Heavily indebted state owned TransNamib is adamant the new deal with TransNet South Africa will to improve its rolling stock and bottom line.
TransNamib admits the engagement with the South African partner will provide Namibia with enough technical support, skills transfer and supply of rolling stock-railway equipment.
According to the Company’s Executive Assistant Isai Haikela who spoke on behalf of the CEO, “There are not going to be any financial obligations between the two parties.”
This deal comes months after TransNamib’s last audited books showed that the company’s is at 86% of total assets and close to bankruptcy.
In real terms, the high debt ratio means the company now owns only about 14% of their total assets and remaining 86% becomes debt and liabilities.
With such a financial set up, there have been calls that the parastatal needs to engage more with other players in the continent and also seek constant engagement with NamPort if chances of changing its financial fortunes would bear fruit soon.
Trans Namib in its last budgetary pledge to Government said they need N$2,138b to improve its balance sheet and improve on its operations including acquisition of state of the art locomotives and rolling stock.
A detailed breakdown of the company’s financial needs show that Trans Namib needed N$ 1,041b for the financial year 2013/2014, N$ 598m for the 2014/2015 financial year and N$455m for the 2015/2016 financial year.
TransNamib has been receiving a grant of N$1 million per annum for rehabilitation and maintenance of its railway network but research has shown that the railway parastatal actually needs N$3-5 million to rehabilitate or upgrade a mere 1-km of railway line.
“We certainly are looking forward to the TransNet deal lifting up the business spirits,” said Haikela.