Wednesday, May 29, 2024

Sua Pan salt literally ate up BR profits

A Deloitte forensic audit report reveals how loss-making Botswana Railways wagons used to transfer Botswana Ash salt were corroded over a protracted period of time.

This is the science of it courtesy of a good online source: while salt is neutral, its ions are not. When calcium chloride is exposed to moisture, it dissociates into calcium and chlorine ions. The chlorine ions are what causes metal corrosion: combined with moisture in the air, chlorine ions form hydrochloric acid which dissolves the iron by stripping it of electrons. Since the iron is now short a few electrons, it becomes a positive ion, which then reacts with the remaining hydroxide group from the water molecule to form rust. That is the sort of chemical assault that 86 BR wagons were subjected to.

The wagons were part of a batch of 160 that was bought in 1991, a year after BR developed its “Operating & Maintenance Manual for BR Open Wagon for Transport of Salt.” The manual should have been adequate insurance against corrosion by salt and stated in explicit terms that the wagons should be overhauled every eight years. Deloitte investigators learnt from the Carriage and Wagon Manager, Jefferson Mmipi, that 86 of the original batch corroded due to the transportation of salt. From then BR Chief Executive Officer, Dominic Ntwaagae, the investigators learnt that the state-owned organisation has no in-house facilities to overhaul wagons and when the need arose, the wagons are sent to either Zimbabwe or South Africa.

“According to Mr. Ntwaagae, the Board did not prioritise the overhauling of wagons due to funding constraints and cost-saving strategies. Mr. Ntwaagae informed us that he was concerned about the wagons that were not overhauled and that he highlighted this to the Board during a meeting in 2003,” the audit report says.

The budget for that year didn’t include funds for the overhaul of wagons and “the Board didn’t take the necessary action to rectify the need for overhauling.” However, in an attempt to overhaul some of the wagons, BR did ÔÇô in that year ÔÇô enter into an arrangement with the National Railways of Zimbabwe to overhaul approximately 28 wagons as repayment for debt owed by the latter to BR. Ntwaagae also told the investigators that BR presented a turnaround strategy – which included a request for money to overhaul the wagons – to the Ministry of Transport and Communications. The request fell on deaf ears while the wagons continued to transport salt from Sua Pan over long distances. The amount of money that was used to buy the wagons is not stated but through such lack of money, BR lost a fleet of 86 wagons to salt.

Against the background of what Ntwaagae said, the investigators made a quite astonishing recommendation against Mmipi: “We are of the view that Mr. Mmipi did not act in terms of his job description once he took over the position as he did not maintain the wagons properly.” The investigators recommended that disciplinary action be taken against him.

The audit was carried out in the latter part of 2012 and its report submitted to then Board of Management Chairperson, Satar Dada, in January, 2013.


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