Despite the national rail service provider TransNamib being in a challenging financial position due to its short-term cashflow position and limited rolling stock capacity, government deemed it unnecessary to allocate a single penny for the 2023/24 financial year.
To add insult to injury, the embattled railway carrier announced that its CEO has quit.
According to the 2023-2026 estimate report from the finance ministry, TransNamib was allocated nothing for the financial year under review, before getting N$50 million for the 2024/25 financial year. In an effort to bring TransNamib back on track to profitability, the company said it needed N$2.6 billion for a five-year business plan, which was launched in 2018.
This would hopefully allow it to reach break-even by the end of 2023. After four years of running around to source funding, the national rail operator in March 2022 announced that it finally secured a long-term loan of N$2.6 billion to implement its five-year business plan.
This plan is to enable TransNamib to get back on track to profitability, and plug its bleeding balance-sheet while stabilising revenue.
The State-owned rail operator managed to secure a long-term loan from the Development Bank of Southern Africa, in partnership with the Development Bank of Namibia.
The loan is to be used for the remanufacturing of rolling stock, acquisition of new rolling stock, modernisation of the TransNamib workshop as well as the upgrading of signalling equipment, including spare parts and associated equipment.
When asked on how the non-allocation will affect the company’s operations, TransNamib’s spokesperson Abigail Raubenheimer said while government has made substantial investments in rail since independence, TransNamib continues to advocate for the further development of rail to bring the country on par with SADC requirements, as well as positioning them as a crucial inter-connector in the transport industry. “Rail has a critical role to play in positioning Namibia as a key logistics hub, but this will require further development and investment, which TransNamib will continue to campaign for,” she noted.
Divorce
Raubenheimer yesterday broke the news that effective from 31 March 2023, TransNamib CEO Johny Smith is leaving the organisation.
“While offered another five-year extension by the TransNamib board, Smith has decided to pursue other opportunities,” said the
spokesperson.
In a statement, board chairperson Theo Mberirua noted: “We are thankful to Smith for his dedication to the task of transforming TransNamib over the past five years. During his tenure and during a very challenging period for all organisations in Namibia and globally, Smith managed to achieve key highlights”.
Some of the key highlights from Smith is that in its 2019/2020 financial year, TransNamib recorded historic revenue growth with a 10.5% increase in freight revenue in more than a decade, giving a promising start to TransNamib’s Integrated Business Plan (ISBP) to transform the company into a sustainable organisation adding value to the Namibian economy.
He managed to pull the first unqualified audit in more than 10 years as well as an AGM for seven years in 2020 to clear historical financials. He also sourced N$2.6 billion
funding from DBSA/DBN.
Smith, on his part said, “while it has not been an easy decision, I am confident that TransNamib is better-poised to become a sustainable organisation. The staff is led by both a committed board and a very solid senior management team, whom I would like to extend thanks to for their support over my tenure”.
Raubenheimer added that the board will be announcing the way forward for the company in line with Smith’s exit.