Saturday 15 May 2021
  • :
  • :

TransNamib to stop road services

Less than five years after spending N$13 million on new trucks and road fuel tankers, TransNamib this week said it will soon stop providing road freight services to its clients.
The company’s Chief Executive Officer Johny Smith revealed the imminent change this week while speaking as a panellist at Lithon’s 2nd Annual Conference on Infrastructure, Urban Development and Finance held earlier this week in Windhoek.
“These are some of the options we are looking at to become more efficient. We will cooperate with private firms for the short haul routes,” he said.
This revelation comes less than five years after the cash-strapped national provider of rail and road transport solutions splashed N$13 million on four Scania R500 trucks and eight road fuel tankers, officially commissioned at a special ceremony, to carry bulk fuel to all corners of the country.
The investment, the company said at the time, is also aimed at improving TransNamib’s competitiveness and efficiency following a review of the various business operations which identified bulk fuel transportation as one of the areas that needed improvement. The tankers each boast seven compartments can hold a total capacity of 45,500 litres and can carry both diesel and petrol. Although he did not give a timeline, Smit said the rail operator will shift its attention solely to offering quality and efficient rail services and its mega property portfolio.
Smith said considerations have to be made around the employees who work directly with the road department of the company.
“We must be mindful because we have a staff complement that could be adversely affected, therefore I cannot give you a timeline as to when we will execute the move,” he said.
Property portfolio
TransNamib, which has one of the biggest property portfolios among state-owned entities, has over the years failed to capitalise on its huge property portfolio.
This failure to manage the property portfolio forced the rail company’s business arm to outsource the task.
The Namibian reported last year that TransNamib chose four companies-AIJ, Utility Solutions Namibia, Broll and Joseph & Snyman-to bid for the contract in 2015. The company’s suspended property chief reportedly recommended that AIJ should be awarded the three-year contract, because it had scored the highest during the evaluations
TransNamib then awarded AIJ Project Management a three-year contract from September 2016 to administer the parastatal’s property portfolio valued at around N$1,4 billion.
Smith was quoted earlier this year saying TransNamib had duly given AIJ notice in April as per the contractual agreement that it would terminate the three-year contract. The contract was due to run out around the middle of next year.
“A source said AIJ was contracted to relook all the lease agreements entered into for the use and occupancy of TransNamib’s land and properties, sign new, market-related lease agreements, collect rent, manage water and electricity bills as well as administer rates and taxes on these properties. TransNamib “cannot further continue” with AIJ because it had signed “unauthorised” long-term lease agreements on behalf of TransNamib, adding that neither he nor his executive team had been aware of some of these agreements. Many wrong decisions, what I call snakes, have been made,” Smith said about previous decisions and commented that the management of the property portfolio should not have been outsourced,” reported Namibian Sun in August.
Smith reportedly said “the contract was detrimental to TransNamib.”
“Prominent businesses and individuals allegedly owe the institution millions of dollars in outstanding monthly rental payments. The transport utility has a huge property portfolio and owns homes and property all over Windhoek as well as in almost every Namibian town where there is a TransNamib train station. TransNamib has over one thousand properties across the country which could potentially bring it income of over N$100 million a year. Inside sources at TransNamib in large part attribute the financial crisis the cash-strapped Government parastatal faces to the non-payment of rent by tenants,” according to 2017 media reports.

Leave a Reply

Your email address will not be published. Required fields are marked *