Life line for TransNamib
The Ministry of Works and Transport has given TransNamib a life line by availing the N$400m that the parastatal desperately need to turn around its fortunes.
This was revealed by TransNamib’s Board of Directors Chairperson, Dr Pieter Oosthuizen at the occasion of TransNamib’s 180 day turn-around plan last week.
Dr Oosthuizen said the economy cannot do without TransNamib and said it is against this background that the Minister of Works and Transport, Erkki Nghimtina tasked the new board to turn around TransNamib from its current ineffective and lossmaking state into a self-sustaining entity that would deliver the transport services to the country.
“This turnaround plan was presented to our Minister and we obtained his full support as illustrated by the fact that he made available N$400m to TransNamib. After 180 days TransNamib will be self-sustaining and even show a profit. The team will then embark on Phase 2 of transforming TransNamib into an efficient and well-functioning State Enterprise,” he said.
He added that, “The 12 month plan will consist of upgrading the actual railway lines to SADC. At the same time the team will also embark on Phase 3 which is 36 month plan to update TransNamib old and redundant technology. Most of the technology and equipment are 50 to 60 years old this is an extensive capital exercise and it will therefore be spread over three years.”
TransNamib’s Chief Executive Officer, Sara Naanda said over the past three months, the Board and Executive have been working very closely together to craft a sustainable future for TransNamib.
“We are united in our view of the way forward. The Executive Management Team intends to provide its full support and cooperation to ensure that the strategic objects of the Board are successfully implemented and strongly believes that the 180 day turn-around plan will be to the benefit of TransNamib, our stakeholders, and the country at large,” she said.
Naanda said it is a well-known fact that over the years, TransNamib operated below its anticipated levels of efficiency. She said that the well documented challenges lead to declining revenue levels, escalating operating costs, diminishing market share and consequently financial losses.
“The state affairs adversely affected the liquidity position of the Company, which resulted in additional capital outlay from time to time from the shareholders in order to sustain the operations of TransNamib. This situation was obviously not sustainable and prompted the Board of Directors and Management to develop a business 180 day turn-around plan,” she said.
She added that, “We strongly believe that that this plan will become a success, as we have the necessary commitment from Management and unwavering support from the Board of Directors of TransNamib and Shareholder. We would like to reiterate that the Board and Management will work closely as a team to ensure a success story.”
Dantago Jimmy-Melani a member of Board of Directors said they cannot blame the public for being skeptical as promises have been made numerous years and nothing has been forthcoming.
“I would like to request you to bear with us and to give us a fighting chance to prove that we will enact change and that things will become better. I think there are already signs that we mean business-and not just the Board, but government as well. This Board has managed to-in a very short time-familiarise itself with the TransNamib business model enough to come up with the turnaround strategy-as requested by the Minister,” she said.
For the past five years TransNamib’s revenue is down by 14%, cost of sales is up by 6% and operating expenses are also up by 7%. “We have not been profitable for the last four consecutive years, with losses increasing year on year. The new Board has been tasked by the Minister to use its diverse skill base in order to improve the current financial performance of TransNamib. We are fully committed to this mandate,” said Jimmy-Melani.
Jimmy-Melani then said there are three areas they need to work on in the short-term-to ensure that they generate income for the Company. Which are the revival of general electric locomotives, the improvement of human capacity and operational structure, and addressing the operational short-falls, while aiming to reduce long standing debt.