By Cathy Maulidi
The Agriculture Committee of Parliament has changed tune on the East Bridge deal, advising the government to get fertiliser that is being offered by the company.
This comes after committee members met East Bridge Chief Executive Officer (CEO) Haim Tzutziashvili and Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) officials in separate meetings on the issue.
Last year, committee members ganged up against the East Bridge fertiliser deal and demanded investigations into the issue.
- Advertisement -
Now committee members say the deal is the best thing for Malawi.
- Advertisement -
“We have changed our position on the East Bridge deal after meeting all involved parties, including those from East Bridge itself,” said Sameer Suleman, chairperson for the committee.
According to Suleman, after meeting all stakeholders, they had realised that East Bridge was offering fertiliser at a good price and that the commodity was ready for distribution.
“At the moment, the government has signed contracts with close to 30 suppliers but there is nothing to show for it. This is November but we do not have enough fertilser to distribute to our farmers.
“SFFRFM has just told us that they only have 16,261 metric tonnes of fertiliser against the requirement of 104,489 metric tonnes. Now, why is government suffering, looking for fertiliser when East Bridge has it ready for supply?” Suleman queried.
- Advertisement -
He justified the U-turn.
“You remember that we were against the East Bridge deal but after meeting them, they have told us that they have fertiliser ready. They have told the committee that they have 60,000 metric tonnes ready in Lusaka, Zambia, and prices they are offering are better than those offered by other suppliers. They are offering $755 per tonne while the others are offering it at K1200 per tonne,” Suleman said.
The committee then urged government officials to issue Letters of Credit to East Bridge so that it could supply the fertilizer now and allow farmers access it.
Meanwhile, SFFRFM CEO Richard Chikunkhuzeni has said a Novation Agreement was signed, to the effect that SFFRFM should replace the Malawi Government in the share purchase agreement with East Bridge Estate SRL.
He said this was signed by the parties on June 4 2024.
“In the Novated SPA, SFFRFM is the purchaser; East Bridge Estate SRL is the supplier, East Bridge Commodities and Logistics Limited is an agent of East Bridge Estate SRL for purposes of receiving commodities from SFFRFM, and the Malawi Government is the guarantor of SFFRFM.
“As SFFRFM did not have financial resources for performing the Novated SPA, the Conditions Precedent to the Novated SPA becoming effective included the following: The government was to find a commercial bank to establish a $40 million Letter of Credit in favour of East Bridge Estate SRL; and the government was to put SFFRFM in funds for the purchase of the 600,000mt of fertiliser,” Chikunkhuzeni said.
He added that the time for fulfilling the conditions precedent expired, with the Conditions Precedent remaining unfulfilled.
He added that East Bridge Estate SRL had granted some extensions to the time for fulfilling the Conditions Precedent as well as proposed softening the two financial Conditions Precedent.
Chikunkhuzeni was quick to say it had not been practical for the government to fulfil them.
Chikunkhuzeni said as things stood, the Share and Purchase Agreement remained with the government, such that the government was better placed to comment on the matter.
When contacted, Agriculture Minister Sam Kawale refused to comment on the matters.
Meanwhile, committee members are scheduled to meet officials from the Ministry of Agriculture today to discuss the matters further.
Currently, SFFRFM has 53,997.50mt of fertiliser in its stocks and, out of that tonnage, 36,671.50mt are under collateral management and cannot used.
This means 16,261mt are the available stock.
