Challenges Facing Gaborone Container Terminal (Gabcon)
30 March 2008

For several months now, Botswana Railways has been experiencing a number of operational and commercial challenges at Gabcon, mainly due to inadequate number of off loading equipment and a high level of equipment failure.

As a result, containers have been delayed, causing major inconvenience to customers. Botswana Railways recognises that the knock-on effect of this operational failure at Gabcon, has been huge, and adversely affecting customer cash flows and loss in productivity. On   Botswana Railways system, this has also caused congestion, backlog and further disruption.

Botswana Railways management is greatly concerned about this situation, and wishes to apologise for this inconvenience, and further inform our valued customers and other stakeholders on the progress being made in resolving these challenges.

Due to corporate governance requirements, Botswana Railways has been in extensive dialogue with Transnet Freight Rail (formerly Spoornet) a joint shareholder at Gabcon, to map a strategic way forward. Regrettably Transnet Freight Rail has indicated that they are severely constrained to participate fully in the  joint venture due to various reasons but have given Botswana Railways a go ahead to implement a number of actions designed to fast track the following  improvements at Gabcon.

• Botswana Railways has been mandated to fully corporatise Gabcon as a fully fledged independent commercial enterprise company run on clear business lines.
• Botswana Railways will in the near future constitute an interim Board of Directors with full executive authority on behalf of the joint Partnership to give strategic guidance to Gabcon.
• Gabcon (Pty) Ltd will identify and appoint an industry expert as Managing Director with full delegated management authority to run this business. In the interim, Botswana Railways has appointed an incumbent to act in the position of Managing Director.
• That the management structure at Gabcon be urgently, reviewed with a view to strengthen it at a senior management and other functional levels.
• That a holistic turnaround and repositioning strategy be submitted for the interim Board’s consideration as soon as such Board is constituted. This will take into account other industry recommendations that have been made with a view of forming Gabcon into a modern container terminal, taking into account other national strategic considerations. e.g   development of a  national freight logistics hub/freight village.
• At an operational level, Botswana Railways has in the interim, placed an order for two Hyster Reach Stackers for the terminal. These will be delivered by end of August 2008. It is anticipated that this equipment will go a long way to improving current equipment availability. Management is also seeking to hire such equipment where available in the industry, to increase capacity.

Botswana Railways will continue to monitor the situation closely and continue to inform our customers accordingly.

Issued by
A.R Lunga
Chief Executive Officer