BR eyes partnerships for turnaround
Keikantse Lesemela | Wednesday September 17, 2014 12:36
Speaking to Mmegi Business this week after signing the performance agreement contract with the Ministry of Transport and Communications in Gaborone, BR CEO, Dominic Ntwaagae, said they aim to increase their revenue streams through partnerships with other organisations such as Morupule Coal Mine to transport coal exports to South Africa.
“We want to grow our profits and these partnerships are the channels which will transform the profitability of Botswana Railways,” he said.
The rail organisation continues to register operating losses accounted to huge infrastructure and rolling stock maintenance expenditure. The organisation’s latest available financial results are for the year 2009/10, which shows that the BR incurred a loss of P30.9 million. In 2007/2008 it made an operating loss of P79 million compared to a loss of P10 million in 2006/2007.
Ntwaagae said the coal supply from Morupule Coal Mine would be supplied to international markets.
“This new business entails Botswana Railways providing up to 300 wagons to cater for the projected 150,000 tonnes of coal to be carried across to South Africa. Already BR is operating two trains a week dedicated to the haulage of the coal to Durban and the plan is to eventually ramp up the trains to 5-10 times a day,” he said.
Botswana Railways also entered into a business agreement with Transnet Freight Rail allowing the South African company to provide additional wagons. The partnership is based on executing a robust logistic performance of delivering products and related services efficiently and effectively.
Ntwaagae said while the organisation has suffered severe locomotives and wagon shortages in the past, management are confident that they are creating an improved establishment and equipment challenges will soon be addressed. Botswana Railways purchased 562 wagons last year, which are used for salt and coal. The total complement includes 260 salt wagons and 272 general-purpose wagons.
“This is a milestone achievement that Botswana Railways uses as a platform to leverage more business and earn more revenue,” said Ntwaagae. BR has since 2011 been required to analyse and lead the drive to make the coal logistics export strategy a reality. All the affected stakeholders have been consulted, being the ports in South Africa, Mozambique and Zimbabwe Railways Company.
Another highlight is that the organisation has recently introduced a balanced scorecard to its staff members to drive the strategy. This performance measurement initiative is expected to be fully functional by the end of the year.
“We have set ourselves highly ambitious goals, for the status quo is never enough,” said the CEO. Botswana Railways Chairman Modise Modise said the soon to be introduced passenger train would also improve the organisation’s financial performance.
“The passenger train will revamp Botswana Railways’ financial status. We are currently still in consultations with government about the tariff structures because we want a profitable business operation,” said Modise. With the operation of Walvis Bay dry Port in Namibia, which was opened on 1st September, Botswana Railways is also expected to generate between P2 million to P4 million annual profits from the facility. The dry port facility project has cost the Botswana government about P50 million.