TransNamib buys new vehicles amid financial woes

TRANSNAMIB has defended its decision to buy eight brand new vehicles after the company has been unable to fulfil its obligation towards its medical aid and water costs.

TransNamib spokesperson Abigail Raubenheimer on Friday confirmed that the company has bought the vehicles, but said the order was made months ago.

“The order for these vehicles was placed nine months ago. To emphasise, TransNamib has made it publicly clear that the company has massive cash-flow challenges,” she said.

Sources close to the matter said the vehicles arrived at the company’s headquarters in the capital two Fridays ago.

The company has failed to keep up with medical aid contributions, water supply at its head office has been cut off. Refuse has also not been collected.

TransNamib’s water supply was suspended two weeks ago due to its N$8-million debt, while it has allegedly failed to pay employees’ medical aid contributions for the past three months.

The company spends between N$3 million and N$4 million on medical aid per month for roughly 700 employees.

According to a source at the municipality, rubbish removal services were suspended early in July.

The company has allegedly failed to meet a settlement obligation of N$3,5 million.

“The remedy to the cash-flow challenge is to increase the company’s revenue,” Raubenheimer said.

Last August, the former board chairperson of TransNamib, Lionel Matthews, said the company is operating at a loss of more than N$10 million per month.

Budget books show that the government is planning to give the national railway operator only N$50 million in the next financial year.

The last financial statement the railway operator has published was for the 2020/21 financial year.

In this report, former TransNamib head Johny Smith said the option of relief funding from the government through the then Ministry of Public Enterprises was followed through, but was not successful.

“Although various measures have been put in place to increase revenue and reduce cost, we continually find ourselves in a position where the current cash flows cannot provide in all the immediate needs of the company, and therefore it has a serious impact on the reliability of services we need to provide to our customers,” Smith said in the 2020/21 report.

On Friday, Raubenheimer said: “Given TransNamib’s transparency regarding the company’s equipment challenges, it should be evident that investment into equipment is long overdue.”

She went on to say that their operations have been severely impacted by a lack of vehicles.

“The acquisition of this equipment is for the sole purpose of increasing our operational capacity to push our revenue so that we may see light at the end of the tunnel in terms of generating enough revenue to meet our expenses,” she said.

Raubenheimer was unable to shed light on TransNamib’s current financial position.

“Last year’s audited financial results are to be presented to our shareholder first, and then shared publicly,” she said.

In the 2020/21 annual report, the company’s then board chairperson Sigrid Tjijorokisa said the pandemic has had a severe impact on the movement of freight by rail, and in effect resulted in a major reduction of the company’s revenue.

“There has, however, been a slight increase in the revenue for our property portfolio during the past financial year, despite various challenges from property tenants,” the report reads.

Tjijorokisa said the reduction in freight volumes and revenue has therefore put further restrictions on the company’s cash flow required to provide the basis for growing it in the short to medium term.

“Some financial support from our shareholder has assisted TransNamib to ensure that the company’s operations continue and we keep on running trains to serve the transport and logistics sector,” the report reads

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