Banks turn their backs on TransNamib
29 September 2021 | Transport
Commercial banks are refusing to loan money to rail operator TransNamib because of its legacy debt issues, CEO Johny Smith has said.
Smith described TransNamib’s cashflow situation as dire during a recent interview on Namibian Sun’s Evening Review show.
“We most probably had 150 meetings with banks but nobody wants to fund TransNamib because of the legacy debt issues,” he said.
“Nobody really wants to assist us to the extent that we require funding because of the historical debt issues that TransNamib has over a period of time.”
Smith also touched on the planned retrenchments at the company, saying consultations were still ongoing.
“Retrenchment is the wrong terminology to be used here. There is a process we are looking at; a voluntary process with staff. We are just at the first stage thereof; what I can also state is that this is in line with the business plan that was approved in 2018,” he said.
He had previously said the company needed approximately N$2 billion to carry out its restructuring over the next five years.
Committed to transformation
“In terms of our Integrated Strategic Business Plan (ISBP), we need a capital injection of about N$2 billion. In terms of our ISBP, we need to break even by 2023, and we are focusing all our resources towards realising that goal. We are committed to transforming TransNamib,” he was previously quoted as saying.
Smith also reflected on the company’s derailments and said insufficient funding was not helping the situation.
“There is a combination of three factors and these derailments are not new. Derailments have been happening on an annual basis. The company hasn’t been spending sufficient amount of money on its safety, that is one of the biggest concerns,” he said.
At least 195 accidents have been reported by TransNamib in the last five years, causing the deaths of 12 people.