03 Mar 2020

Botswana Railways (BR) has been in financial dire straits for some time, the organisation’s former board chairperson has revealed.

 Testifying before the board of enquiry into the 2019 derailment of BR passenger train 0501, Mr Adolph Hirschfeld said lack of funding was the greatest problem his board faced.

  BR, he explained, was not financed, in any manner, by its shareholder- the government of Botswana.

"Botswana Railways has one shareholder, which is Botswana government. But, government has many subsidiaries which are always asking for assistance, bailout or additional funding.

We are aware that we can't all get what we want all the time, but BR had a serious problem of lack of funding. I wouldn't say it’s because the shareholder didn't want to do it, but funding was not forthcoming," he added.

Running a rail operation, Mr Hirschfeld said, was challenging because it was highly capital intensive and therefore did not come cheap.

"We have about 780 employees, whose remuneration we pay from the revenue we generate ourselves. But, rail operations, normally, don't make any profit out of passenger services. We generate enough, out of freight services and that means BR generates revenue that has to pay employees, maintain the rolling stock and vehicles, which means we are diverting our revenue to do other things," he said.

Government had the responsibility of giving BR a subvention “because part of this infrastructure can only be handled by the shareholder and not by the organisation itself”, he said.

Despite the challenges, Mr Hirschfeld said he had succeeded in achieving his mandate as BR board chairperson citing the successful recruitment of the current BR chief executive officer (CEO), Mr Leonard Makwinja.

He said when the board, whose term ended on January 31, was appointed on February 22 last year, the organisation had no CEO. 

The first order of business for the board was therefore to ensure a competent person was appointed CEO, he said.

 

According to Mr Hirschfeld, the outgoing board’s other achievements were the formulation of a new BR strategy and the successful trimming of the BR structure in line with the strategy.  ENDS