27 Feb 2020

Financial distress experienced by the Botswana Railways (BR) is said to be a historical issue as in the past the organisation was re-capitalised by the government to operate efficiently.

The BR board of enquiry on Wednesday learnt from the organisation’s internal audit and risk manager Mr Koonyatse Tamasiga that despite the financial challenges, the BR management remained optimistic that assistance from the government would propel the organisation to run as a profitable business.

Assistance, he said was focused more on the passenger train operations, provision of the funds to re-capitalise BR and the sufficient number of locomotives.

Sharing with the board of enquiry some of the factors that led to the organisation’s financial distress, BR CEO, Mr Leonard Makwinja cited the 2018 Transnet rail upgrade from Mafikeng to Krugersdorp which resulted in the freight moving slowly.

He also noted that maintenance of the old locomotives consumed more money from the BR coffers.

Mr Makwinja, however, said as part of the interventions, they were planning to construct a workshop to reduce the costs.

The CEO further said running a passenger train was costly to BR. He said looking at its provision of service to the nation, it could operate with a little bit of help from the government.

One of the board members, Mr Bartholomew Seitlhamo had asked Mr Makwinja on the factors that had led to financial distress.

For her part, BR director of finance and corporate services, Ms Chelesile Malele said the organisation’s expenditure for the passenger train was P30 million annually.

She said given financial challenges, the management had written to the Ministry of Transport and Communications to obtain permission to borrow money since they were a profit-making organisation.

Ms Malele said negotiations were on with one of the commercial banks, but expressed concern that due to the current financial performance, they could qualify for less. ENDs