The Minister of Works, Transport and Communications, Johnny Swartz, has said that the Botswana Railways (BR) will soon halt its passenger train services.
The ministry has directed BR to stop passenger train services because it is an expensive exercise. More details as to when the service will be suspended are expected early next week. In October 2006, BR indefinitely suspended the day passenger train service and now the night train is to be stopped.
The passenger coaches will be sold to raise funds as part of a strategy to re-finance BR which made a P78 million loss over the last year. The company now requires a recapitalisation of close to P600 million.
Swartz said in Parliament yesterday that halting the passenger train service is a necessary evil that must be tolerated for the success of the company.
BR is expected to announce the indefinite suspension of the train service early this week. BR, spokesperson Linah Masenya said details will be available at a press briefing next week.
Swartz said they will have to adopt measures to reduce the
The minister said in 2005-2006, BR's costs of passenger services were P38.8 million, while revenues were only P9.1 million resulting in a net loss of P29.7 million. Swartz said a total investment of P586.5 million will be required to overcome BR's shortage of locomotives and rolling stocks in order to meet current demand for traffic. He said this will be financed by converting P104 million outstanding loans from government into equity, disposing off locomotive and rolling stock assets that are no longer useful, use of BR reserves and guaranteed borrowing, on the basis of a debt-equity ratio of 0.6:1.