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Financial mismanagement derails sugar project

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Mismanagement of finances for the installation of sugarcane irrigation facilities in Salima has negatively affected what is expected to be a major Greenbelt Initiative project.

Meanwhile, work started three years ago but the contractors suspended their operations last year at 85 percent completion due to failure by government to pay them.

The project was running simultaneously with the construction of a sugar processing facility. But with construction of the facility in its final stages, and expected to be completed by the end of this month, there is no sugarcane that can be sent to the sugar mill.

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Instead, it is being planned that the sugarcane for the processing facility will be brought from Nkhotakota.

In an interview last week, Minister of Agriculture Allan Chiyembekeza, said government is doing all it can to have the facility operational despite the problems the project is facing.

“The information I have is that we had some financial mismanagement problems because the money was available but I think it wasn’t used for the purposes intended. That’s why we have not been able to have any plantations now. However, government is looking into that issue and definitely, sometimes very soon, planting will start,” Chiyembekeza said.

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When officials from the Greenbelt Secretariat visited the site in June this year, it was revealed that installation of the irrigation system was suspended following the government’s failure to pay contractors K800 million.

Three companies, Plem Contractors, Agricane and HE Jackson were working on the site.

The amount kept rising as updated information from the Greenbelt Initiative (GBI) secretariat at the time revealed that the contractor had charged an interest of K300 million.

Ironically, the GBI vote is one of the votes that have been used in recent years to solve some problems in the civil service. Some sources told our sister paper, Malawi News, in June that in 2012/13 financial year, GBI was allocated K1 billion but K200 million was taken out to assist in salary increments civil servants were demanding in January 2013.

In 2013/14 the initiative was allocated K1 billion but the amount was revised down to K500 million.

With just days before the end of 2014/15 Financial year, out of K2 billion that was allocated, GBI was only funded K400 million.

Currently 250 smallholder farmers have been allocated plots on a 530-hectare-stretch at this place called Chikwawa.

In an interview on Thursday Acting Greenbelt Coordinator, Henrie Njoloma said government paid the contractor through a zero coupon bond.

“What has happened is that government has paid the contractor with a zero coupon bond. That was done two weeks ago. The question is: How do we proceed? The contract has a validity period. During validity period it has got rates. The rates, in terms of economy, they must have changed. So, do we go back and advertise for him to continue or how do we do it? That’s the debate we have,” Njoloma said.

According to Njoloma, government has taken full responsibility to develop irrigation facilities for the smallholder farmers.

“We were envisaging to complete installation of the irrigation facilities and grown the sugarcane by 2015. By this time, when we are finishing the mill, the sugarcane should have been ready so that we can crush, for at least for three months. That was the initial plan,” he said.

Njoloma said that this week government will meet to discuss the future of the project.

“We have a meeting next week [this week], because the contractor has assessed what is remaining. We are going to sit down with our authorities to make a decision on whether to change the rates or which law should we use for him to continue using the same contract or we award him a new contract,” he said.

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