The national rail service operator, which faces the dual challenge of an ageing and deteriorating railway infrastructure and outdated rolling stock, was this week painted as a concerning picture of management and governance practices. This perception is contained in a report by Frederico Links and Graham Hopwood from the Institute for Public Policy Research (IPPR).
Presenting the report on Wednesday, Links stated the state-owned railway operator, TransNamib, further underscores the state’s inability to harness this valuable and strategic national asset appropriately and optimally.
The company has since its inception not made a profit. During the 2010-2017 period alone, the company incurred accumulated losses amounting to over N$4 billion.
“Concerns around the governance and management practices at the parastatal have been heightened following the circulation of a leaked report by auditing and consulting firm Ernst & Young Namibia (EY),” reads the IPPR report for the month of May 2023.
The report was compiled following an independent investigation by EY of allegations and perceptions of poor governance and mismanagement at TransNamib. Once completed, it was submitted to then public enterprises minister Leon Jooste, who subsequently passed it on to finance minister Iipumbu Shiimi.
According to IPPR, the EY report surfaces and spotlights significant alleged procurement irregularities as part of flagged governance and management shortcomings at the rail operator between 2018/19 to 2020/21. The report also found that TransNamib appeared to have bypassed Procurement Act requirements.
This bypass relates to procurement conducted within TransNamib’s contractual relationship with Tradeport Namibia, the Namibian subsidiary of a South African company exporting manganese through the port of Lüderitz, and procurement by TransNamib’s property division.
“As a result of the bypass, Tradeport was allowed to procure most of the required services on behalf of TransNamib – and as such, it also managed most of the required Namibian rail transport services in terms of the said agreements. The required services being referred to include the rolling stock (locomotives, wagons and support staff) to be able to move the bulk of the manganese transported on the Namibian rail network,” the report reads.
Furthermore, IPPR recommended that finance minister Shiimi should publicise the EY report and TransNamib board and management’s responses to the report.
“At the same time, the procurement irregularities surfaced by the EY report should be investigated by the Procurement Policy Unit with a view to understand and remedy internal procurement processes and practices at TransNamib,” IPPR urged.
Links concluded the EY report should form the basis of a National Assembly public accounts committee investigation of the matters raised and the subsequent proposals to deal with these matters.
He also advised that aspects of the relationship between TransNamib and Tradeport, flagged as prima facie evidence of potential fraud and theft, should be thoroughly investigated by relevant law enforcement agencies.
On the other hand, Transnamib has stated a whopping N$30 billion is needed, almost half the national budget, to upgrade the national rail infrastructure to required standards.
“As the owner of the rail infrastructure, the government will need to at least invest N$30 billion into the infrastructure to get it on par with the Southern African Development Community (SADC) requirements. TransNamib, as the rail operator, needs N$2.6 billion to fund its business plan,” stated TransNamib’s spokesperson Abigail Raubenheimer during an earlier interview.
Commenting on the most IPPR report, Raubenheimer said it was merely a duplication of the EY report that Shiimi, the Anti-Corruption Commission (ACC) and Transnamib’s board have pronounced themselves. She remained adamant that TransNamib’s management have been cleared of corruption allegations.
“In terms of ethical research, we would have hoped that an independent body, such as IPPR, would have launched an independent investigation into such allegations and not solely rely on a report completed by another party without any independent verification whatsoever of the allegations contained in such a report. In terms of this process, the IPPR has failed in their mandate to deliver independent and analytical research,” Raubenheimer
asserted. - mndjavera@nepc.com.na