Acting public enterprises minister Iipumbu Shiimi has debunked rumours of TransNamib’s liquidation, maintaining the state-owned railway firm is a crucial entity in the country’s logistics hub and will not be liquidated.
“I would like to emphasise that there is no truth in the allegations as portrayed in the media that TransNamib is to be liquidated,” Shiimi told lawmakers in the National Assembly last week.
“The state maintains the view that TransNamib is a strategic entity in the country’s logistics hub aspirations and will do everything in its power to strengthen TransNamib, to ensure that it delivers on its mandate in a cost-effective manner.”
The company has been hogging the headlines recently, mostly for the wrong reasons.
Following the demise of Air Namibia last year, there has been widespread speculation that TransNamib will take the same path.
In March, TransNamib received a letter of demand from now defunct Belgian company, Challenge Air, to pay more than N$160 million (9.863 million euros) for a botched lease agreement with Air Namibia in 1998. However, TransNamib said it was not part of the initial lease agreement.
The company has recorded almost 200 accidents in the last four years, leading to the deaths of 12 people.
Former public enterprises minister Leon Jooste instituted an investigation into the affairs of the company.
The country’s largest trade union federation, the National Union of Namibian Workers (NUNW), threatened a nationwide protest over what it termed as malpractices at TransNamib.
However, Shiimi assured parliamentarians, saying the railway firm’s main area of business remains vital in providing and promoting transport services in Namibia and as per the national development objectives.
He said Namibia has rail infrastructure with a total length of 2 687 km across the country.
“The State is the owner of this rail infrastructure while TransNamib is the sole operator. Namibia’s rail infrastructure is connected to South Africa, with opportunities to further extend the railway line and connect to other countries in the SADC region,” he explained, adding that government deems TransNamib to be the appropriate vehicle for Namibia to serve as the logistics hub, connecting the broader SADC region.
He said in 2019, the public enterprise’s ministry approved the TransNamib Integrated Strategic Business Plan 2018/19- 2023/24, which rebranded TransNamib in terms of its corporate mandate and structure to become more effective and efficient.
Accordingly, he said the government as the sole shareholder of TransNamib, has always believed in supporting the mandate of TransNamib, in line with the logistics hub aspirations of the country. However, more than 50% of TransNamib’s railway lines do not meet the minimum Southern African Development Community (SADC) stipulated standard of 18.5 tons/axle load and locomotives are about 60 years old.
“Despite the economic headwinds, a constrained fiscal environment as well as the challenges posed by the Covid-19 pandemic, the government has remained steadfast in its support for TransNamib to ensure its continued operation and financial sustainability,” he said.
Shiimi said over the past few years, the government has provided strong governance and oversight as evidenced in the appointment of competent boards of directors.
“Government has approved the Integrated Strategic Business Plan of TransNamib in 2019, which was the first ISBP approved by the ministry,” he said.
“Government has provided budget support of about N$90 million to TransNamib in the past two years to enable the entity to, among others, improve its fleet of locomotives and increase operational efficiencies,” he added.
Similarly, Shiimi said the government also made a capital injection of N$150 million into TransNamib to acquire 100% shareholding in the Swakopmund Hotel & Entertainment Centre.
“Government has written off N$410 million of debt owed by TransNamib to improve the company’s balance sheet, and provided the required assistance as a shareholder to enable TransNamib to secure a loan of more than N$2.5 billion from the Development Bank of Namibia (DBN) and the Development Bank of Southern Africa (DBSA),” he said, adding that this was evident that government is supporting the railway company.