TransNamib has leased a total of four locomotives from South Africa (SA) in to increase capacity.
The national rail service operator confirmed the arrangement to New Era, explaining that it forms part of its short to medium-term strategy.
According to TransNamib’s spokesperson Abigail Raubenheimer, the first leased locomotive arrived in Namibia in September, with the remaining three expected to arrive during October.
The total cost of the lease agreement could not be confirmed to the media as yet.
“We have been quite transparent in terms of our challenges with outdated rolling stock. Some of our locomotives are over 50 years old, while the lifespan of a locomotive is 25 years. We have done as much as we can and pushed as much as possible with the current rolling stock but in order to reach our plan of becoming a profitable company, we need rolling stock that is reliable and safe; hence, the acquisition of the leased locomotives is a strategic decision for TransNamib to be able to increase its capacity immediately,” Raubenheimer explained.
She added the company is working on improving its capacity in the long-term, with the remanufacturing of 33 locomotives.
This project is, however, currently awaiting confirmation of funding from the parastatal’s business plan.
Meanwhile, the locomotives will be leased from SA for a period of eight months.
Within this time, TransNamib anticipates the remanufacturing process to have started so that when the lease ends, the company will have the capacity to move more freight with more reliable locomotives.
TransNamib currently has about 25 locomotives that are actively operational.
Raubenheimer noted that in order to operate the business efficiently, they need about 75 locomotives, comprising 50 mainline locomotives and 25 shunting locomotives.
“Our current operational fleet of 25 is being used for both mainline and shunting activities. TransNamib needs to significantly increase its capacity in order to achieve our strategic business plan,” she explained.
Furthermore, the spokesperson stated that with the leased locomotives, TransNamib hopes to see a significant increase in revenue generation within the next few months.
This, she added, will be boosted with the refurbishment of the 33 locomotives that will allow TransNamib to invest more in its rolling stock.
Raubenheimer emphasied TransNamib needs to increase capacity immediately to be able to meet the requirements from their shareholder in terms of transforming the company’s financial future.
“Our current rolling stock is being utilised to its full capacity but we can only do so much with it. While we are waiting on the process of the refurbishment of the locomotives to be finalised, we still need to operate and increase our capacities and efficiencies. The leased locomotives will provide immediate relief to our business and propel us forward towards our vision,” Raubenheimer stated.
During a live social media discussion last month, TransNamib CEO Johny Smith said the company had more than 150 meetings with potential funders and only one is still hanging in there. Smith lamented that everybody else ran away after they saw the company financials.
“As part of getting TransNamib sustainable, there are activities that needs to be implemented. We need to get more locomotive capacity. There is also a need for certain upgrades for facilities and railway lines – and all this forms part of the business plan,” said the CEO.
Earlier this year, Smith said in efforts to bring TransNamib back on track to profitability, the company needs N$2.6 billion for their five-year business plan and to reach breakeven by 2023.
In divulging the company’s medium and long-term strategies, Smith explained the focus is to build a sustainable rail operator, successful road-to-rail strategy, and upgrade the rail network to SADC standards.
However, he stated, these strategies are currently futile due to the lack of required finances.
According to the Smith, the company faces numerous challenges such as poor public perception, low locomotive capacity, external procurement processes, short-term cash flow, poor infrastructure development, operational efficiency and a maintenance backlog.