Over the past 10 plus years the national rail services operator, TransNamib, has incurred losses of more than N$1 billion but these financial misfortunes may soon be turned around as relatively new CEO, Johny Smith, aims to bring the parastatal into profitability within the next two years. During its most recent annual general meeting last month, which was the first successful AGM in seven years, unqualified audits confirmed that during the 2019/2020 financial year, TransNamib in fact generated revenue of N$517 million. This represents an 10.5% year-on-year increase in revenue and signifies the company’s best performance for the last 10 years.
“This company is 30 years behind as a business and there has been no proper management, there has been a significant backlog in maintenance and we still have what I call the sins of the past,” said Smith during an exclusive interview with New Era’s Inside Business.
Smith, who took over the reins of the beleaguered state-owned-enterprise in February 2018 after successfully leading the Walvis Bay Corridor Group, noted that during the last two years at the helm, he and his executive team have looked at the various initiatives to implement to turn around TransNamib’s misfortunes, in the short, medium and long-term. “However difficult we also have to focus on the long-term in terms of whatever decisions we have to take about the business,” said Smith.
When asked about TransNamib’s operational challenges, Smith emphasised that 90% of the company’s locomotive fleet are more than 50 years old.
“We have refurbished and refurbished and refurbished, so one thing we can be assured of is that everyday one of these locomotives will break down because the normal lifespan of a locomotive is 25 years. Also, in terms of being able to provide a very reliable service to the customer, this is a big challenge,” said Smith.
Part of TransNamib’s five-year business plan, which is estimated to require an investment of about N$2.5 billion, is the need to remanufacture 33 locomotives. In this regard the company has been working with the Central Procurement Board of Namibia since last year to announce the tender for the remanufactured locomotives. “Hopefully this will happen within the next few months. It has been taking too long in terms of bureaucratic processes which has also delayed the implementation of our business plan. And then we will also put out a tender, hopefully early next year, for 10 brand new locomotives,” Smith said.
The 10 new and the 33 remanufactured locomotives will constitute and investment of about N$1.5 billion, which TransNamib aims to finance through a long-term loan facility. “We are already busy with financial institutions in terms of the loan and talks are progressing very well,” Smith said. Out of the N$2.5 billion required for TransNamib’s five-year business strategy, N$1.5 billion has been earmarked for the locomotives. The remaining N$1 billion is needed for additional equipment and requirements as stipulated in the business plan.
Smith also mentioned a lack of training and development for staff as a major challenge, which he said has not happened for at least seven years before he joined the company. “We have a lot of gaps in terms of filling these requirements so that we can ensure that going forward that we improve our business in totality,” Smith stated.
At the recent AGM, Minister of Public Enterprises, Leon Jooste, who attended the meeting on government’s behalf, congratulated TransNamib’s board, management and employees and reminded them that confidence in the company is key in succeeding. Jooste added that that that during his engagements with TransNamib, as part of his daily duties, he has noticed a new sense of confidence in the company. “We are not out of the woods yet but we are heading there. I am heading out of this meeting as a proud shareholder representative,” said Jooste at the AGM.
2020-03-10 07:48:08 | 4 months ago