By: Justicia Shipena
The Institute for Public Policy Research (IPPR) has demanded that Finance Minister Ipumbu Shiimi release a report by Ernst & Young Namibia (EY) on a TransNamib probe into mismanagement and governance.
The proposal was made by IPPR in its procurement tracker report, which was released on Wednesday and touches on an investigation report that paints a troubling image of management and governance practices at the national rail operator.
“Finance Minister Iipumbu Shiimi should publicly release both the EY report and the TransNamib board and management’s responses to the report, whether in whole or redacted or summarised form,” IPPR said.
IPPR demanded that the Procurement Policy Unit (PPU) investigate procurement anomalies revealed by the EY investigation in order to understand and correct internal procurement processes and practices at the parastatal.
“Aspects of the relationship between TransNamib and Tradeport that have been flagged as ‘prima facie evidence of potential fraud and theft’ should be thoroughly investigated by relevant law enforcement agencies.”
Similarly, IPPR stated that the EY report should serve as the foundation for a National Assembly Public Accounts Committee examination into the issues outlined in the study and the accompanying measures to address these issues.
According to IPPR, the state-owned railway operator has been a perennial governance problem child for the longest time, and a recent report highlights the state’s inability to harness this valuable and strategic national asset appropriately and optimally.
IPPR said concerns about the parastatal’s governance and management practices have grown as a result of the distribution of a leaked report by EY.
The report was created as a result of an independent investigation by EY into claims and perceptions of poor governance and mismanagement at TransNamib, which began in early August 2021.
IPPR said this report was submitted in late February 2022 to then Public Enterprises Minister Leon Jooste, who then forwarded it to Finance Minister Iipumbu Shiimi in March 2022.
“It appears Shiimi then forwarded the report to the TransNamib board for a response at some point in 2022,” it said.
According to IPPR, the TransNamib board, chaired by Theo Mberirua, resolved earlier in the month that it had “found no matters from the report that require disciplinary action” and expressed “full confidence” in the TransNamib management team.
Furthermore, Mberirua was quoted as saying that a full response to the study had been given to Finance Minister Shiimi.
However, according to the Procurement Tracker Namibia, the report surfaces and highlights substantial suspected “procurement irregularities” as part of TransNamib’s identified governance and management inadequacies from 2018/19 to 2020/21.
The procurement issues highlighted in the report primarily concern TransNamib’s contractual relationship with Tradeport Namibia, the Namibian subsidiary of a South African company that exports manganese through the port of Lüderitz, as well as procurement done by the TransNamib property division.
In terms of Tradeport-related procurement issues, the EY report found that TransNamib “appear to have circumvented requirements in terms of the Procurement Act” because, according to the “principal agreement” between the entities, Tradeport was “allowed to procure most of the required services on behalf of TransNamib and as such also managed most of the required Namibian Rail transport services in terms of the said agreements.”
According to the report, the “required services” comprise “the rolling stock (locomotives, waggons, and support staff) to be able to move the bulk of the manganese transported on the Namibian rail network.”
The report notes that “based on the information provided to IPPR by the Executive for Properties, IPPR also did not find sufficient evidence to suggest that she followed prescribed procurement procedures when she procured certain services for maintenance and/or upgrades to certain TransNamib properties.”
“This allegation relates to ‘the installation of a boom gate, renovation and painting of the TransNamib office building’. Expanding more on these issues, with regard to the installation of the boom gate, the report notes that “the third party that was used for the installation of the boom gate at the TransNamib Head Office at a cost of N$30,369 was also required to link the gate to the biometric system used by TransNamib at some stage,” said the report.
The relationship between TransNamib and D&M Rail was another procurement-related issue examined by EY investigators.
However, the report states that “no contracts” were signed between TransNamib and D&M Rail, and that the Ministry of Works and Transport “also indicated that they did not suspect any irregularities in terms of the tender processes followed and/or contracts awarded to D&M Rail, and as such we did not perform any further probes into the allegations of irregularities.”
The EY report expressly mentions the TransNamib/Tradeport arrangement, noting that “the statutory procurement standards as contemplated in the Procurement Act.
The study continues by advocating for additional, more thorough investigations into the TransNamib property department as well as the train parastatal’s partnerships with Tradeport and other businesses.
Significantly, the study states that portions of the relationship with Tradeport “appear to constitute prima facie evidence of potential fraud and theft” and should be probed.
IPPR said the report was given to the Anti-Corruption Commission (ACC), however the ACC declined to investigate based on the findings in October last year.
“Rather advising the Finance Minister to address the issues in the report administratively.”
IPPR stated that it will be interesting to see how the TransNamib board and management respond to the numerous claims of bad governance and mismanagement at the state-owned firm in their comments to the report, which appears to have been submitted to the Finance Minister in March 2023.
