National Oil Company of Malawi (Nocma) is failing to recover $1.3 million [about K1 billion) it loaned to Malawi Cargo Centre Limited (MCCL), a senior official has said.
Malawi Government has 18 percent shareholding in MCCL, with the remainder being held by private investors.
Nocma Deputy Chief Executive Officer Hellen Buluma said the amount was used to rehabilitate the centre’s facility in Tanzania. The works included the rehabilitation of tanks and pipelines.
This came out during a meeting with members of the Parliamentary Committee on Natural Resources and Climate Change (PCNRCC). Committee members also met with Ministry of Energy, Malawi Energy Regulatory Authority and Petroleum Importers Limited officials to discuss issues to do with fuel.
Buluma further told the committee that the agreement was that the money would be repaid within five years from 2018, but no payment has been made so far.
It transpired that MCCL engaged Dalbit International Limited on November 24 2015 to carry out rehabilitation works, one of the terms being that Dalbit would recover rehabilitation costs through the use of the facility for five years.
Buluma indicated that the agreement was reviewed in 2017, leading to the termination of the contract which required MCCL to pay Dalbit.
“MCCL had no money to pay back Dalbit at that time. The Malawi Government instructed Nocma to pay Dalbit on behalf of MCCL on the understanding that MCCL would pay Nocma in instalments for five years,” Buluma said.
Nocma paid the amount in 2018 but MCCL is yet to pay the amount despite the facility being operational, with the centre being used to lift 31 million litres of fuel since the works were completed.
Buluma said, as one way of supporting the centre, in recent fuel supply tenders, Nocma put the usage of MCCL facilities as a precondition for award of contract through the port of Dar es Salaam.
Nocma has since indicated that it would be engaging the government on the matter.
Secretary for Energy Patrick Matanda said the ministry was aware of the issue, further indicating that it would, if necessary, intervene in the issue.
He said the ministry was hopeful that the agreement that the two sides signed would be honoured.
PCNRCC Vice Chairperson George Million said MCCL was obligated to pay back the money.
Construction of the facility started in 1989 and ended in 1991.
However, it was decommissioned in 2015 to pave the way for rehabilitation works before being reopened in 2018.
Mathews Kasanda is a journalist who holds a Bachelor of Arts in Journalism from University of Malawi (The Polytechnic).
In 2015, Media Institute of Southern Africa awarded him the Best Print Media Education Journalist of the Year accolade.
He joined Times Group Newsroom in September 2019.