The ton-kilometres transported by rail rose to about 6,2 thousand million in 1980 but declined to 4,9 thousand million in 1983  [73] (Nett ton km in 1992/93: 1 108 754 071). Assuming an average haul of 1.000 to 1.150 km this suggests a tonnage of about 5 to 6 millions in 1980 and 4,3 to 5 millions in 1983. A 1978/79 figure of 2,9 millions t and 171.000 cattle or about 3 millions t apparently relates to cargo loaded in Namibia. Correcting for imports crossing the border at Nakop would give a total tonnage carried figure of about 5 millions t. The data suggest a minimum of 4,75 and a maximum of 5,5 millions t carried [74].

A rough estimate of possible 1983 tonnage is shown in above table. This suggests a total tonnage of the order of 4.500 millions. Of this total 2.900 millions or 65% were imports, 850 millions or 19% were exports and 750 millions or 17% were local traffic. The official statistics (shown in the next table) sketch a different picture of a peak tonnage in 1981/82 of only 3,5 millions t.

Implicitly the traffic (1983) was about 2,5 to 2,75 millions t from Nakop to Mariental and 3 millions t into Windhoek on the main line. On the Walvis Bay - Usakos stretch of the second main line it was 1,1 to 1,25 millions t. Windhoek - Usakos carried probably about 2,5 millions t and Usakos - Grootfontein/Otavi/Tsumeb perhaps 1,5 to 1,75 millions t. The Lüderitz and Gobabis branch lines carried about 25 thousands t a year each and the Outjo branch line rather less [75].

These statistics show that the rail traffic has decreased in the years before and after Namibian independence. This tendency will continue in the foreseeable future, especially due to new transport trends in Namibia and the creation of the new east-west transport axes, viz. the Trans-Caprivi and Trans-Kalahari highways.

Above statistics also show the unfavourable transport situation which, as long as the Trans-Caprivi and the Trans-Kalahari transport links are not functioning, is directed to Nakop and South Africa. These statistics were used by the South-Africa appointed "Advisory Council for Transport Matters in SWA/Namibia" in 1986 to motivate the retrenchment of the "unimportant" branch lines: Otjiwarongo-Outjo, Gammams-Gobabis and Seeheim-Lüderitz which are all east-west running lines which could be the starting point for the future east-west directed Namibian transport system.

But, Southern Africa's transport world changed between 1986 and 1993. In 1993 Namibia's past "noose or lifeline" transport situation could have quite another dimension. Strangely enough, it is now South Africa which has indicated to terminate Namibia's "noose or lifeline" position by questioning the further viability of the Nakop to Upington railway line, Namibia's only railway access to South Africa (October 1993). This intimidation consists of the treat of the South African "Spoornet" to close down the railway section Upington to Nakop or to shift the financial responsibility unto Namibia shoulders "because this section only serves Namibian interests" [77]. This threat has especially to be considered under the situation of the completion of the Trans-Kalahari-Highway which will reduce the distance between Windhoek with the South African Reef with approximately 500 km. But, it has also to be investigated whether South Africa's unexpected threat to close a railway line between two neighbouring countries is only another political manoeuvre to pressurise Namibia. In any case, this threat must not be taken too serious because it is against South Africa's assurance to participate in the "Southern African Development Community" and must be seen under the new political dispensation in South Africa.

An examination of the cargo make-up and routing explains why the Namibian rail network had both high charges by class of cargo and huge losses before 1988 [80]:

a) Most of the cargo was and still is in low rated categories (e.g. coal, cement, sand and gravel, fertiliser, ore and concentrates, grain, live cattle) which do not cover fully cost anywhere in the world.

b) Most of the cargo routed via Nakop should on cost efficiency grounds go via Walvis Bay. This is even assuming continued South African dominance in sourcing and - by volume -marketing. This would be even much more for the shift to more optimal trade patterns which were started after independence.

The claim of the South African Transport Services that it lost R 90 million per annum on rail services in Namibia in 1984/85 is not necessarily to be taken too seriously. Expenditure relating to the Namibian system (including overhead and repair charges) may well have been of the order of N$ 190 million and revenue N$ 100 million but the operation of the Namibian system most probably reduced losses on the North-West-Cape lines (De Aar Junction- Upington-Nakop), raised general operating surplus (main lines from Cape Town, Eastern Cape, Free State and Witwatersrand to De Aar) and covered system overheads of the order of at least N$ 30 to N$ 50 million. In any event the loss was not, as South Africa claimed, an act of generosity to Namibia because:

a) South Africa ran it whole rail network at a loss for reasons of general and specific economic policy.

b) The beneficiaries of the losses were first and foremost South African producers and consumers, concentrate smelters and importers - in many cases at the expense of Namibian producers and consumers.

c) Since RSA interconnected its system with Namibia's in 1915, there was always a strong South African "security" (military) concern both with actual military cargo and with safeguarding the white community in Namibia [81].

However, TransNamib Limited achieved after the independent operation of the Namibia railways after 1988 very quickly break-even and even positive results.

It was foreseen that at the Namibian independence the rail system could face severe transitional problems. These could include:

a) loss of cargo e.g. - military including military fuel probably of at least 1 million t.

b) diversion of traffic from the Nakop route to South Africa to the east-west line to the sea ports of up to 2 millions t.

c) possible loss of traction power and rolling stock which might be transferred by SATS to South Africa.

d) probable exodus of most white employees (basically expatriates on SATS contracts, not "white" Namibians).

e) lack of maintenance and specialised headquarters in Namibia.

f) existing heavy losses.

This scenario has only in parts realised after the Namibian Independence on 21 March 1990. The future prospects and strategies will be analysed in the next section of this study. For the early nineties the following developments can be established:

In analysing above traffic yields the following traffic flows can be established:

Approximately 70% of the railway traffic (table 3) is domestic traffic including the traffic to the Port of Walvis Bay. In contrast to the pre-independence scenario (table 1) the import quantities by rail from South Africa have reduced to approximately 25% and the exports into South Africa to 5 %. The domestic rail traffic to Walvis Bay can be estimated with 2/3 = 0,750 million tonnes. It consisted mainly of fuel (380.000 t) and coal (140.000 t). Further important commodities were: pyrite (different sources and destinations); copper and zinc from Tsumeb; copper and lead from Rosh Pinah (via Ausnek), Kombat and Otjihase (via Hoffnung); as well as feldspar from Otjikango [82].

The rail imports from South Africa can be estimated with 0,420 million tonnes and consisted mainly of lime and cement (190.000 t) and containers (90.000 t). The rail exports consisted mainly of zinc concentrates from Rosh Pinah (via Ausnek) and fish meal from Walvis Bay (25.000 t). Thus, the rail traffic to and from South Africa is highly unbalanced.

Traffic flows by road can only be established with difficulties due to a lack of present-day data. TransNamib Road, the biggest road haulier in the country had a relationship between log-distance and short-distance traffic of approximately 0,75 to 0,25. The traffic portion with South Africa could be estimated with less than 10 % and the traffic with other countries with between 1 and 2 %, due to the political situation in Angola and the economic weaknesses in other countries like, for instance, Zambia. Between Walvis and Zambia exists a combined railway/road traffic via the Trans-Caprivi Highway and with transhipment in Grootfontein with 2.500 tpa copper imports from Zambia and 2.800 tpa salt exports from Walvis Bay.

The vast majority of the world’s railways have faced a vicious circle of declining market share [83]:

Between 1980 and 1990, for instance, 19 of 33 railways with comparable data had operating costs higher than total revenue (including government subsidies). This deficit increased over most of the 1980s in 14 out of 31 comparable cases [84]. Since 1990, several railways have improved their revenue to cost ratios, but this and other financial indicators remain unfavourable for many of the world’s railways.

An important point which has to be taken into consideration is the efficient solution to the railways as "Natural Monopolies". Different answers are possible in order to tackle the railway problem:

Whatever form will be selected the new railway authority has to be run on commercial principles with "PSO"-requirements where needed and with company formats to avoid sluggish bureaucracies. The market has to take the lead. This means two different ways doing it:

There are four points to achieve this:

1. The method to organise the Railway Company;

2. Organisation format: privatisation;

3. De-integration (not Dis-integration) of operation and infrastructure;

4. By organising internal competition.

The terms of condition to provide a public service are a political function for the Government and cannot be done by the trade unions alone. The relations between the public authority and the railway company has to be designed in such a way that "Public Service Obligations" are not becoming a burden to the company. Cost recovery is here an important parameter.

As far as commercialisation or privatisation are concerned it has to be differed between "legal privatisation" by creating a limited company and "real privatisation" by holding the equity by the state or by private entities. The latter is more important than the former. By "real privatisation" cost efficiency will e increased by higher productivity as well as better performances, services and increased attractiveness of the railways. Other important parameters are safety, environmental and interoperability arguments. Partial privatisation by sub-contracting can be envisaged. The ownership issue is not the key issue because efficiency can be enhanced even if the company is fully state-owned (Japan example). But, the Government has to play the game, otherwise full privatisation is the answer.

As far as "de-integration" between infrastructure and operation is concerned there are several observations to be made:

In the "railway game" there are no miracles. Change is inevitable bur the change has to be tailor-made for every country. The major challenge for the Government is to level the playing field between road and rail.

As far as Namibia’s railways are concerned, Namibia is no exception in case.

Source: Pereira, A.F.: Human Resource Issues and Challenges in Railway Restructuring Processes, Rabat, 1996

How can these inevitable changes be translated into the Namibian railway pattern. Here it has to be observed that Namibia is quite unique in the way that the Namibian railways are different to all other railways in the world. The following keynotes are valid:

It has also to be observed that in general terms TransNamib Rail operates well and efficiently, and certainly better than the majority of railways in sub-Saharan Africa. There are nevertheless areas which do not function optimally, primarily in the areas of business management, strategic planning and financial transparency. The lack of vision to design better services and to increase the railway performance is another obstacle. There are also areas of management overlap between TransNamib Ltd, TransNamib Rail and TransNamib Carriers which can lead to inefficiency, particularly in customer relations [85].

On the foundation of these basic parameters the framework for the restructuring of Namibia’s railways has to be designed.

The Act ruling the operations of the Namibian railways (Act 21/87) gives full power to TransNamib Limited to provide transport "in the national interest" and to run the Namibian railways without interference by the Government of Namibia (GRN), to supply the necessary services and set the tariffs. The Government of the Republic of Namibia (Cabinet) only has the power to approve new railway lines and compensate on loss-making services (Public Service Obligation (PSO)). The role of the owner (Government of Namibia) and the realisation of "national interests" as promulgated by the Government is presently not clearly defined. Further questions which are not defined are the influence of the Government as far as poor performance of TransNamib Limited and transparency between the different modal transport business units are concerned. Transparency is hampered by the effects of cross-subsidisation and is not open to public scrutiny although the company is fully owned by the Namibian Nation..

The principle of reserved goods as stipulated in Act 21/87 had only limited success to protect the railways but rather protected instead the "old-order, mainly South African based" road carriers in the past. This principle is contrary to the stipulated policy objectives of the Government to promote deregulation and free competition. Instead of a reserved goods system a free regulatory system with a "level playing field" (fair and comprehensive road user recovery system) should be created. These problems were addressed by the Government by a "White Paper on Transportation in Namibia". This new national transport policy in Namibia was approved by Cabinet on 4th October 1994.

The "White Paper on Transport Policy in Namibia" [86] which contains Namibia's new transport policy has established that the current railway operations are sustainable on current levels. There are no cash-flow problems due to the clean start of TransNamib in 1988. It has been further analysed by the White Paper that railway traffic will further fall during the 1990s, although it is predicted that the rail volumes will be constant on the 1990/91 level for the next five years. The future railway traffic reductions are due to the completion of the Trans-Kalahari-Highway and the deregulation of road transport (7% after 1st year and 15% after 3 years). The result is that the real loss (including Group Administrative Expenses) is estimated to rise from N$ 12 million to N$ 27 million in 1995/96.

The new "Road User Recovery Scheme" [87] will result in an estimated 5% loss increase for road trucks and will benefit the railways. But, in spite of this it has been analysed by the "White Paper" that the future of the Namibian railways is not too good, if not to say bleak. Cash-flow problems will occur soon after deregulation. A possible consequence could be the scaling-down of the railway network.

The "White Paper" does not support any protectionist measures for the Namibian railways, for two reasons:

The result is that the Namibian railways can recover their costs with careful pricing strategies. TransNamib Limited (TransNamib Rail) can set prices which reflect short-run marginal costs and can recover all costs. With fair road taxation in place, efficient use can be made by both, the Namibian roads system and the Namibian railways.

The problem of the railway is the falling demand in railway services which is a function of a changing transport market. The problem is intrinsic to the railways and not road related. The "White Paper" does not recommend any basic change in the TNL-Act (Act 21/87). But the following change of policy viz. a viz. TransNamib Limited is envisaged:

In summary Namibia’s restructuring exercise for her railway system boils down to the following key points:

The basic idea is to create a company that transports freight and passengers and not to create a "railway company". It is thus clear: Change is inevitable. Railways, including the Namibian railways have to change and to be re-structured. Otherwise they will be withered away. But, each solution has to be tailor-made for every country.