NAMIBIA: TURBULENT SKIES AND RICKETY RAILS

UNCLAS SECTION 01 OF 03 WINDHOEK 000038 SENSITIVE SIPDIS DEPARTMENT PASS TO DOT/FAA FOR CONNIE WILSON HUNTER DEPARTMENT PASS TO USTDA FOR KATHRYN DORMINEY E.O. 12958: N/A TAGS: ASEC EAIR ECON ELTN PGOV WA SUBJECT: NAMIBIA: TURBULENT SKIES AND RICKETY RAILS Summary - - - - ¶1. (SBU) A recent spate of small aircraft accidents has highlighted the poor state of the Namibian private aviation sector. Industry insiders point to the lack of proper oversight as a key weakness. Members of the Directorate of Civil Aviation (DCA) acknowledge that they lack sufficient air traffic controllers, inspectors, and other critical personnel to carry out the DCA's mission of regulating Namibia's aviation industry. While some charter airlines and private pilots clamor for greater oversight, others take advantage of the vacuum raising the risk of more serious accidents. The installation (in 2010) of the country's first aviation radar system may bring some needed relief. But, the lure of better-paying jobs overseas for Namibia's few qualified air traffic controllers presents the DCA and the industry in general a much tougher challenge to overcome. As tourism plays an increasingly vital role in the economy, Namibia can ill afford a major aviation accident. ¶2. (SBU) Aircraft accidents always grab the headlines, but problems on the railways are now creeping up to the front pages. A creaking rail infrastructure, new Chinese locomotives out of service for over three years, and lack of planning could potentially derail one of the Namibian government's (GRN) major economic development plans. The GRN wants to transform the port of Walvis Bay into a major transshipment hub for all of southern Africa. However, as the port expands the current rail infrastructure will not be able to carry the load. The rail system and state-owned rail company TransNamib suffer from political interference, lack of expertise, and inadequate funding. The GRN is seeking experienced foreign railway planners to draw up the master plan required to turn Namibia's rickety rails into the modern rail infrastructure it needs to carry the region's cargo. Nevertheless, the GRN still prohibits foreign companies from investing in state-owned enterprises. Foreign experts will likely shy away from trying to help TransNamib if the company remains hamstrung by investment restrictions and government interference. End Summary. A Bumpy Start for the New Year - - - - - - - - - - - - - - - - ¶3. (U) The new year has just begun, but Namibia has already witnessed two small aircraft accidents. A Cessna 172 crashed in a Windhoek neighborhood on January 7, and both pilot and passenger escaped with minor injuries. On February 3, a Jairibu 400 crashed shortly after take off from Windhoek's Eros airport. The pilot, with 35 years experience, and the passenger sustained severe injuries and remain hospitalized. There were six significant aircraft accidents in 2008, the most serious a January 11 crash which killed five passengers and the pilot. According to the Directorate of Civil Aviation (DCA),air incidents have risen steadily since 2005, when there were 78 cases. In 2006 there were 83 cases, and 89 in 2007. The DCA claims human error contributed to most incidents. Controllers Wanted and Radar Too! - - - - - - - - - - - - - - - - - ¶4. (SBU) According to several aviation charter company operators, Namibia lacks sufficient numbers of air traffic Controllers, aircraft inspectors, and trained aircraft mechanics. Ray Rothlisberger, CEO of Sefofane, one of the larger charter companies, told econoff that the DCA has "no teeth and no people." Rothlisberger stated that seven of 28 air traffic controllers had resigned in 2008, most going to South Africa and Dubai for better pay. Even with all 28 controllers, the DCA was understaffed. Harold Hange, President of the Namibia Air Traffic Controller's Association (NAMATCA) in a recent press interview echoed the comments of the charter companies, stating "We should have a staff of 60 air traffic controllers working our country's airports, but we only have 22." He added that controllers must work 12-14 hour shifts, while guidelines state shifts should not exceed eight hours. Hange noted controllers can earn three to four times as much in South Africa as they do in Namibia. ¶5. (SBU) Minister of Works and Transport Helmut Angula announced on December 9, shortly before an ICAO team was arriving in Namibia for a routine inspection, that the government had approved the purchase of a radar system. According to a January 16 press release, the French company Thales announced it had been selected to be the prime contractor for the modernization of Namibia's Navigation WINDHOEK 00000038 002 OF 003 Surveillance and Air Traffic Management capabilities. The contract is estimated to be worth USD $17.5 million. The GRN estimates that it will take 15 months to install the radar system. GRN officials hope the radar will be ready in time for the 2010 World Cup in South Africa. Lax Oversight Leads to Risky Behavior - - - - - - - - - - - - - - - - - - - ¶6. (SBU) Hans Wiehan, CEO of Namibia Commercial Aviation, told econoff that DCA officials simply lack the aviation industry experience required to understand their role. Wiehan noted DCA officials often "over regulate on small insignificant things" and do not address important issues. One charter company official noted that an aircraft inspector reviewed one of his planes for five minutes and determined it was airworthy. The inspector, however, reportedly had never seen the make and model of the plane before. Rothlisberger noted that the DCA had not conducted a substantive audit of his company in three years. He remarked that lax government oversight has led some charter companies to cut corners, such as putting newly minted commercial pilots into the air without adequate on-the-job training. ¶7. (SBU) The lack of proper aviation oversight appears to be leading to riskier piloting. A January 15 newspaper article in the daily "The Namibian", noted that some pilots are acting like "cowboys" and not respecting aviation guidelines around Swakopmund, a coastal city which attracts many tourists. For several months Swakopmund's airfield lacked an air traffic controller, but even when one was on duty, pilots routinely ignored control tower instructions, often flying too low on fly-bys. DCA Not Fully Equipped for the Task - - - - - - - - - - - - - - - - - - ¶8. (SBU) Acting Director of Civil Aviation Angeline Simana-Paulo, at a December 10 meeting with econoff, acknowledged the challenges cited by the charter companies and the Namibia Air Traffic Controller's Association. She noted her own lack of aviation experience and recognized her agency still has vacancies in many key positions. For instance Windhoek's lead air traffic controller, recently promoted to the position after two years on the job because her predecessor had left for South Africa, confirmed that lack of staffing and radar seriously strained her fellow controllers. Simana-Paulo will soon be leaving the DCA to return to her previous post within government. Her assignment was always considered temporary, until permanent DCA Director Mr. Bithuel Tijao Mujetenga returns from his stint as Namibia's representative to ICAO. The Bumpy Skies to the Rickety Rails - - - - - - - - - - - - - - - - - - - ¶9. (SBU) While Namibia's aviation sector has garnered much attention with its small private aircraft too frequently falling from the sky, Namibia's railways are also receiving greater scrutiny. Passenger service on TransNamib (the state-owned rail company) has plummeted as the company has had to close down routes because of rail infrastructure problems. A January 12 fire that completely destroyed a passenger car has only added to TransNamib's woes. ¶10. (SBU) Labor unrest and out of service Chinese locomotives have crippled TransNamib's productivity. A strike in August 2008 highlighted Namibia's dependence on its rail infrastructure. The strike is estimated to have cost the country close to USD 22.5 million in lost revenue. Until 2003, TransNamib operated only General Electric (GE) locomotives. Since then it has purchased 21 Chinese locomotives which have proven to be a headache for TransNamib. Several Chinese locomotives are currently off-line awaiting parts; some have been out of service for up to three years. This has not been a problem with the GE locomotives TransNamib still maintains, according to company sources. ¶11. (SBU) The GRN intends to use TransNamib as a critical link in its plan to turn the port of Walvis Bay into a major regional transshipment point. Many European and American products can reach Southern African Development Community (SADC) countries faster and more efficiently via Walvis Bay than through other major ports in the region. The GRN is investing over USD $500 million in port expansion projects. To promote Walvis Bay as a major regional hub, the GRN has formed a public-private partnership called the Walvis Bay Corridor Group (WBCG). However, the expansion and promotion WINDHOEK 00000038 003 OF 003 of the port of Walvis Bay seem to be outpacing the rail infrastructure's ability to handle cargo. TransNamib Acting CEO Mike Kavekotora told emboff that some stretches of track linking the north to the critical port of Walvis Bay are so dilapidated that they may not last more than two more years. WBCG Business Development Executive Johny Smuts told emboff January 20 that while investment is critical, the lack of experienced railway managers to develop a master plan for the rail sector is what stands between the WBCG's dreams and reality. ¶12. (SBU) The smaller port of Luderitz also faces railway connection issues. According to the press, 47 kilometers of rail connecting Luderitz to the main rail line need rehabilitation, but the Ministry of Works and Transport does not have adequate funding for the project. According to Works and Transport Minister Helmut Angula, the GRN will shift funds for existing railway projects in the north to handle the Luderitz line. The GRN is also contemplating a 300 million Namibian dollar (USD $30 million) soft loan from China to finance the northern railway extension project. According to press reports the Chinese are seeking construction contracts in exchange for the loan. (Note: Minister Angula has publicly raised concerns about Chinese construction projects, lamenting that Chinese companies choose not to employ "African workers, because they have a different culture" and that Chinese companies wish to use Chinese construction materials, instead of locally (or African) sourced products. Other cabinet ministers have in the past expressed their concern over Chinese companies winning government contracts despite reported noncompliance with tender requirements and labor laws, but none have made statements as forceful as Angula's recent comments. End Note). Comment - - - - ¶13. (SBU) Anemic planning coupled with few skilled (trained) workers and low levels of investment could scuttle the GRN's plans to use the aviation and rail industries as catalysts for Namibia's economic growth. Tourism plays a significant role in the Namibian economy, representing well over 10 percent of GDP. The government is banking on the tourism sector growing to 20 percent of GDP by 2018. The cumulative effect of additional small aircraft disasters could damage the government's ambitious plans for the tourism sector. ¶14. (SBU) Meanwhile, the GRN is well aware that the ongoing problems with the country's rail infrastructure could crash the government's plans for Walvis Bay. Most of the business community and some government officials recognize that the GRN cannot transform TransNamib and the rail infrastructure without attracting significant investment and expertise, some of which will likely have to be foreign. On January 29, Minister of Works and Transport Helmut Angula acknowledged publicly that lack of funding, lack of expertise, and political interference is crippling TransNamib. At the request of Angula's Deputy last fall we provided names of retired U.S. rail executives who might be willing to spend three to five years reinvigorating TransNamib and helping the country devise a long-term rail infrastructure plan. While the GRN may be reaching out for foreign expertise, there is no evidence that there is the political will to change the government's prohibition on private investment in state-owned enterprises such as TransNamib. Government and business officials have privately told emboffs that any such change will not happen until after the 2009 national elections. Until then, political interference and lack of investment will continue to cripple TransNamib as foreign experts will likely shy away from trying to help a company which is hamstrung by its own government. End Comment. MATHIEU