N$400m bailout for TransNamib

A CABINET committee has recommended that the government bails out the financially crippled railway parastatal TransNamib with over N$400 million as a short-term measure.

The proposal from a combined Cabinet committee of trade and treasury proposed several sweeping changes to the affairs of TransNamib.

Public enterprises minister Leon Jooste confirmed that a Cabinet committee made a proposal to inject money into TransNamib, while a long-term turn-around strategy is being finalised.

Jooste declined to provide the exact figure of the bailout, describing it as “big money” but The Namibian understands that the figure is around N$400 million.

Budget documents show that beside the N$400 million that the parastatal will get, TransNamib already got N$300 million from the State.

All in all, calculations show that TransNamib will get around N$1 billion from this year to 2017 in government subsidies.

“I’m having sleepless nights about this. We need to find a solution because TransNamib is such a massive national project that will require big money,” Jooste said.

He said the negotiations for the short-term bailout for TransNamib is far from being finalised but admitted that Cabinet is set to discuss the proposals at next week’s meeting.

A source said there are suggestions for TransNamib to be given N$7 billion to revamp the railways.

Jooste said the amount needed to revamp the railways might be more than N$7 billion but said it will cover several years.

He said the parastatal has been underfunded for many years. Since the TransNamib board has also not been appointed, Cabinet will be discussing the issue without involving the board of directors.

Jooste said he had a conversation with transport minister Alpheus !Naruseb on the appointment of the board and said consultations on the issue will continue but insisted that the incoming board will be a group of people who can steer the company away from the red.

Works ministry spokesperson Grace Mubonenwa told The Namibian yesterday that the Cabinet committee recommended long and short-term strategies to assist the ailing TransNamib.

These strategies, according to Mubonenwa who also serves as Cabinet liaison officer, will all be tabled at the next meeting slated for next week.

The decision on whether to grant TransNamib the millions it wants will go through President Hage Geingob, who chairs the decisive Cabinet meeting scheduled to take place in two weeks.

TransNamib has a history of depending on government bailouts over the years to sustain its operations. Board infighting weakened the leadership of the parastatal.

The parastatal has also earned a reputation of undertaking controversial turnaround plans that require millions from taxpayers.

TransNamib announced a 180-day turnaround strategy in September last year which was put in charge of Johan Piek, a private consultant.

The parastatal experienced problems with Piek due to irregularities with his work permit and this delayed the implementation of the turnaround strategy which ended in March.

Part of the turnaround strategy was that TransNamib was to buy locomotives, repair locomotives, and reduce the workforce.

TransNamib was also told to cut on its non-core businesses.

In January this year, TransNamib said the company will retrench about a 1 000 of its 1 600 employees.