Wednesday, May 22, 2024

BR in assets striping exercise

The embattled Botswana Railways is to embark on a massive assets stripping exercise involving the deposal of a fleet of its locomotives, passenger train coaches and livestock wagons through an open-cry auction.

The latest move is likely to push the already embattled organization closer to liquidation if an alternative strategy aimed at saving the railways is not found soon.

In an announcement made last Friday, Botswana Railways said it is inviting local and international buyers to submit tenders for six locomotives that it is planning to dispose off.
Further, BR said it is selling 45 passenger train couches, 23 livestock wagons, one railcar and seven guard vans.

“Bids should be submitted in plain, sealed envelopes and marked “DISPOSAL OF RAILWAY EQUIPMENT” and are expected to be submitted by August 14, 2009,” Botswana Railways said.

BR has been run on a free-wheeled spirit for years and mid last year a forensic audit by Delloitte & Touche found that there have been systematic weaknesses, conflict of interests and a terrible culture of poor corporate governance at the organization.

The forensic report’s release coincided with the Board and management of Botswana Railways attempts to squeeze P 3 billion from government in a bid to recapitalize the seemingly plundered organisation.

The report cast doubts on the long term sustainability of Botswana Railways, pointing out there is total collapse of control environment in the organization.

“In almost all aspects of our view, it was clear that even some of the basic financial controls are either not adhered to or inconsistently applied,” the report said.

Key findings of the report are that finance and procurement controls are generally ineffective; the supplier database contains incomplete and inaccurate information; authorization levels to this database are not properly restricted and maintained thereby making it difficult to distinguish between valid and invalid transactions.

“There appears to be a major problem in recognizing revenue due to BR. The current system does not ensure completeness of revenue and, as a result, BR is exposed to risk of loss of revenue, fraud and theft,” the auditors said.

It further pointed out that the organization has extensive assets under its control but assets control measures were weak, with important documents to the control environment not sequentially numbered.

“Due to this weakness in the validity, accuracy and completeness, some transactions cannot be determined. This has created a situation where valid and invalid transactions cannot always be distinguished from each other, thus exposing the organization to significant fraud risk. We did not find the culture of compliance and discipline in applying controls,” the auditors said.


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