New Era Newspaper

New Era Epaper
Icon Collap
Home / Smith: EY report a witch-hunt

Smith: EY report a witch-hunt

2023-03-16  Edward Mumbuu

Smith: EY report a witch-hunt

Outgoing TransNamib CEO Johny Smith has washed his hands off and absolved himself of any wrongdoing during his troubled tenure at an
entity now on the brink of collapse. 

This is despite a forensic report by audit firm Ernst and Young (EY) implicating Smith and his executive team in numerous allegations of maleficence and mismanagement at the struggling entity.

Now in his last month, Smith says the EY report is simply a “witch-hunt” by adversaries.  

“Unfortunately, the way the EY wrote, there’s been a lot of disclaimers. So, one can see there was a witch-hunt towards the executives. I am very comfortable that I have done nothing wrong at TransNamib,” he stated emphatically. 

Back in 2020, erstwhile public enterprises minister Leon Jooste sanctioned an investigation into TransNamib’s dealings, following a myriad of allegations of harm at the struggling entity.









As extensively reported in this paper, the EY report recommended that the finance minister considers disciplinary action against executives who received generous bonuses, while the company was struggling to pay creditors. The payments were made without the knowledge of TransNamib’s executive for finance, and there was also no performance management system in place to gauge output.

Four TransNamib executives earned N$700 000 in performance bonuses in
2019, to the exclusion of ordinary employees. 

Reaction sought from the finance and public enterprises ministry yielded no results as questions were not answered prior to publication.  Also, while speaking during an interview on the public broadcaster’s popular talk show ‘One on One’ aired on Tuesday, the departing Smith painted a gloomy picture of the rail transporter. 



Smith does not see how the struggling company will survive without the government’s funding beyond the current financial year. It is a reality that the TransNamib employees, management, board and shareholder [government] are alive to, he noted.  This follows the Treasury’s decision not to allocate a single dime to the cash-strapped entity during the current financial year. 

According to the 2023-2026 estimate report from the finance ministry, TransNamib was allocated nothing for the 2023-2024 financial year, while a paltry N$50 million is set aside for the next financial year.  

To take TransNamib back to its former glory, the company needs N$2.6 billion to finance a five-year business plan, which was launched in 2018.

For the better part of his five-year stint at the troubled rail entity, Smith was preoccupied with boardroom wars, getting the business plan approved and financed, and confronting an angry workforce. 

“It’s going to be very difficult. I cannot see how TransNamib will survive the new financial year without any funds from outside. To a large extent, over the last five years, we’ve been firefighting. But we have also made progress in certain matters. But we still require a lot of resources from the government,” he stated. 

“There is no provision in the budget for TransNamib for operational funding,
which is going to be very difficult for the company, bearing in mind the challenges we go through on a monthly basis,” he said, adding that the company cannot currently provide efficient services and generate adequate funds. 

At the moment, TransNamib records N$10 million in monthly losses. 

The company needs at least N$15 million a month to operate smoothly. 

He continued: “In simple terms, we don’t have sufficient locomotives and wagons to move the freight and generate the income that we need on a monthly basis.”

Whether perceived or true, there is a view held by certain quarters that strategic government entities like TransNamib, the Meat Corporation of Namibia and NamPower are being deliberately starved of resources to advance private interests. 

When this was put to Smith, he was cautious, as he does not have evidence to either support or dispute the claims. 

“That’s difficult to say from my side. What I always say is we do need more resources like TransNamib in terms of the rolling stock and the other leg, which is the infrastructure that belongs to the government,” he observed.



Presently, TransNamib only moves around eight trains a day, while the ideal number is supposed to be 20 a day. 

“How can you be operationally profitable if you run locomotives, most of which are 60 years old? How do you maintain it? The parts are not available,” he lamented. 

Another challenge is TransNamib’s property portfolio, which has not been
well-maintained for over two decades.  

One of the legacies he will leave behind is the recently-approved N$2.4 billion loan facility from the Southern African and Namibian development banks, with a government guarantee. 

“We have amended the plan, and that’s the plan I will leave the company with in terms of the way forward… at least we can now plan to acquire that rolling stock, based on the funding that was sourced,” he said. 

Smith leaves the entity at the end of this month, despite being given an offer to extend his stay for a further five years.

Asked why he rejected the offer as it could  have enabled him to implement the business plan which was central to his endeavours, now that the funds are available, the seasoned executive cited personal reasons.

He will not stay to see the proverbial promised land. 

“For the last five years, I’ve tried my best based on the resources that were available, more so in terms of sourcing the funding. The plan was [only] approved a year after I started. It also took me up till March last year to get the funding, and it was only approved last week. So, for five years, I was just trying to find the required resources for the rolling stock.

So, I believe that in terms of my five years, maybe not achieving everything that I wanted, but the limitations in terms of the environment in which I operated and limited resources, I’ve done my best, and I’ve made a personal decision to move on… it also allows someone else to come in,” he reasoned. 



Additionally, the outgoing executive revealed that the government is looking into the viability of TransNamib’s privatisation. 

“The Ministry of Works and Transport is currently doing an institutional study, which focuses on what is the way forward for the railways, looking at infrastructure on the one side and train operations on the other side. It speaks to that [privatisation] in terms of what needs to happen. So, that institutional framework is being prepared at the moment,” he said. 

According to Smith, global trends show that if governments are struggling to finance public enterprises, they look at privatisation as an option. 

“Even in South Africa, they have just opened up for the private sector in a big way. So, maybe these are the opportunities to look at in terms of filling certain gaps of the railway line to help support TransNamib in the interim,” he added.

2023-03-16  Edward Mumbuu

Share on social media