Government should not put the burden of unfeasible infrastructure projects on state owned enterprises without having them separately subsidised by treasury, Public Enterprises minister, Leon Jooste has said.
The minister was giving a key note speech recently at a function that was organised by the Economic Association of Namibia which interrogated he status quo within the SOEs space.
The minister defined these nice-to-have initiatives as rather political projects, mooted by government and due process followed without consultation with an entity.
“Public enterprises are there to honour government projects, not all of them but many if not most of them. But what do we do when government takes a decision to embark on a particular project which is not commercially feasible? What we worry about, from the ministry is that when we decide to embark on one of these infrastructure projects and the project is procured within central government, (I should not have used the word I put in here) but at least the word dump, then dumped onto a public enterprise. So they inherit a project which they where not part of evaluating the feasibility, the costing, the scope, any of the processes of the project.”
“So having said that we are a developing economy and we need to keep our momentum in developing infrastructure etcetera, what we would want is, when one of these projects is put under the authority of a public enterprise and it’s not a feasible one, then we would love to see that subsidized separately. Otherwise we are going to compromise a particular entity,” said the minister.
Jooste gave TransNamib as an example, and went on to shoot down any move to have the entity shoulder a government rail project that connects Windhoek with Hosea Kutako International airport, Rehoboth and Okahandja.
Jooste praised the project as meaningful in offloading pressure from the country’s roads but questioned its feasibility.
“Government would love to put in, you have read about that, some passenger train between Windhoek and Hosea Kutako airport and Windhoek-Rehoboth and Windhoek Okahandja. Those are not feasible.”
“Politically it’s a good project to alleviate our congestion on the roads, accidents whatever, from all angles it’s a nice project. That’s not our high priority one but a nice project. But we can’t demand that for TransNamib to carry that commercial burden. I would want for treasury to subsidise that until it becomes eventually feasible and they can take over,” said the minister.