By: Justicia Shipena
Acting public enterprises and finance minister Iipumbu Shiimi has denied allegations that TransNamib is to be liquidated.
Shiimi said this comment in the National Assembly on Thursday, stating that the state entity is a strategic entity in the country’s logistics hub aspirations.
This comes after, last month, lawyers of the Belgian company, ChallengeAir, represented by Anicet Baum, had threatened to push TransNamib into liquidation should the state entity not settle its debt.
“There is no truth in the allegations as portrayed in the media. TransNamib will do everything in its power to strengthen and ensure that it delivers on its mandate cost-effectively,” said Shiimi.
He added that TransNamib is a commercial public enterprise, and its main area of business remains vital in providing and promoting transport services in Namibia.
“Namibia has rail infrastructure with a total length of 2 687 km across the country. The state owns this rail infrastructure, while TransNamib is the sole operator,” he said.
He stressed that the government deems TransNamib the appropriate vehicle for Namibia to serve as the logistics hub connecting the broader Southern African Development Community (SADC) region.
“Namibia’s rail infrastructure is connected to South Africa, with opportunities to further extend the railway line and connect to other countries in the SADC Region.”
Shiimi added that in 2019, the public enterprises ministry approved the TransNamib Integrated Strategic Business Plan 2018/19- 2023/24.
This plan, according to him, rebranded TransNamib in terms of its corporate mandate and structure to become more effective and efficient.
“Government as the 100 per cent shareholder of TransNamib, has always believed in supporting the mandate of TransNamib, in line with the logistics hub aspirations of the country.”
Shiimi further said despite the economic headwinds, a constrained fiscal environment, and the challenges posed by the Covid-19 government, have remained steadfast in its support for TransNamib to ensure its continued operation and financial sustainability.
“Over the past few years specifically, the government has provided strong governance and oversight as evidenced in the appointment of competent boards of directors,” he added.
He further said the government had provided budget support of about N$90 million to TransNamib in the past two years. Adding that this enabled the state entity to improve its fleet of locomotives and increase operational efficiencies.
“Government made a capital injection of N$150 million into TransNamib to acquire 100 per cent shareholding in the Swakopmund Hotel & Entertainment Centre,” he said.
Shiimi also said the government had written off N$410 million of debt owed by TransNamib.
“To improve the company’s balance sheet. The government also provided the required assistance as a shareholder to enable TransNamib to secure a loan of more than N$2.5 billion from the Development Bank of Namibia (DBN) and the Development Bank of Southern Africa (DBSA).”
DEMANDS FROM CHALLENGEAIR
In a demand letter issued via Sisa Namandje &Co.Inc, dated March, ChallengeAir gave TransNamib 15 days to settle the EUR 9 863 053.04 bill.
“This letter accordingly serves as a demand of payment of the total outstanding amount currently standing at EUR 9 863 053.04 within 15 days of receipt of this letter of demand, failing to be unable to pay your debts. We will proceed with an application in the High Court seeking TransNamib’s liquidation,” it reads.
In 2011 and 2015, courts in France and Germany ruled in favour of ChallengeAir against TransNamib and Air Namibia after failing to pay the N$400 million to Challenge Air.
The debt comes from March 1998 when Air Namibia, still under TransNamib, leased a 351-passenger Boeing 767-300 from the now-defunct ChallengeAir.
Air Namibia cancelled the lease agreement, saying the aircraft had problems. Although ChallengeAir liquidated, the debt did not.
However, the government refused to pay, and in 2018, ChallengeAir threatened to attach TransNamib and Air Namibia assets to settle the N$400m debt.
Namandje had given the government ten days to negotiate, or ChallengeAir would proceed with the attachment action.
The transport minister John Mutorwa said they would defend the case, while some government officials felt it was not suitable to use taxpayers’ money to settle the debt.
In December 2019, Air Namibia agreed to pay after acknowledging owing ChallengeAir N$333 million. According to that agreement, Air Namibia was supposed to have finished paying by September 2020.
According to ChallengeAir, the awards have not been settled by TransNamib thus said, it is clear that TransNamib is unable to pay its debts.
The legal representative added Baum is the sole receiver recognised in the High Court.
“In arbitration proceedings between our client, Air Namibia Limited and TransNamib Holdings Ltd, a partial final award on liability was made on 6 August 2018 and the final award on quantum.”
Hence, it said the regional court of Munich, Germany’s order was made against Air Namibia and TransNamib on 12 January 2015.
“Despite the awards having been brought to the knowledge of Air Namibia (now in liquidation) and TransNamib, the awards had not been satisfied to this date as our client only received partial payments from Air Namibia before its liquidation,” it stated.
Speaking to The Villager in March, the public relations officer of TransNamib, Abigail Raubenheimer, confirmed the state entity had received the letter.
However, Raubenheimer had said the entity was not party to any settlement agreement with Air Namibia and ChallengeAir in 2019 regarding the arbitration award.
In this vein, she had indicated that TransNamib is also consulting its legal team.
“TransNamib is consulting its legal representative on the appropriate action to defend this letter of demand.”
At the same time, The Villager also reached out to transport minister John Mutorwa, who refused to comment. Mutorwa, along with former SOE minister Leon Jooste, was CC’d in the letter.