“TransNamib is determined to overhaul its image as a battling state-owned enterprise and to revive the ‘glory days’ of the railways in Namibia. Senior managers of TransNamib met with high-ranking officials from the ministry of works and transport and members of the TransNamib Board to clear the air on the company’s past, current and future challenges and to persuade the public that TransNamib was committed to becoming a vital part of the country’s economic growth.

“Titus Haimbili, chief executive officer of Trans-Namib, told deputy minister chief Samuel Ankama and others during visits to several TransNamib sites that the company acknowledged the ‘legacy of challenges’ it had to overcome and was committed to address. He added that TransNamib was ‘not promising miracles’ but was ready and willing to ‘lay a sound foundation for the railways in Namibia’.

“TransNamib could become a vital part of railway infrastructure in Africa, a critical development need according to the African Development Bank. In Namibia particularly, a well-functioning railway system can be a critical asset, as the uranium-mining industry continues to grow and railway traffic volumes could double.

“Haimbili acknowledged the important role of Trans-Namib in line with the wish to develop the port of Walvis Bay into a transport hub of the SADC region. The company had to battle ‘an image of being a non-performing state-owned enterprise (SOE)’ and had been ‘haunted by a stigma of secrecy and a lack of active stakeholder involvement,’ he said.

“Haimbili introduced the company’s top management team during the site visit, and said their qualifications and crucial roles within the company’s structure should be enough to refute criticism describing them as ‘incompetent’ and ‘political appointees’. Other challenges include an aged railway network, which is approximately 100 years old. Its trains are past their sell-by date too, and the recently acquired Chinese locomotives have been heavily criticised.

“Profits since 2000 have been ‘elusive’, Haimbili said. He added that ‘this negative profit trend’ could have been influenced by the lack of updated annual financial reports and ‘unaccounted asset register and evaluations’.

“On the other end of the scale, Haimbili took stock of the company’s successes and achievements. Major achievements include the agreement with the Ohorongo Cement factory
outside Otavi. The agreement, which is projected to rake in N$60 million annually, will make TransNamib responsible for the transport of coal and cement to and from the factory.
Another project is an agreement with GPT Infraprojects Ltd to establish a factory in Tsumeb that will produce concrete railway sleepers. These sleepers will be used by TransNamib to upgrade critical railway lines across Namibia.

“Another important milestone is a reworked agreement with Beijing Zongs Railway Supplies in May 2010. Haimbili said the previous agreement with the railway supply company was flawed because of a stipulation that ‘upfront cash payment was required before any parts could be delivered’. This agreement had been revised and the delivery of parts should improve, Haimbili said.

“Haimbili also highlighted an N$80 million programme to refurbish 18 General Electric locomotives, and an SOE agreement with NamPort to share strategic business information and experience.

“TransNamib employs 1,636 people, making it one of the largest SOE employers
in Namibia.”

Under normal circumstances, she said, between 300 and 400 Transnet wagons are to be found on the Namibian rail system. While the strike continued, this rolling stock could not be moved back to South Africa, carrying cargo such as zinc concentrate from Namibian mines. Hangula-Paulino said this had resulted in “very substantial” losses and commodity shortages.

According to the IPPR, the one-off subsidy to help TransNamib fund its capital projects is a “meagre amount when compared to the N$350 million for NamPower – given the “mammoth” task ahead of the railway.

The Minister granted NamPower subsidies of N$100 million in 2010-11, N$100 million in 2011-12 and N$150 million in 2012-13. This is on top of the N$120 million she approved last year.

TransNamib, on the other hand, received N$83,9 million for the current book year. Nothing has been budgeted for the next two financial years, and TransNamib received no subsidy in 2009. Namibia needs to put “major investment” into its railway sector, IPPR says.

“Rail was the predominant carrier of freight in Namibia for most of the 20th century until the 1980s when the transport sector started to be liberalised. This brought about a departure from commercial regulation that favoured the advancement of road transport. Rail tonnage started to decline from 3.7 million tonnes per annum in 1982 to a mere 1.4 million tonnes in 1999. Thereafter, a recovery to just over two million was achieved in 2005. The main contributors to the growth over the past decade were the construction and mining sectors. There were positive developments – in particular the uranium mining industry, construction (notably the Ohorongo Cement development) and corridor development sectors.

“This has raised the prospects for strong rail volume growth of around 30 to 40% over the next five years, provided the required capacity in terms of infrastructure and rolling stock can be established. Rail volumes have for a very long time moved predominantly along the South African/Namibian rail corridor through Upington and Ariamsvlei.

“This pattern has started to change due to new developments such as the liberalisation of the transport market, shifting of fast-moving consumer goods (FMCC), and other goods to the faster and shorter road options. Another factor for the change is the development of the Walvis Bay port as a viable option to the South African ports and the development of the Walvis Bay corridor routes.

“A third reason is the establishment of the Trans-Kalahari Highway that cuts the road distance between the Gauteng Province in South Africa and Windhoek to 1,500km. The rail distance hereof is 2,130km, a difference of 42%. The situation has changed to such an extent that only 24% of the total rail volumes now flows along the South African/Namibian rail corridor with the balance predominantly from Walvis Bay. This trend is expected to continue.

“TransNamib said great emphasis therefore needs to be placed on the rail infrastructure linking into Walvis Bay – hence the Windhoek/Walvis Bay and Walvis Bay/Tsumeb/Ondangwa/Oshikango routes. TransNamib stated that along these routes, the Kranzberg/Tsumeb (392km) and Walvis Bay/Swakopmund sections require urgent investments of more than N$1.6 billion in total.

“Historically, regular full-service sleeper-type passenger trains used to operate between Namibia and South Africa, and within the borders of Namibia. These services were terminated during the early 1990s due to economic considerations. Then, rail passenger numbers declined drastically.

“In 1994, TransNamib introduced the sitter class Starline, as a way to revive the passenger business through a model that would be more cost-effective and thus affordable to the general public. Passenger numbers started to climb from a very low 45,000 in 1994 to 153,500 in 2000. There was, however, a decline in passengers since 2000, and a projected passenger figure for 2010 is only 63,000. There are numerous reasons for this decline. First, is that there is poor timekeeping of trains slowed down due to mechanical failures.

“Similarly, long-distance midi buses since introduced are appealing more to passengers for their comfort, speed and flexibility.

“There has also been a cancellation of services on the routes of Walvis Bay and Tsumeb due to the dodgy rail track conditions.

“Notwithstanding, said TransNamib, its safety record for the conveyance of rail passengers remains sterling. For a continuous period of 32 years up to the end of 2009, it has not experienced a single fatality or serious injury to its passengers. This means that four million passengers over that period have been accident-free. There was, however, one fatality towards the end of 2009, but TransNamib insists that rail travel still remains the safest mode of transport. The company is convinced that with improved efficiencies and attention to detail, passenger numbers can be revived again.

“The TransNamib fleet of locomotives has been in service for more than 42 years. There have been some additions in 2007 with the purchasing of locomotives from China. Although the old fleet is due for replacement, the company said, it continues to operate these at the expense of high operating costs. Funds are not available for replacement, it said.

“To improve the efficiency of the fleet, TransNamib has embarked upon a refurbishment programme in 2009. This programme covers only 18 locomotives – which is 26% of the fleet – and more funds will be required for the rest.

“’Railway locomotive technology has advanced a lot over the past four decades and to remain competitive, a strong consideration will be the acquisition of modern-day locomotives and/or the introduction of newer technology in the old fleet,’ TransNamib said.

“The parastatal’s rail wagon fleet also dates back more than 40 years, and similarly lacks newer technologies such as self-steering bogies and heavier axles. TransNamib said this means an increase in maintenance costs on rolling stock and the rail track, rending the system less energy-efficient.

“There has been some sensational reporting on recent rail accidents. But TransNamib countered by saying that benchmarked against the norm set for railways in the SADC region, it has only incurred 2.75 mainline accidents per million train-km during the period between 2004 and 2009. The SADC benchmark is 4.0. TransNamib reported 3.30 yard accidents per 1 000 trains over the same period. Again, the benchmark here is 4.0. It stated that yard accidents are generally of low impact in terms to the damages or disruption to services.

“And over a 32-year period, there has been a loss of three human lives – two crew members and one passenger – due to rail accidents. Over the last 10 years, there were 19 fatalities due to level crossing accidents. This, TransNamib said, was as a result of road user negligence.

“’Rail is undoubtedly still the safest mode of surface transport if the tonnage transported accident-free and minimal fatalities are taken into account,’ said TransNamib.

“However, it said the issue of TransNamib Holding’s self regulating status regarding public rail safety still remains a cause of concern and calls for the establishment of a national rail safety regulatory body.

“TransNamib said it is important for government to realise the external costs imposed by road transport against that of rail.
External costs – like accidents, policing, congestion and environmental degradation – are not made for by the direct transport mode users. This is paid by the general public through tax collection.

“A study by the Rail Road Association in South Africa shows external costs of road amount to 15.6 cents per net ton per kilometre compared to 1.8 cents for rail. This situation is also relevant in Namibia. ‘These hidden costs serve to benefit the one transport mode at the expense of the other. It is therefore short-sighted to let a national rail system degenerate as a huge price will be paid by society and the economy in the long run,’ said TransNamib.

“Hence, it proposed that the value of each transport mode – be it road or rail – be assessed in terms of long-term sustainability.

“The future growth of the national rail network, said the parastatal, depends on a number of things. These include, among others, pro-rail government policies; more investment in the rail network; investment and the introduction of new technologies in the rolling stock; a growing capacity to respond to the growing need for bulk transport in Namibia; and greater investment in skills development appropriate to the uniqueness of rail transport.

“A viable alternative for railway infrastructure, it said, is public-private partnerships, because it represents a method of procurement that brings together the two sectors in a long-term partnership for mutual benefit. TransNamib Holdings will explore modules of public-private partnership, it said concession and divestiture appear to be a distant consideration if not the least appealing alternatives.

“And, it argued, (public private partnerships) PPPs would be beneficial after years of budgetary constraints of the sole shareholder [government], leading to insufficient investment in the rail network and rolling stock. Moreover, it argued, there is a growing reliance on public funds. This has meant that TransNamib – like other state-owned enterprises – has to scramble for limited budgetary allocations, despite the fact that government spending on TransNamib “appears to be minimal since its commercialisation”.

“Another consideration is the loss of infrastructure performance, and thus growing safety considerations, as well as a loss of revenue and market share.

“Between 1998 and 2004, TransNamib got a cash injection of N$250 million from government. Except for 2004, when it generated sufficient revenue to cover operating expenses – mostly due to asset realisation – its financial performance has been on the decline. This, it said, will not only have a negative impact on NamPort, but also on the general safety and conditions of road infrastructure and the environment.

“Similarly, rail tonnage has been declining since liberalisation of the transport sector with the roads operations taking the lion’s share of the transport market. To get out of this vicious cycle, public-private partnerships therefore need to be considered and new ways of funding need to be explored, said the company.

“It has, however, taken cognisance of the fact that any PPP cannot be implemented in isolation of the shareholder’s support, as was proven in other African countries where concessions were granted to private rail operators. ‘The Namibian Government as the sole shareholder still needs to play an integral part in the railway operations, it said. “

“Modern-day standards in the Southern African Development Community (SADC) require that railway systems be built at 18.5 tonne axle loading standard. This translates into 48kg/m rails welded in continuous lengths, concrete sleepers and good ballast standards that will last 100 years under current traffic conditions. This standard has been accepted to be the optimum design for general freight in Namibia to ensure safe, efficient and economical rail system over the long-term.

“Only 46% of the Namibian network complies with this standard. The Namibian network spans a route distance of 2,626km. This means that 1,203km have been upgraded to the 18.5-tonne axle load standard. Of this, 855km was upgraded before 1988, which is the year TransNamib was founded as a commercial entity. Since then, only 100km were upgraded by TransNamib with the Namibian Government constructing the first 248km of the Northern Railway Extension (NRE) at this standard.

“The rest of the network complies only with 16.5-tonne axle loads, with some sections even below that – at 15.0 tonne and 13.5 tonne limitations.

“Construction work currently under way on the rail network is the reconstruction of the 120km link between Aus and Lüderitz, and to complete the last 60km of the NRE up to the Angolan border at Oshikango.

“Legislative changes came into effect in 1999 with the establishment of the National Transport Services Holding Company that required the rail infrastructure – except for station yards – to be transferred to government. TransNamib, as the operator, remained responsible for the maintenance of the rail system with its own generated funds and in accordance with the Rail Management Agreement between government and TransNamib.

“Upgrading of the rail system is also primarily the responsibility of TransNamib. According to the parastatal, this aspect places an unrealistic burden on it because – due to historic reasons – 54% of its route distance is classified as sub-standard. The cost of maintaining the sub-standard sections continues to escalate every year, added to the increased operational risk these sections have for the operator. TransNamib management has on a number of occasions pointed out that a review of the maintenance agreement should be treated as a matter of urgency.

According to New Era, published in Windhoek, the German-owned factory entered an agreement with TransNamib in December 2009, in terms of which the railway would deliver commodities to and from the factory. Cement production is due to start in January 2011. As part of the arrangement, TransNamib is to construct a private railway siding to the factory.

TransNamib, after publicly soliciting expressions of interest for the construction of the railway extension to the cement factory, has now appointed NRP to undertake the work. NRP contract engineer Ferdinand Nghiyolwa says it will be completed in “five to six months.”

Construction of the Ohorongo factory is at an advanced stage and the transport of coal to the site is expected to start in September.

Valued at N$2.5 billion, Ohorongo remains the largest direct investment in Namibia by a Germany company, and will be the third largest foreign investment in the country after the projected N$5.8 billion investment by French mining firm Areva and the N$3.2 billion invested by Skorpion Zinc a few years ago.

She says she was informed in July by a senior member of the cabinet secretariat that “the tender was called to test the market in order to assess whether China was asking a market-related price for the project in question.”

The tender under discussion was for the supply of rails for the Oshikango-Ondangwa extension of the new northern railway, and was published on 3 February 2009. In subsequent investigations after the tender was cancelled, Mbundu says, she discovered that the permanent secretary in the ministry of works and transport had applied to the Tender Board of Namibia, asking that no open tenders be invited for the northern railway extension project.

Shetu Trading was the only tenderer for the project. Mbundu argues that “it was predetermined that the project would have been awarded, without tender procedures, to a Chinese company. This amounts to unlawful action and an abuse of power.”

Mbundu also claims that during price negotiations with the Chinese, prices were compared, “including applicant’s tender” in order to negotiate lower prices with the Chinese.

Mbundu adds that the Chinese company which secured the contract “was never required to comply with any of the requirements” of the tender and that the disqualification of Shetu Trading as the only bidder was not valid. “This constitutes double standards, unequal treatment and unreasonable administrative conduct,” she submits.

“Down south at Aus on the Lüderitz line there is a large depot with concrete sleepers in neat stacks including those fancy see-through ones that Railways Africa published some time ago. Brave people resuscitating this very difficult line. Apart from this large track and sleeper depot, the old German railway station still stands together with a motley array of goods trucks in the station precinct. A very nice little hotel overlooks the station called Bahnhof Hotel.”

“Visited the Windhoek Railway Museum where Konrad Schullenbach showed my wife and me around. It is good to see this museum occupying most of the top floor of the Windhoek station building, thereby putting this fine building to good use where it would otherwise have stood empty. This museum is well worth a visit, having a large number of interesting artefacts on display together with some fine photographs.

“The yards at Windhoek were all but deserted with no movement to be seen on a lovely morning. A far cry from the bustle of the fifties with the engine shed about a hundred metres from the platform and teeming with class 24s, 8s and 7s with shunting going on all over the show and the yards usually filled with passenger coaches and goods trucks. Of course many railway staff were also to be seen as well as the public coming and going on railway-related business.

“Okahandja was also quiet – no trains but the historic old station building built by the Germans still stands. Unfortunately, this is more a place for loafing in the shade for many and no sense of urgency is to be found, or indeed of anything railway-related. Meanwhile, big trucks rumble and grunt their way [on the road] through the town all the time. The railway is disappointing perhaps but not Okahandja’s biltong and droëwors. This made me forget the trains.

“Visited the family farm at Wilhelmstal just this side of Karibib where we crossed what seemed like 95lb track on good ballast. Stopped at Karibib station on our way to Swakopmund where a train drawn by red and grey Chinese diesels was standing. It was empty but the diesel was throbbing and staff were around. It was called ‘the Desert Express”. Cream and brown livery, Union Carriage coaches. Again, the original German station still stands, nicely preserved and serves as a restaurant.

“Saw no trains at Swakopmund”, de Wet continues, adding that the distinctive German-styled former station in the town, now a hotel, has been refurbished recently in the African style.

“Had supper in the old tug Danie Hugo on the foreshore. This has been converted into a fine restaurant but it looked much better moving shipping in Table Bay Harbour back in the 50/60s. On our way north along the coast to Henties Bay at Vlotska Baken, I saw one seaside home there constructed partly of a narrow gauge vehicle. This has been there for many years and has surprisingly survived.

“On to Etosha which costs an arm and a leg nowadays and then out again to see a goods train from Tsumeb cantering along with a single dirty red class 33 SA diesel on the new railway line north. After a night in Tsumeb it was on to Grootfontein where again, no trains were to be seen, but evidence of Grootfontein’s importance as railhead during the Angolan war in the largish yards with plenty of overhead yard lights.

“Travelling south again, another very smoky SA diesel on a train of tankers was passed near Otavi, a run-down little town near some copper mines where the making of mosquito nets is its second largest industry. Went along to the station to have a look and saw a few tank wagons and a dilapidated, 1950s style SAR station building – ugly and utilitarian.
Turned around and headed towards Otjiwarongo – a much more attractive town.

“After arriving back in Windhoek the next day and passing a goods train swinging around the curves to Okahandja we drove on to Gobabis. For many years as a youngster, I had watched the class sevens to and from Gobabis trundling past my home and once my wife had taken the overnight mixed to that town back in the 50s. I longed to be in one of the four wooden saloons behind the clanking goods wagons on the overnight train as it panted past our home on a long embankment but never managed it. We decided to trace its route to that Kalahari town and to overnight there.

“The climbing track through Klein Windhoek was now ballasted and heavier rail was in place. It is a tremendous climb out of the Namibian capital and all the way to the airport is hilly country which required the use of two locomotives, one banking. At last, at Windhoek International Airport, the first sign of level ground and a string of avgas tankers at the pumps. This is probably the main load on the line these days. The line continued into yet another thunderstorm with Kameeldoring savanna etched against dark clouds. Then a sign – ‘You are entering CATTLE COUNTRY!’ And the large ranches of the Gobabis district and their main export, beef, swept into view.

“And the railway line? This had now deteriorated into very light track set in sand, looking exactly as it had 50 years ago. No more cattle by rail – so what does this line still carry? Very little I’d have to say. The station and yards at Gobabis were deserted with only two grey DZs next to the goods shed. The station building looked good, nicely painted and looking as if it was waiting for the next train to arrive. The yards, extending quite far beyond the station, with yard lighting, were completely empty and probably have been ever since the cattle trains stopped running. It was more a museum than anything else.

“So the next morning after breakfast, we left this town where my wife’s father had once run the Gobabis Hotel back in the forties, and sallied southwards along the Nossob River bordering the Kalahari Transfrontier Park. We passed farms visited long ago and then began the tiring trek from Mariental (no trains) to Keetmanshoop. One train stopped in section with cement wagons just outside Keetmans with two of the Chinese diesels.

“Grünau hotel that night and many memories rekindled of stopping opposite the same hotel 50 years ago and watching people happily drinking on a hot stoep with American farm bakkies parked in front. They used to chase our train, the farmers, until it grew too dark and then they’d turn around in a cloud of dust, hooting. Probably saying goodbye to someone on the train. That night I heard the grumble of a diesel passing on the 60lb track. No different from all those years ago although the track has been upgraded round Windhoek and on to Swakopmund.

“And so, the next day we crossed the Orange River into the bone dry Richtersveld and it was au revoir to Namibia.”

The amount of N$44 million was funded from parastatal rail operator TransNamib from its own cash reserves, Angula said.

The locomotives failed in service 265 times in 33 months, the minister told parliament in July. Finally they were grounded in June 2007, due to their poor performance. He added that TransNamib and the supplier had agreed in 2005-06 that the Chinese company would rebuild the four locomotives at a cost of $US260,000.