Need For More Policy on MDCs

THIS note follows the National Public Information Campaign of the RFA (Road Fund Administration) held at the Windhoek Country Club dated 03 April 2007.

As a well-documented fact, heavy vehicle owners/operators need to contribute their fair share for the consumption of the road network by their vehicles. That so, it is only logical to recoup the costs they incur in road maintenance and rehabilitation.But what are the implications of this to the Government who also have heavy vehicles? Before we continue it is needed to state that Government in this discussion refers to local authorities right through to parliament.Now, MDCs are collected from the users of the road network, who would in all probability use their heavy vehicles for private/commercial use in the pursued of gaining a profit.Government does not provide goods and services for profit gain, but rather as a means to provide defence and security, public transport at affordable levels, and for other economic welfare reasons.If we analyse the budgetary incidence of such a charge (this case MDCs), it is obvious that it would put more pressure on the already less than optimum budgets of Government ministries.This in essence could lead to two possible consequences: one, higher taxes/ticket prices (in light of subsidised public transport services) and two, deteriorating service levels.Now, we specifically turn our attention to the subsidised public transport services provided by local authorities and higher levels of Government.If municipal transport services departments would have to pay for these charges, ticket prices would have to increase (other innovative means of generating income to subsidise these further are very difficult and hard to come up with).The consequence of this could well result in passengers changing to taxi services because a marginal increase in bus fairs may be enough (but not known for certain) to swing their net benefit in the direction of taxi services leaving a higher revenue generating burden on local authorities.The same result could be experienced if the bus transport services would experience a decrease in service quality due to the fact that resources at their disposal could only support operation on fewer routes.Thus, in general the MDCs to be imposed on Government heavy vehicles do not look very rosy from a budget and service quality point of view.Either way, more resources would be needed to provide the same service levels.And furthermore, what is the point in paying to yourself and then taking that again from yourself? This seems to be a waste of resources in following such an approach, resources which needs to spend so desperately elsewhere in the public sector.It is strongly suggested that these charges are only imposed on private/commercial vehicles employed and that are consuming the road network in an effort to gain a profit.Thus, Government heavy vehicles (not used for trade with the view of obtaining a profit) basically only have to be excluded through policy in paying such charges.This issue has to be addressed immediately and policy formulated and implemented to exclude Government heavy vehicle with a mass higher than 3500 kg.John Saunderson Via e-mailThat so, it is only logical to recoup the costs they incur in road maintenance and rehabilitation.But what are the implications of this to the Government who also have heavy vehicles? Before we continue it is needed to state that Government in this discussion refers to local authorities right through to parliament.Now, MDCs are collected from the users of the road network, who would in all probability use their heavy vehicles for private/commercial use in the pursued of gaining a profit.Government does not provide goods and services for profit gain, but rather as a means to provide defence and security, public transport at affordable levels, and for other economic welfare reasons.If we analyse the budgetary incidence of such a charge (this case MDCs), it is obvious that it would put more pressure on the already less than optimum budgets of Government ministries.This in essence could lead to two possible consequences: one, higher taxes/ticket prices (in light of subsidised public transport services) and two, deteriorating service levels.Now, we specifically turn our attention to the subsidised public transport services provided by local authorities and higher levels of Government.If municipal transport services departments would have to pay for these charges, ticket prices would have to increase (other innovative means of generating income to subsidise these further are very difficult and hard to come up with).The consequence of this could well result in passengers changing to taxi services because a marginal increase in bus fairs may be enough (but not known for certain) to swing their net benefit in the direction of taxi services leaving a higher revenue generating burden on local authorities.The same result could be experienced if the bus transport services would experience a decrease in service quality due to the fact that resources at their disposal could only support operation on fewer routes.Thus, in general the MDCs to be imposed on Government heavy vehicles do not look very rosy from a budget and service quality point of view.Either way, more resources would be needed to provide the same service levels.And furthermore, what is the point in paying to yourself and then taking that again from yourself? This seems to be a waste of resources in following such an approach, resources which needs to spend so desperately elsewhere in the public sector.It is strongly suggested that these charges are only imposed on private/commercial vehicles employed and that are consuming the road network in an effort to gain a profit.Thus, Government heavy vehicles (not used for trade with the view of obtaining a profit) basically only have to be excluded through policy in paying such charges.This issue has to be addressed immediately and policy formulated and implemented to exclude Government heavy vehicle with a mass higher than 3500 kg.John Saunderson Via e-mail