TransNamib the state-owned rail enterprise has confirmed it is faced with a severe financial crunch and is finding it hard to generate funds.
This follows Wednesday’s announcement by the company that it was having difficulties in paying its approximately 1 600 employees a 13th cheque, which led to a mass protest in front of the company’s headquarters on Wednesday.
“The financial situation of TransNamib is no secret. We had been engaging all stakeholders including our shareholder of the dire straits in which the company finds itself today,” said TransNamib executive spokesperson Struggle Ihuhua yesterday.
Ihuhua said the company has never failed in paying salaries – however the 13th cheque poses a serious challenge for TransNamib to honour simply due to financial constraints.
He said the company informed its shareholder accordingly about its predicament, “but so far we have no substantial confirmation to this effect to date”.
“We have never said the 13th cheque will not be paid, what we are saying is that we have engaged the shareholder about the various issues the business is facing, of which the 13th cheque is one,” he said, adding that the company hopes the issue will soon be resolved.
Ihuhua refused to divulge how much the company will need to pay bonuses, saying their shareholder knows what the company’s financial needs are.
He said “discussions between the TransNamib Board and our shareholder are still underway to find an amicable solution sooner rather than later.”
On the issues of salaries, Ihuhua said all employees would receive their monthly salaries today, November 25, as is usually the case. Asked whether the financial problems faced by the company had anything to do with the budget cut, Ihuhua said in their interactions with the shareholder it has come out quite firmly that the lack of funds is a national challenge, which may have a direct or indirect impact, not only on TransNamib, but across all sectors of the economy.
When asked what happened to the company’s 100-day turnaround strategy, Ihuhua said they have developed a comprehensive Integrated Strategic Business Plan “and all the initiatives contained in our strategic business plan are aimed at not only transforming the company into a profitable business, but making it a sustainable entity in the railway sector of Namibia and, subsequently, the region.”
However, he said, none of these initiatives are for free – it comes at a cost and it goes without saying that TransNamib does not have the capital to implement key strategic initiatives of the strategic business plan to deliver the strategic outcomes required to transform TransNamib as Namibia’s public enterprise role model.
“The Integrated Strategic Business Plan awaits final approval by our shareholder,” he added.