RCC and Transnamib at interesting major crossroads

0
116

The highly questionable proposal that is being floated around by the ministers of public enterprises and finance to either cull or preserve the RCC and Transnamib should be treated with extreme care.

Although their intentions seem to be quite sincere in the short term, this proposal will eventually in the medium to long term crowd out the Namibian government from two key national state assets, that being the national road network and the rail network infrastructure for the simple benefit of a few well-placed and resourced private sector players to the long term detrimental and incremental cost to the paying public.

The RCC and its two established entities, the Road Fund Administration (RFA) and the Roads Authority (RA) are all government-owned entities that were officially conceived in 2000 to somehow work in harmony for the core interest of constructing and maintaining the state-owned strategic asset which in this case is the national road network.

In this regard and in no particular order, the RFA in conjunction with the RA were specifically tasked to collect and administer revenues from all road users, inclusive of the popular fuel levy, while the RA in addition from additional government budgetary allocation is tasked to spend these received funds on the construction and maintenance of the national road network, of which the RCC was initially supposed to be the main contractor.

However, and as with in some families, differences of opinion and misunderstanding do occur which in this case has since the inception of the abovementioned three companies caused tremendous animosities and confusion of which the consequences are the subsequent corporate isolation and the potential complete closure of the company. RCC, as a result of the above background, became the outcast of which a serious case is now being presented by the abovementioned ministers to completely liquidate it from the rest of the family.

On a positive note but to all gravely concerned parties, the yearly national road construction and maintenance budget of the RA and that of the government towards roads is quite very large of which a guaranteed 50% support agreement, with no specific timelines, was supposed to without any fear nor favour to anyone be in place to allocate road projects to the RCC with the core main requirement(s) that they submit and maintain strict competitive pricing thereon of which the balance thereof can thereafter be allocated to the private sector to tender for. In the absence of such an arrangement, all and any attempt to support the medium to long term survival of this government-owned business entity will be in vain to the subsequent benefit of a few privileged minorities.

RCC, whether by design or default, will never in the medium to long term be able to survive on its own solely on independent competitive bidding against lean private sector participants without the direct support and intervention of its sole shareholder. The potential successful attempt by the two ministers to liquidate RCC will hence therefore going forward in the medium to long term put the total construction and maintenance of a state owned asset into the total hands of the private sector, which in any ways will be against the Namibian government’s intended position of maintaining social and political harmony in terms of creating, retaining and maintaining mass employments in key sectors of the economy.

With the above said, the RCC case going forward is quite very simply one to solve but for unknown reasons the core political and economic leadership position on this highly sensitive matter has been sincerely absent over the years to make the right strategic decisions to keep the company sustainably alive. Further sadly so and in this regard, the various ministers of works and transport have over these same years not managed to rescue the situation to the now detrimental state of the company to such an extent that the company now find itself in this very sad state of affairs.

Transnamib on the other hand does not need to be privatized at all but to rather re-align its business model and management operational structure to enable it to focus more on its core mandate of transporting large varieties of cargo volumes and passenger services.

Transnamib, further to the growth and expansion of the mining sector in particular, has a very stable niche market and potential which can enable it to be more profitable and sustainable. The company’s road freight services could be absorbed by Nampost to take over to minimize job losses.

In the final analysis, RCC’s continued presence in the road sector simply depends on a very simple but widely acceptable long term business model of guaranteed 50% job allocation from the RA with clear guidelines and parameters without any predetermined timelines, whilst Transnamib simply needs to re-align its business model focus and top management structures.

In conclusion, the argument to therefore either liquidate or privatize these abovementioned state-owned entities should not at this stage or at any other stage be on the national table as that will be more detrimental to the long term socio-economic developmental aspect of the country.

* Pendapala Hangala is a Namibian socio-economist.

LEAVE A REPLY

Please enter your comment!
Please enter your name here