government sector, government employed workers and labourers, however, are paid substantially more than in the private sector. In addition, senior officials in the public services are not very demanding with their subordinates, for a whole range of reasons which will be outlined below, and, given the job security, the latter are not afraid of losing their jobs or incomes. In many instances workers tend to sidetrack management. The lack of production incentives coupled with appropriate remuneration packages is a major problem But there are other constraints like rules and regulations of the "Public Service Commission", the "Ministry of Finance" and the "Namibian Tender Board" to be mentioned as well. All these constraints are difficult to address in a public sector environment whereas the lack of qualified staff could still be remedied in theory.

The reasons for this situation must be seen within the framework of the understandable and justifiable Government objectives [22]:

# Correcting historical imbalances;

# Achieve wage compression;

# Raise unskilled and semi-skilled workers living standards.

The following mechanism is used in order to achieve these objectives:

# Raising remuneration for bottom grades:

# "Freezing" salaries at the top level.

The result of this mechanism is the following:

# Professional engineering and technical staff is earning significantly less than market rates;

# Un-skilled and semi-skilled workers are earning comparable and more than market related wages;

# Un-skilled and semi-skilled workers have greater benefits than comparable private sector staff;

# Un-skilled and semi-skilled workers enjoy a high degree of protection.

The drain of skilled professional engineering and technical as well as managerial staff results in increased inefficiency and low productivity.

Inefficiency in the road management sector is therefore inter alia caused by a lack of technical managerial personnel to take responsibility for the proper management of the Namibian road network and the costing system in the various regional and district offices. The management and costing system is based on only two key factors: conscientious production management as well as monitoring and accounting procedures. This means that increased efforts must be made to create an environment within the framework of the Department of Transport in which proper accountability for the expenditure of funds and for results achieved with the funds can be maintained. The specific problem areas which were identified within the Namibian Ministry of Works, Transport and Communication: Department of Transport will be outlined in the next sections of this Position Paper. MANAGERIAL CONSTRAINTS


The Department of Transport of the Namibian Ministry of Works, Transport and Communication still has a strong and dedicated top management, but a crisis exists at middle and lower management levels. The result is that top managers have to perform duties which are the responsibility of the middle management. Furthermore, many of the technical top management team lack proper administrative and secretarial support and are consequently pre-occupied with administrative work. DISCIPLINE AND COMMITMENT


The most serious problem facing efficient road management issues is the lack of commitment and discipline on side of many of the Ministry´s employees up to the lower management cadres. It can be concluded that there is still a substantial support for the top and middle management of the Department of Transport, but this is in danger of being quickly lost unless discipline and a sense of commitment is not enforced fairly but firmly. This danger entails that the former extent of voluntary cooperation has shrunk noticeably. Especially it has to be emphasised that the Department of Transport should have the power to act firmly against certain obnoxious employees, also as far as the evil of absenteeism [23] is concerned. Fair but firm disciplinary measures must be upheld if commitment and accountability are to be improved. LACK OF AUTHORITY


In the face of serious problems regarding insufficient discipline and commitment and by virtue of the fact of being given the responsibility for achieving certain quality and productivity objectives, the top and middle class managers of the Department of Transport should be afforded the necessary authority to enable them to achieve these objectives. Many of the management constraints have to be attributed to the fact that, especially middle management cadres are not able to enforce discipline and accountability among their subordinates. The management cadres in the Ministry are severely hampered in this respect by having to obtain approval - often accompanied by tremendous bureaucratic delays and from the highest levels of State - for actions which are critical to successful management of road conservation. ACCOUNTABILITY


There is also a serious need to make staff in the Department of Transport aware of the necessity to account for the way in which public monies entrusted to them are being spent and what is being achieved for it.

Concerted efforts by the Department of Transport's top management have uncovered numerous examples of failure to properly check plant and vehicles returns and invoices for correctness. Some of these are:

# Road construction or maintenance equipment are being paid for 9 hours a day, mostly doing much less and often even without a day's work;

# Unserviceable and unnecessary equipment are being paid for standing around uselessly;

# Equipment being paid for is not even allocated to the region or district in question;

# Vehicle returns are being submitted to the Government Garage of the Ministry of Works, Transport and Communication [24] which, if unchecked, would have resulted in excessive hire charges to the Maintenance Division of the Department of Transport;

# Costs of several million Namibia $ are being incurred on the regravelling of unpaved roads, without the Department of Transport having the proper management resources in the regional and district offices to ensure proper quality control of the materials used and quality of work achieved.

Above problems should already have been intercepted at middle management level. The need for extensive control at the Head Office of the Department of Transport is now placing an unacceptable additional burden on the top management level. WEAK FINANCIAL AND MANAGEMENT SKILLS


The remuneration of middle class managers like roads superintendents is inappropriately rated. This makes it very difficult to attract personnel to these posts with the necessary qualifications for the responsibilities expected of them, particularly regarding financial skills. The result is that many inexperienced and untrained middle class managers do not have the necessary expertise to be able to use a road conservation costing system for enhancing efficient road management. In the contrary, due to the shortage of clerical staff in the district and regional offices middle class managers are additionally burdened with administrative field work unrelated to their technical managerial function. The gravity of this situation becomes apparent if one considers that each district office is entrusted with the efficient spending of public funds in the order of millions of Namibia Dollar. These offices are also inadequately staffed with engineers to exercise efficient technical, managerial and financial control. DEFICIENT SUPERVISION OF FIELD UNITS


The problems sketched above are all adding to the poor work performance of road conservation field units. There is not only the general lack of discipline and commitment but also a general shortcoming in the technical, managerial and financial supervision of many of the field units of the Department of Transport. The deficient supervision can mainly be attributed to above mentioned problem areas and applies particularly to "single-operator units" such as "Bitumen Maintenance Units" for the routine conservation of paved roads [25] and "Grader Units" for the conservation of unpaved roads. Especially the "Bitumen Maintenance Units" are not giving the required standard of quality and the expected output of production any more.

The "single-operator units" are mostly left to their own devices with highly unsatisfactory control over their work programme, work achievement and plant reporting and costing. Judging by the poor quality, and often non-submission of plant returns most operators seem to be largely incapable of performing this task or are even unwilling due to a lack of discipline and commitment. This problem is aggravated by an apparently increasing portion of totally or partially illiterate operators. EQUIPMENT-RELATED PROBLEMS


In part, problems with the production reporting by "single-operator units" must be attributed to the very common problem of defective engine hour meters and odometers. Also, motor graders have no electronic or mechanical devices to record driver hours which makes it virtually impossible for grader units to properly report production. Another grave problem is the persisting " equipment unserviceability" problem with the resulting long standing times of equipment and the excessive unproductive works output.

Based on work sampling at 20 units, including "single operator units" like Grader Units, Bitumen Maintenance Units and Light Maintenance Units the following observations were made [26]:

# Units were operational at 44% of all times;

# Units were not operational for 56% of all times (12,5% due to mechanical breakdowns: some units stood idle due to breakdowns for extended times, up to two weeks; 6% due to travelling; 37,5% standing idle for unspecified reasons);

# Units running weeks behind schedules;

# Units stopping work as early as 3 pm;

# Units are standing idle while the "operator in command" is sick and are not used for other activities;

# Workers are standing/sitting idle for over 20 minutes during a number of observations;

# Efficiency problems are experienced due to incorrect equipment being supplied. CONCLUSION: BASIC CAUSES OF INEFFICIENCY


After having analysed all these problems it can also be concluded that the above sketched scenarios cannot be overcome under a " public service environment". A new package of efficiency improvements in the road management sector has to be designed to overcome the problems which were represented. The consequence of the reorganisation of the Namibian road sector will be an in-depth institutional change of the Department of Transport as far as road conservation and provision is concerned. But, it has also to be observed that no miracles can be expected by a process of Institutional Reform because the same pool of manpower has to do the job.




The reorganisation of the Namibian road sector consists mainly of the redistribution of the three fundamental tasks related to roads:

# The planning and management of the road network;

# The physical execution of road works;

# The safeguarding of public functions. MANAGEMENT OF THE NAMIBIAN ROAD NETWORK


The management of a road network is a planning, optimising and prioritising task in an engineering sense with relation to technical standards and to economics (costs). The following parameters have to be observed:

# Prioritising of physical road works;

# What types of works are required at the prioritised locations and how should the work be executed;

# The time frame of the physical works.

The success and failure of road network management is measured against target parameters. They are normally related to the desired condition of the network. The management tasks can be listed as follows [27]:

# The planning which consists of identifying and programming physical works;

# The execution and supervision of physical works with relevant quality and production controls;

# The constant evaluation of the results of the management system, in order to adapt methods and techniques to changing needs and to learn from errors made.

It must be emphasised that road network management is a highly specialised engineering activity that requires highly trained professionals.

For any informed decision on policies or activities related with the management of roads two elements of information are necessary:

# An inventory of the roads in a network, including their basic engineering parameters, especially their materials specifications. This may be a computerised list of roads between specific nodes with an emphasis on technically homogenous road sections;

# A description of the present condition of each road or road section, determined through visual-sensitive methods to evaluate the whole network.

This information is the basic input to calculate the value of the Namibian road system. The following steps are used to analyse the road asset value:

# Step 1: Identification of the types of roads existing in the country;

# Step 2: Analysis of the construction costs for each type of road;

# Step 3: Analysis of resurfacing, rehabilitation and reconstruction costs for each type of road;

# Step 4: Preparation of the computerised databank;

# Step 5: Data input into the databank;

# Step 6: Interpretation of the results;

# Step 7: Publication of the results and their interpretation in order to create optimised priorities.

When the road system of a country is in a bad shape it is obvious that the road management system is deficient. Under such circumstances, the road network asset value analysis shows a result which is below the minimum permissible value. The question arises what should be the optimised asset value of a road network? It is clear from the outset that an optimised road asset value cannot mean that all road sections have to be simultaneously in a very good condition. This would not only be unrealistic in reality but would also mean an uneconomic waste of public funds because road conservation would be done sooner than in actual fact required. The optimised point of time for road conservation measures should be calculated on the basis of a total road asset value balanced somewhere in the region of the mid-point benchmark between the maximum theoretical value and the minimum permissible value. On the basis of the mid-point benchmark the Namibian Road Management System should be designed.

Further arguments for a Namibian Road Management System are the following:

# Performing road conservation on condition-based rather than time-based road conservation;

# Implementing preventative rather than corrective road conservation;

# Conducting road conservation work on a programmed basis;

# The Road Management System has to go hand in hand with optimised institutional reform as outlined below;

# Compatibility has to be existent between the Road Management System, the Traffic Counting System, financial accounting system, stores, plant register and the costing system.

Building on these basic input data and their analysis the Namibian Road Management System was developed for paved and unpaved roads. PAVED ROADS


In order to overcome the road management problems the importance of cost-efficient road conservation has to be emphasised. With adequate road conservation the road pavement life can be maximised, and the vehicle operating costs can be minimised. Independent Namibia has to learn from negative lessons in other African countries where road conservation has been in many cases grossly neglected or given a low priority with the result of continuously deteriorating road networks. The basis for optimised road conservation for paved roads will be a Road Pavement Management System (PMS) which must contain the following data and decision-influencing facts [28]:

# Establishing priorities for conservation including rehabilitation and reconstruction in selected areas, based on criteria set by the management of the Department of Transport;

# Obtaining feedback relative to pavement performance for input into pavement design, construction and road conservation activities;

# Applying life-cycle cost analysis when reviewing alternatives;

# Considering major design parameters like foundation strength, number of projected E80 axle loads, materials specifications, climate and others.

The Namibian "PMS"- system for paved roads is basically in place with a backlog in data capturing due to a serious shortage of professional and technical staff. UNPAVED ROADS


It must to be outlined that gravel and earth roads still play an overwhelming transport role not only in Namibia but in the whole developing world, but somehow research on these roads is very neglected. Namibia has maybe the best appropriate roads network in Africa and is regarded as a world leader in the construction and maintenance of gravel and earth roads. The cost and quality optimised research on gravel and earth roads has to be systematised and deepened. The following research topics are currently under discussion:

# Evaluation and data capture of Namibian gravel and earth roads;

# Central computer data bank for Namibian gravel and earth road network;

# Optimised road maintenance algorithm for gravel and earth roads.

A current joint-research project between the Ministry of Works, Transport and Communication of Namibia, the University of Namibia and the "Technische Universität Berlin" comprises of a quality and cost-optimised maintenance and upgrading system for appropriate roads in developing countries with a special emphasis on gravel and earth roads. This research programme is a healthy basis for a sound road conservation system for unpaved roads: Namibia has to learn from negative lessons in other African countries and can make her experience, based on the research project, available to other developing countries in Africa.

The major objectives of such a research scheme can be outlined as follows:

# If a sound cost and quality optimised road conservation system is not in hand the result will be a continuously deteriorating road network as experienced in so many African countries. Any cost and quality system has two basic parameters of evaluation: economic and performance ratios. The Namibian Ministry of Works, Transport and Communication is world-wide renowned for its research results and expertise on earth, gravel and light bituminous roads.

# Economic evaluation involves the assessment of the economic worth of a project in order to ensure the optimal use of scarce resources. It involves further the quantification of economic benefits and costs, as opposed to financial income and expenditure. Benefits are compared with costs on a marginal basis, i.e. relative to the null (or non-project) alternative. A project is regarded as justified if the benefits exceed the costs, regardless of who pays and who benefits.

# Benefits are normally derived from a reduction in road user costs, reduced road conservation costs on higher standard roads in comparison with weaker pavements, reduced accident and time costs as well as environmental factors in many instances. These performance/cost relations have to be further substantiated for African conditions by further systematic research. In other words it is important to know the exact relationships between cost savings and performance ratios like riding quality of a road in order to establish a quality optimised road conservation model.

# Factors like vehicle operating costs and road conservation costs as well as riding quality relationships [29] were the topics of extensive research in the past by the Ministry of Works, Transport and Communication and the results are available and will form the basis of the Namibian research project. However, effects like corrugations, dust, loose gravel, stoniness, ruts, pot-holes, cracks, skid resistance, surface drainage and the level of compaction will be inter alia further topics of the research project. Currently, for instance, the only value coupled to road performance is roughness and not other values like corrugations, dust etc.

The basic parameters of the proposed research project can be summarised as follows:

I. Performance ratios of earth- and gravel roads: roughness, gravel loss, ruts, corrugation, dust, pot-holes, cracks, stoniness, skid resistance, surface drainage of the road prism;

II. Building of a comprehensive databank to store road performance data;

III. Evaluation and analysis of the performance data;

IV. Optimised Road Conservation Management System for gravel and earth roads on the basis of costs and road performance;

                    V. Optimal points of grading (Figure 1), gravelling and bituminous surfacings                       (Figure2).


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NOTE: PAVED: NEW     = Paved: Conventional:
                       Initial Costs: US $ 138.000/km (IRI = 2,50)
      PAVED: FAV.    = Paved: Favourable geometrical and drainage
                       Initial Costs: US $ 82.500/km (IRI = 2,50)
      PAVED: APPROP. = Paved: Appropriate Low-Cost:
                       Initial Costs: US $ 55.000/km (IRI = 3,00)
      UNPAV.: GOOD   = Unpaved: good
                       Initial Costs: US $ 20.000/km (IRI = 5,00)
      UNPAV.: BAD    = Unpaved: bad
                       Initial Costs: US $ 12.000/km (IRI = 7,50)

The implementation of an "Unsealed Road Management System ( URMS)" with prioritisation of re-gravelling projects as first step entails as a "first sieve" a "Road Condition Survey (RCS)" which consists of a riding quality and a maintainability survey combined with traffic data from the traffic data base to establish optimised re-gravelling candidates. The maintainability condition is more permanent than a riding quality condition and a realistic assessment thereof will pose some problems.

Maintainability is a composite property which is related to the measure of success with which a road can be conserved through normal blading by a grader. Most important are the general quality and thickness of the surfacing material and its suitability for being conserved by a grader, the road shape and riding surface drainage. Problem areas are riding surfaces consisting of very coarse, non-cohesive materials which cannot be conserved properly because any blading effort is soon destroyed by traffic actions, further rocky outcrops and large stones and lastly deep sandy roads beneath the natural surface which are virtually non-maintainable by blading. EXECUTION OF ROAD CONSERVATION WORKS


The physical execution of road conservation works is controlled through the road network management system. There is not very much room for decision making because the road works have to be executed in accordance with stringent technical specifications. Part of the decision making process is to strike a balance between the private sector and the State. Another component in the decision making process is the use of labour-based construction and conservation techniques. SAFEGUARDING OF PUBLIC FUNCTIONS


One of the fundamental tasks of the State is to safeguard the public interests. Public interests in the existing road network can be summed up as follows [32]:

# Roads should be used in an appropriate, orderly and safe fashion;

# There must be an efficient road network management system including an adequate and optimised road conservation system in place;

# There must be an adequate funding system to finance appropriate road conservation;

# The negative effects of roads and road traffic on the environment should be minimised.

Some of the public functions, like law making, policy devising, the formulation of regulations and the safeguarding of public safety should be the function of the State. Other functions should be the responsibility of the private sector.

As for the modified road network, public interests can be summed up as follows [33]:

# The need for the construction of new roads or the improvement of existing roads must be identified with precision;

# The negative effects of new road infrastructure on the environment should be taken into account;

# Optimised and cost-effective financing has to be in place for new road projects or rehabilitation road projects after they have been proved to be viable;

# The physical execution of works must be on a sound footing.

Basically it can be concluded from the foregoing that the State has to limit its size and direct influence to those areas where its presence is indispensable. The State should not deliver services which the private sector can deliver more efficiently. The State should minimise areas like the provision of services and goods or the regulation of their prices.

The consequence of this postulate is the institutional reform of the Namibian Ministry of Works, Transport and Communication ( MWTC2000) with the in-depth analysis to reform divisions like the Government Garage, the Heavy Plant Division, Airports, Aviation Services and the Directorate of Roads (provision and conservation of roads). At the beginning of this Position Paper it was stated that road consumption should be regarded as a price which has to be paid fully by the different user categories. Road management should thus not be part of a "state subsidised sector" but rather a self-financing sector. To achieve this objective it was necessary to obtain greater public participation in government decision-making by creating an organisational framework and the necessary mechanisms to bring forward the ideas and opinions of the road user public and the road user industry by the statutory Transport Advisory Board. Once the institutional reform of "MWTC2000" has been concluded the Government assumes the role of a "catalytic agent" in the transport sector.

The effectiveness and efficiency of a system is the result of a set of very specific conditions. What are the specific conditions for effective and efficient Road Network Management? What type of environment is conducive to effectiveness and efficiency? How can public interest be defended and respected in a Road Network Management? The next sections of this Position Paper will answer these questions [34].




What type of characteristics and attitudes should prevail in a future Road Network Management? In the above section it was established that the Government and the Ministry of Works, Transport and Communication is ill-equipped to fulfil the role of effective and efficient Road Network Management with the result of a deteriorating road network in Namibia. This " ministerial way of doing things" is simply not working.

Namibia has initiated the creation of a new " Road Authority" to implement the future optimised Road Network Management. This establishment will be realised within the framework of the new "MWTC2000"-concept. A transitional period of 5 years has been envisaged. In order to meet the objectives of effectivity and efficiency the future Road Network Management System has to meet the following targets which will be dealt with in the next sections of this Position Paper. POLITICAL INFLUENCES ON ROAD MANAGEMENT


The future Road Network Management System will be ruled by professional arguments. Political criteria will only be taken into consideration when designing the general objectives of the new system and the establishing of the legal framework. Once the system is operational the political influences of the Ministry of Works, Transport and Communication will be limited to a general responsibility for the effective and efficient functioning of the system and for eventual modifications in response to changing needs. Road Network Management will not be subject to short-term political influences, especially with respect to the following parameters: 

# The determination of a sound balance between road conservation and road provision as    well as the cost and quality optimised road provision projects to be undertaken;

          # The optimised road conservation programme. ACCOUNTABILITY AND TRANSPARENCY


Accountability has the following main objectives: All road provision and road conservation projects have to be cost and quality optimised based on above guidelines. The following criteria have to be met:

# Physical road conditions: minimum conditions must always be achieved;

# Optimised level of expenditure on the existing road network.

Accountability is only possible in a transparent environment and transparency is based on a well defined and applied Road Management Information System ( Pavement Management System (PMS)) for paved roads and Unsealed Road Management System (URMS) for unpaved roads. INCENTIVES AND SANCTIONS


An effective and efficient Road Network Management System is only possible through good professional and technical performance by the human resources used in the new system. We have established earlier that this is not possible under ministerial " public service conditions". The following incentives and sanctions have to be applied by the new system:

# An attractive and competitive remuneration package including appropriate medical aid, pension system etc.;

# Fair and equitable possibilities of advancement in promotion and social prestige in the new system based on performance and not " seniority";

# Appropriate modern equipment and pleasant working conditions;

# The enforcement of discipline and accountability. COOPERATION BETWEEN PUBLIC AND PRIVATE SECTOR


A redistribution of responsibilities between the different players in the new Road Network Management System is required. This will result in a revised public-private partnership. These changes will affect the following bodies in the public and private sector:

# Various divisions in the Ministry of Works, Transport and Communication like the Heavy Plant Division (to be reformed by institutional change); the Government Garage (to be reformed by institutional change); the Road Authority to execute Road Network Management (newly to be established), the various policy formulating, planning and legal bodies in the Ministry (to remain in the Ministry);

# The statutory National Roads Board (to be created) to supervise, regulate, standardise and prioritise the activities of the Road Authority;

# Various private Road Management Companies (to be established);

# Civil engineering construction companies (existing);

# Contractors specialising in road conservation (to be established);

# Consultants (existing);

# Investor groups (existing).

The well-functioning of the "new order" Road Authority will depend on the high degree of cooperation and communication between the different players in the road network management field. RISKS INVOLVED IN THE NEW ORDER


The following risks have to be identified and minimised in the design of the "new order" Road Network Management System:

# Monopoly function of the Road Network Management System may not be exploited;

# Incomes [35] have to be restricted to the essentials and only on the basis of an optimised system of road conservation and provision;

# Technical standards have to be met.

Various protection mechanisms have to be designed in order to avoid and minimise above risk areas in the technical and legal framework of the new Road Network Management System.




The following alternatives for a "new order" Road Network Management System have to be investigated in depth for the Namibian "MWTC2000" solution:

# National Road Management Authority (Model 1)

# National Road Management Corporation (Model 2)

# Road Management Contracts (negotiable and fixed periods)(Model 3)

# Road Management Contracts (negotiable and indefinite periods)(Model 4)

# Temporary Concessions (negotiable)(Model 5)

# Permanent Concessions (negotiable)(Model 6)

          # Privatisation of Road Infrastructure (Model 7) NATIONAL ROAD MANAGEMENT AUTHORITY


The main characteristic of Model 1, a National Road Management Authority is to manage the road network and to execute all physical works related to road conservation and road provision. These functions are transferred from the Ministry of Works, Transport and Communication by a newly established " National Road Management Authority Act" to the new Roads Authority. The Roads Authority also has to take the responsibility of the safeguarding of public interests and some of the public functions. The "National Road Management Authority Act" has to make provision to minimise the effects of a natural monopoly and to guard against the maximising of profits. The state-owned National Road Management Authority has to carry out all physical road works with some own work forces [36] and equipment or contract it out to private companies. The authority should be designed on the lines of the " Namibia Ports Authority".

Strict delineation of business activities from those belonging to the State is one of the most important parameters of this model. Supervisory and prioritising functions of the Roads Authority can be entrusted to a statutory " National Roads Board" which should act independently from the Ministry of Works, Transport and Communication. The Roads Authority alternative does not imply increased decentralisation. But it can be very suitable for a country like Namibia with a huge road infrastructure for a relatively small population. It allows a certain degree of privatisation because of greater flexibility in contracting certain road conservation and provision tasks to the private sector. The legislation should ensure to protect the Roads Authority from the pressures of short-term policies. This model will have the following advantages and disadvantages [37]:


# The responsibility for Road Network Management is transferred from the ministerial environment to a company environment;

# The Road Authority is not a purely commercial object. Rather it can be mandated to perform a quasi-public role and to provide and ensure the provision of cost-effective services for optimised road user charges to promote optimum usage of Namibian roads in the interest of Namibian road users;

# Given this role as a quasi-public body, the Road Authority can be entrusted with performing certain functions for the State, such as the provision of safeguarding public interests and some safety functions;

# This model gives more flexibility to adapt to changing situations;

# Private accounting and management instruments can be used to enhance efficiency;

# Makes dealing with private contractors more flexible;

# Allows for flexible personnel and remuneration policies in order to improve efficiency;

# May have the effect of reducing the direct interference of short-term political interests;

# Facilitates the changing of the financial system from a tax-based to a road-user-charge-based system.


# A state-owned National Road Management Authority would form a "natural monopoly" [38] which has not to compete against anyone, thus the effectivity and efficiency deficiency problems in the "public sector" might not be satisfactorily solved;

# Undue political influences by political forces and lobby groups to pressurise the Roads Authority cannot be excluded. Therefore, in order to minimise political influences, the supervising "Namibian National Road Board" should be autonomous and should represent the Road Users fairly. NATIONAL ROAD MANAGEMENT CORPORATION


Model 2, a National Road Management Corporation is legally and technically structured very similar to that of the National Road Management Authority except for the fact that a state-owned corporation cannot by law fulfil any public functions like an authority. The relationship between the State and the state-owned corporation should be strictly on financial terms. In the case of a corporation it will not be possible by legislation to minimise the effects of a natural monopoly and to guard against the maximising of profits. Any non-commercial demands like strategic or social considerations can be regulated by a Performance Contract or should be paid by the State as Public Service Obligation (PSO). An example to a corporation could be " Telecom Namibia Limited".

The strict delineation of business activities from those belonging to the State is for the corporation model even more pronounced than for the authority model. The safeguarding of public functions should remain in the hands of the Ministry of Works, Transport and Communication or partly designated to the statutory " Namibian National Roads Board". ROAD MANAGEMENT CONTRACTS (FIXED TERM)


The main characteristics of Model 3, a Road Management Company (Fixed Terms) is that by means of Road Management Contracts, the State transfers the responsibility for road management and the physical conservation works to one or other private company by a system of public bidding (asking public tenders by the Namibian Tender Board). Physical works can be executed either directly by the Road Management Company and/or subcontracted to other relevant construction or management companies.

The duration of the contract period should be limited and clearly defined in the contract document but should preferably not be less than ten to fifteen years. At termination of the contract all contract responsibilities return to the Ministry of Works, Transport and Communication who can ask for new tenders for a renewed road management contract. The Ministry keeps at all times the responsibility to safeguard the public interests in the road system and other related public functions. Payments to the Road Management Companies should be done through a Dedicated Road Fund through established mechanisms. The control and supervision of the Road Management Companies can be established through a "National Roads Board". This model will have the following advantages and disadvantages [39]:


# All the advantages as outlined in as well as the following:

# Implementation would most probably remove interference of short-term political interests in road management;

# Promotes competition and deregulation as parameter of Namibian transport policy (White Paper on Transport Policy) [40];

# Financial losses will most probably be attributed to poor managerial performance. This will be a strong incentive to perform in an optimised way;

# The contract can be cancelled quickly if the Company or the Companies are not fulfilling their contractual obligations;

# Private sector managerial mechanisms which are inherent to this model can help to avoid a paralysis in road conservation under circumstances which need quick corrective action to avoid serious road deterioration;

# Creates new business opportunities and development as well as new employment.


# There is the risk involved that the Company or the Companies will do only "cosmetic" work on the road network if the contract nears termination. This is an important factor due to the fact that the " Namibian National Roads Board" will in all probability not have the controlling human resources due to the critical shortage of engineering and technical staff in Namibia.

# Fraudulent bankruptcy is a remote possibility but can be avoided by the strict enforcement of a system of bank guarantees and sureties which, in any case, is in force for all contracts within the Ministry of Works, Transport and Communication. ROAD MANAGEMENT CONTRACTS (INDEFINITE)


Model 4, a Road Management Company (Indefinite) is similar to that discussed above but has no time limitation. The Ministry of Works, Transport and Communication asks tenders for the entire road network or sections of it by a system of public bidding. The consequence of this model is a straight privatisation of the Namibian road network as far as the conservation of the system is concerned whereby it has to be observed that the privatised entities have to be competitive. The tender price for this alternative might be higher than for alternative but in any case lower than the replacement costs of the road system or parts of it. This model would mean a significant revenue for the Namibian State Revenue Fund. As in the other models, the Government remains responsible for the safeguarding of public interests in roads and other related public functions which will be still administered through the Ministry of Works, Transport and Communication. If the owners of the Road Management Company or Companies are in breach of contract in a serious way by not fulfilling their obligations, the contract might be cancelled without compensation. The contract will normally maintain its financial market value as long as the road network remains in an optimised fashion in accordance with the contractual stipulations.

The control and supervision of the Road Management Companies can be established through a "National Namibian Roads Board". This model will have the following advantages and disadvantages [41]:


# All the advantages of models 1 to 3, and also:

# Introduces a strong incentive to the owners of the company or companies to keep the road system in a permanent optimal condition;

# Avoids last minute "cosmetic" works due to the permanent character of the contract;

# This model generates considerable revenue to the Government;

# Provides attractive, safe and long-term Namibian capital investment opportunities suitable for institutional investors such as pension funds, life insurance companies etc.;

# May eventually open an avenue to participate the people as share holders in such a public utility company.


# Given that Model 4 contracts will be rather sold at considerable high prices, this Model can only realised in countries with a functioning capital market or with access to foreign capital markets. This should be no problem under Namibian circumstances and is therefore a realistic alternative for Namibia. TEMPORARY CONCESSIONS


Model 5 provides for temporary concessions. A temporary concession is a variation on Model 3 ( Road Management Company (Fixed Terms)), whose specific characteristics is that the concessionaire directly charges road user charges by means of tolls. It was already analysed earlier in this Position Paper that tolls are not suitable for Namibian conditions. It was established that direct charging by a private company may not be well received by road users, that the charging mechanism for tolls is expensive and not an efficient charging system and open to corruption and toll alternatives cannot be a solution for roads with medium to low traffic numbers, roads which form the overwhelming majority of roads in Namibia. Therefore Model 5 is not appropriate for Namibian conditions. PERMANENT CONCESSIONS


Model 6 provides for permanent concessions. This alternative is similar to Model 5, with the difference that no time limit is placed on the concessions. Therefore it can be concluded that Model 6 is also not appropriate for Namibian conditions. PRIVATISATION OF ROAD INFRASTRUCTURE


Model 7 entails the sale of the total or part road network of Namibia by public tender. The sold road network becomes the property of the successful bidder with all the resulting technical, economic and legal consequences. Sales transactions have to be subject to conditions to keep roads permanently open in an appropriate and optimal conservation fashion and the guarantee that user rates are set according to clearly defined formulas and mechanisms.

This model option could be used in cases where alternative routes are available which is normally never the case in Namibia. Therefore it has to be doubted whether Model 7 is a feasible alternative for Namibia.




Within the framework of analysis for MWTC2000 and in anticipation of Institutional Reform to create a new Roads Conservation Body the following actions were initiated during 1995/96:

# The backlog in the resealing of paved roads in Namibia is increasing every year, and so does the backlog in rehabilitation, due to a consistent shortage of funds. Supplementary alternatives to the provision of a higher level of funding as well as the implementation of the new Namibian Road User Charging System as from 1996 will improve the situation.

# In contradiction to the ever increasing population and traffic volumes, the volumes of gravelling or regravelling of unpaved roads had to be reduced substantially due to financial restrictions. The investment in road gravel thicknesses is as such slowly wearing away to a point where a significant impetus would be necessitated to maintain the existing road level of service to the Namibian road user which includes the very important tourism sector. The implementation of the new Namibian Road User Charging System in 1996 will also bring relief here [42][43].

# In anticipation of the implementation of MWTC2000 and in pursuance of the objective to become more efficient and cost-effective the Department of Transport has started to do some road conservation work under private contract. The rationale behind this was to further test the capacity and cost-effectiveness of the Namibian private sector. The following privatised road conservation tasks were tackled:

# Approximately 105 km of bush clearing in the Okavango Region was done in 1994/95, by using labour-based technologies, at a total cost of N$ 108.130. This was found to be much cheaper than the departmental costs.

# The gravelling of the 22 km distance between Onesi and Epalela in the Omusati Region at a cost of N$ 2,2 million was also about 25% cheaper than similar departmental works in the North.

# Four grader units on contract were furthermore employed throughout Namibia during 1993 as a pilot project at a saving of 12% when compared with departmental costs. Ten private grader contracts are presently running and the indications are that they are also more cost-effective than departmental grader units.

# Five grass cutting and bush clearing contracts over 148 km of paved roads were recently commenced (N$ 800.000) with very positive results between Otavi and Tsumeb and in other northern areas.

# In the light of the grass cutting success a civil engineering consultant has now been appointed to investigate the viability to embark on the entire scope of the conservation of paved roads under private contract.

# The Ministry of Works, Transport and Communication is furthermore utilising the services of private gravel cartage contractors for many years. The cost-effectiveness of gravel hauling could, however, be improved as illustrated by re-gravelling contracts, where tenderers are not restricted to one truck per tenderer only.

The first experiences with commercialisation and privatisation of road conservation activities within the framework of MWTC2000 are encouraging and are proving the cost-effectiveness and increased efficiency brought in by Institutional Reform.

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