For decades, TransNamib — Namibia’s equivalent of Transnet — has struggled with financial troubles, ageing locomotives and labour woes. But with an injection of funding and new leadership at the helm, it is charting a course for revival.
In July 2024 the state-owned enterprise (SOE) met all conditions to access secured funding of N$2.6bn from the Development Bank of Namibia and the Development Bank of Southern Africa.
Two months earlier, TransNamib Holdings (TNHL) had appointed Desmond van Jaarsveld as CEO. Fast-forward to 2025 and Van Jaarsveld is cautiously optimistic that the turnaround of the SOE is on track.
“TransNamib has secured funding to upgrade rolling stock and modernise workshop facilities, but faces short-term cash flow challenges and will remain in a loss-making position until 2028,” he says.
When he took the helm, four out of five locomotives were more than 50 years old.
“The outdated fleet limits operational efficiency and revenue growth. To address this, we are refurbishing six locomotives, remanufacturing eight more, and leasing two additional locomotives to boost capacity until the arrival of 23 new locomotives.”
The goal is to break even within three years.
Van Jaarsveld has extensive leadership experience at companies such as Namibia Breweries, Namibia Dairies, Safland Property Group and most recently DP World.
The revived Aus-Lüderitz railway line is becoming “a major revenue-generating source”, says Van Jaarsveld. It was reopened in 2019 after rehabilitation.
The Lüderitz harbour is handling increased volumes of manganese from the Northern Cape in South Africa. South Africa is the world’s largest producer of manganese, a vital component in steelmaking, but Transnet’s woes have hobbled bulk exports through Gqeberha.
Mbahupu Hippy Tjivikua, CEO of the Walvis Bay Corridor Group (WBCG), says talks are under way between his group, TransNamib, national ports authority Namport and other stakeholders to secure a second manganese operator on the Ariamsvlei-Lüderitz railway line, aiming to double shipments to 1.2Mt per year.
He says manganese exports from the Northern Cape through Lüderitz “experienced a year-on-year volume increase of 9% for financial 2024”.
Tjivikua says he wants to see overall cargo volumes increasing on the rail line, “while alleviating pressure on road infrastructure”.
Adds Van Jaarsveld: “As a high revenue-generating route for TransNamib, it is critical that there is a significant investment in the infrastructure, as a section of the line is in poor condition. TNHL is upgrading 40km of track with the Roads Contractor Co. The minister of works & transport is contracting two maintenance teams for the southern line to address critical maintenance and remove temporary speed restrictions.”
TransNamib’s revival aligns with the WBCG’s core mandate to position Namibia as a key gateway for regional and continental trade, says Tjivikua. And investors are watching developments in Namibia with keen interest.
Among them is Africa Merchant Capital, based in London. CEO Cobus Visagie says TransNamib is “a viable future partner” for the merchant bank due to its success in growing its logistics infrastructure.
“We will monitor Namport’s plans to expand Lüderitz port to improve commodity handling and upgrade the rail track, which currently can’t accommodate heavy trains, limiting export potential from the Northern Cape. Namibia is already an important role-player in the logistics scaffolding of the Southern African Development Community [Sadc].”
Africa Merchant Capital is already an investor in Namibia’s Oryx Fibre Infrastructure, which owns and operates a long-distance fibre network.
“We are partnering with TransNamib and will support the digitalisation of the rail network,” says Visagie.
He adds that improved rail interconnectivity will enable Namibian businesses — hitherto overlooked by private equity investors because of the country’s small population — to become regional sector leaders in the fast-moving consumer goods market.
Namport CEO Andrew Kanime has confirmed plans to expand the harbour at Lüderitz.
It’s hoped the expansion will advance faster than the 1,500km Trans-Kalahari railway project, for which the memorandum of understanding between Botswana and Namibia was signed in 2010. The proposed line will connect Botswana’s Mmamabula coalfields with Walvis Bay.
Visagie describes the delays in this project as “frustrating”. When completed, he says, “it will provide a more efficient route for goods exported from Botswana and Southern Africa, enhancing access to global markets for landlocked countries such as Malawi, Zambia and Zimbabwe”.
Van Jaarsveld says the Trans-Kalahari project “is still enjoying significant attention from the highest levels in the government”.
The Trans-Kalahari project is still enjoying significant attention from the highest levels in the government
— Desmond van Jaarsveld
He says a major milestone has been reached in renewing the relationship between Transnet and TransNamib. “In the past month, TransNamib settled a long-standing debt to Transnet, leading to renewed communication to explore future collaboration between the two companies and countries.”
Discussions with Transnet are under way to initiate operations from Upington to help improve the rail route to Lüderitz.
The Namibian government is the sole owner of TransNamib, which has been neglected since independence in 1990. The first lines were built by German army engineers in 1897. Later it was operated as a region of the South African Railways network.
Theft of cables and other infrastructure, as in South Africa, is a big headache for TransNamib, with associated costs surpassing N$500,000 in 2023 alone. In the same year, the government allocated about N$300m to cover the company’s operational costs, continuing a pattern of annual subsidies.
Yet there is no doubt that the rail system holds immense potential, with a total route length of 2,687km connecting nearly every major town in the country.
“Namibia’s rail infrastructure still presents significant challenges,” says Van Jaarsveld. “Less than 50% of it meets Sadc requirements. Despite the investment in new locomotives, TransNamib will continue to face operational challenges if there is no substantial investment in upgrading the rail infrastructure.
“As the owner of the infrastructure, the government has demonstrated its commitment to improving the rail system through capital-intensive projects such as the Walvis Bay-Kranzberg upgrade. The next phase is set to commence this year to upgrade the line from Kranzberg to Otjiwarongo, and to introduce new signalling.”
TransNamib handles the day-to-day maintenance of the rail system, while major upgrades are managed by the ministry of works & transport.
“Rail is an economic enabler,” Van Jaarsveld says. “It is more cost-efficient than road for transporting heavy goods over long distances. Upgraded infrastructure would make rail a more attractive option for logistics companies, which could help lower transportation costs for businesses across Namibia and in the region.”
Modernised rail infrastructure would facilitate integration into regional transcontinental corridors, such as the Walvis Bay-Ndola-Lubumbashi development corridor.
Adds Visagie: “A fully functional TransNamib can be a critical cog in the transversal connectivity of the Sadc logistics ecosystem. This connectivity can link Botswana, Zambia and even South Africa to the well-established port of Walvis Bay.
“North-south connectivity between Angola and Namibia is also being enabled and trade growth is sure to develop from there. The rail routes are there. Continued investment in infrastructure, digitalisation and operations can grow their volumes and drive down freight cost across the region, as well as remove trucks from the fragile road infrastructure.”
One of the recent strategies to alleviate financial strain was to auction off TransNamib’s property portfolio. It was once valued at about N$2.4bn, but Van Jaarsveld says: “Unfortunately, the current state of the property market and the economy has contributed to a depressed market with fewer buyers. Consequently, we have not achieved the anticipated level of property sales.”
At the time of publication, the SOE’s results for the past three financial years were still not available. TransNamib spokesperson Abigail Raubenheimer tells the FM they should be published within weeks.
Says Van Jaarsveld: “Looking to the future, our primary focus will be on moving break-bulk freight. Namibia’s vast natural resources, along with the growth of new industries and ports and neighbouring countries, present significant opportunities for rail transportation.
“We aim to focus on transporting products within the energy and mining industries, as these sectors will drive much of the demand for rail services.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.