TransNamib gets N$2.5bn
14 October 2019 | Transport
Smith says the aim is to make TransNamib profitable within two years and to double its revenue, which currently stands at half a billion per year.
The second strategic objective is to increase freight movement from about 1.5 million tonnes to 3 million tonnes - which means doubling the current eight daily trains.
According to Smith the main challenges holding back the state-owned entity are a lack of locomotives and a poor cash flow which is not enough to sustain the business.
Smith says by the fifth year of the business plan they will require 86 locomotives in order to carry the envisaged three million tonnes of freight.
“We leased 17 locomotives from TransNet but we decided to give them back because of the way the contract was signed,” he says.
The company has managed to reduce its operational losses from an average of N$25 million to less than N$10 million per month.
According to Smith, the slow public procurement process is a big headache. TransNamib's procurement of locomotives has been held up for seven months by the Central Procurement Board, he added.
“It is not moving at all. I have even written them a letter last week. There is communication but there are just delays and most of the time they do not explain why, which makes it very difficult.”
TransNamib, which has had its fair share of financial and management troubles, is currently managing an asset base of more than N$3 billion but most of the assets have not been maintained and need attention, he adds.
Smith also said the parastatal has a major deficit in progressive, young professionals, although there are many skilled employees.
“We have to find a path to transfer those skills to the young people but then also there must be a transformation for technology and innovation. That is why we have created a portfolio for innovation and also introduced a project that helps us to relook at the way we do business and how to improve the processes,” he said.
Smith also expressed disappointment at the “rumour-mongering” culture that has taken root in the company over the years.
“For seven years there was no internal communication, no one sent out information to the staff.
“It was unbelievable, for seven years no one communicated and everyone made up their own stories.
“Most of them came in for maybe five to ten minutes and some did not even show up for a week. And you would think the supervisor would check up on them? No, the supervisors also do the same,” he said.