08 Dec 2018 13:20pm
WINDHOEK, 08 DEC (NAMPA) A new business model is being formulated for Air Namibia to ensure that the State-owned entity breaks even within three years.
The implementation of such a model could result in savings of around N.dollars 1 billion per year, Minister of Public Enterprises, Leon Jooste said in a media statement issued Friday.
Jooste was responding to an article in a local daily newspaper on a draft report titled Fiscal Risk Statement released last month, in which the International Monetary Fund warned that Namibia risks remaining at junk status.
He said a team of consultants were appointed under the Technical Committee of the Cabinet Committee on Public Enterprises and a final report with recommendations was expected during the first quarter of 2019.
Jooste also indicated that the last decision-making Cabinet meeting on Tuesday approved the new TransNamib integrated strategic business plan which will be implemented immediately to enable the railway entity to become a competitive bulk transport service provider once upgraded infrastructure is in place.
He said despite a significant debt burden, the company has the ability to become profitable over the medium term while it unlocks economic development in the country and Southern African Development Community region.
An efficient TransNamib will unlock the large investment made in the Walvis Bay Port expansion project, resulting in a positive knock-on effect for Namport, Jooste stated.
In the case of NamWater, the minister said it was not possible to entirely commercialise bulk water provision in a developing economy like Namibia.
He added that the water utility had performed well despite challenging circumstances, however the current debt situation is largely due to the additional costs associated with the Neckartal Dam project for which NamWater should not be blamed as the project was not implemented by NamWater.
The real issue I wish to highlight is the current inability to implement the appropriate governance infrastructure to facilitate the expedited implementation and evaluation of the various strategies to transform the Namibian public enterprises, Jooste stated.
The Public Enterprises Bill of 2018, which is under review in Parliament, will allow for the Ministry of Public Enterprises to exercise its mandate and embark on actual reforms.
I believe that planned targeted interventions have the potential to generate a positive net effect of close to N.dollars 4 billion within a period of less than two years, but this will only be possible once the Public Enterprises Governance Act has been promulgated, he said.
Jooste in October tabled the draft Public Enterprises Governance Bill which, once enacted, will make provision for the efficient governance of parastatals and provide for powers of the minister.
It will also make provision for the restructuring of parastatals, monitoring of their performance and incidental matters.