BR hands over lucrative contract to private firm
staff writer | Monday August 24, 2026 06:00
The deal includes hauling of Botash’s salt and soda ash under a 25-year arrangement that will see Baaitse’s Life Compass Botswana and its partners supply and finance locomotives and rolling stock while taking 70% of the profits generated from the operation. The deal comes after a turbulent period in which an earlier P25 million arrangement involving Baaitse’s company and BR was cancelled, triggering a dispute that remains the subject of settlement talks.
The businessman says the agreement followed a Request for Proposals and subsequent Invitation to Tender (ITT) by the BR earlier this year,
This time, however, Baaitse is back at the parastatal under a different structure, one centred on a long-term concession and private financing of rolling stock for a freight operation expected to focus heavily on Botash products, including salt and soda ash. Tender documents seen by Mmegi show that BR issued a tender of provision for structural financing solutions to support rail transportation of salt and soda ash.
The tender’s issuance date was on the April 2, 2026 while the closing date was eight days later.
The method of procurement was by direct procurement with bidders required to have cumulative value of more than P500 million in previous similar projects or at least P250 million to qualify for next stages of evaluation.
Speaking to Mmegi recently, Baaitse confirmed that his enterprise was awarded the contract saying his consortium has commitments ranging from a minimum US$70 million to as much as US$500 million to finance the operation.
The target is to operate between eight and 12 trains per month and evacuate between 30,000 and 42,000 tonnes of Botash products every month.
“We have a commitment of minimum $70 million to $500 million to operate 8-12 trains a month. “Our target is to evacuate between 30,000 to 42,000 BOTASH products monthly,” he said.
Those volumes translate to between 360,000 and 504,000 tonnes annually, a significant amount for an entity whose inability to meet the transport requirements of its biggest bulk customers has become one of the central causes of its financial deterioration.
BR has previously acknowledged that it had been unable to meet Botash’s demand for the transportation of more than 300,000 tonnes of soda ash annually.
The railway’s dwindling rolling-stock capacity forced the soda ash producer to increasingly rely on road transport, despite the additional cost associated with moving its heavy products by trucks.
Botash has the capacity to produce 300,000 tonnes of soda ash annually and 650,000 tonnes of salt, making its relationship with BR one of the railway’s most strategically important commercial opportunities.
At the beginning of the year, BR disclosed that only 12% of its wagon fleet was operational while just 26% of its locomotives were in service.
Freight volumes stood at 521,000 tonnes against a target of 935,000 tonnes, with the railway continuing to spend more money than it was generating
But while the need for private capital is beyond dispute, analysts say the 25-year arrangement raises a much harder question about the price BR is paying for it.
Under the agreement, BR will receive 30% of the profit while the private consortium takes 70%. Life Compass will provide additional rolling stock and financial support while addressing maintenance and capacity constraints.
The consortium is expected to recover its investment through charges linked to the assets deployed and the revenue generated, while the broader arrangement also provides for profit-sharing, technical support, spare parts, employee training and maintenance systems.
Deeper critical questions have risen over how the 30% profit share is calculated.
Profit is what remains after costs are deducted from revenue and in an operation involving privately owned and financed locomotives, those costs could include maintenance, fuel, insurance, depreciation, spare parts, financing and other operational expenses.
The exact agreement will therefore determine how much value ultimately reaches BR. Those details matter because 30% of profit can produce a radically different outcome from 30% of revenue.
Analysts also say the latest arrangement is also impossible to separate from Baaitse’s previous dealings with BR.
In 2025, Life Compass was at the centre of an earlier arrangement that had initially grown out of a proposal for a dry port at Charles Hill before the investors were redirected towards BR’s more urgent infrastructure and rolling-stock needs.
According to the Office of the President, the investors were asked to assess BR’s infrastructure and subsequently redirected their interest towards the railway’s operational priorities.
The earlier arrangement was later cancelled by BR. The state railway maintained that aspects of the agreement unlawfully transferred functions reserved for the operator.
Baaitse challenged the termination and insisted that the project was intended to recapitalise and restore the struggling railway.
Now, as settlement talks continue over that cancelled arrangement, Life Compass has secured a fresh 25-year concession.
The chronology becomes particularly significant because in March this year, former Transport and Infrastructure Minister, Noah Salakae told Parliament that no multimillion pula contract had yet been awarded by BR.
He said the railway was conducting its own procurement processes and that more than 19 companies had expressed interest in participating in BR’s transformation.
Baaitse said Life Compass subsequently went through the RFP and ITT processes.
BR has had its own fair share of troubles. In 2024, Botash publicly complained that poor rail performance across the region was disrupting its operations and profitability, forcing it to shift products and raw materials onto roads at considerable cost.
At the same time, BR has recorded years of losses. The railway reported a P90 million loss in the prior year and was expecting another P25 million loss as its rolling-stock crisis continued to constrain its ability to service customers.
Critics have highlighted that there is little argument that BR needs investment. However, the harder question is whether the railway, in its desperation for locomotives and wagons, has negotiated from a position of weakness.
A 25-year partnership could finally give BR the rolling stock it needs to win back volumes, protect jobs and restore the competitiveness of mining and bulk producers that depend on rail.
At the sametime, it could also lock the state-owned railway into a quarter-century commercial structure whose economics will be determined by decisions being made today.
For a company that owns the tracks, has an established customer base and is central to the country’s mining and export economy, the question is more than just about whether private capital should come into BR, analysts say.