In efforts to bring TransNamib back on track to profitability, CEO Johny Smith, yesterday at a stakeholder engagement said the company needs N$2.6 billion for their five-year business plan to reach break even by 2023. In stating the company’s medium and long-term strategies, Smith explained the focus is to build a sustainable rail operator, successful road to rail strategy, develop public private partnerships for commuter rail lines, upgrade rail network to SADC standards, develop rail lines to Botswana and Zambia and complete upgrading of the country’s railway network worth N$15 billion.
Smith added that the current financial year for TransNamib was tough due to the impact of Covid-19 on operations as well as the impact of reduced economic activity.
He continued that the company faces challenges such as poor public perception, low locomotive capacity, external procurement processes, short-term cash flow, infrastructure development, operational efficiency and a maintenance backlog.
As part of their five-year business plan, TransNamib commenced with restructuring its balance sheet, recreating business identity and streamlining the organisation to focus on its core business.
Smith also stated that the aim is to enter into rail transport agreements and to pursue aggressive business development and asset management.
Also, TransNamib is updating its technology and encouraging innovation projects to support business operations in a long-term.
Also at Tuesday’s stakeholder engagement, works and transport deputy minister, Veikko Nekundi said it is the ministry’s obligation and responsibility to avail a conducive environment for TransNamib to smoothen their operations. Nekundi said railway infrastructure development remains the key mandate where significant funds are to be invested. He further urged stakeholders to have an understanding of equal responsibilities and have a common goal of driving the industry to greater heights.
Moreover, TransNamib’s Finance Executive, Cornwell Chadya explained the company is currently not generating enough income, adding there is a need to raise internal equity to service their business plan debt if they are to execute it efficiently.
“Cash flow should be positive to enable us to borrow funds for our business plan. We need to sign long-term contracts to service our long-term debts, as this is what the banking sector needs,” explained Chadya.