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Government risks eviction from Mpico buildings over K6bn debt

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Government ministries and departments risk eviction from Mpico buildings for failing to settle K6 billion accumulated through rentals.

Some of the affected ministries and departments are the ministries of Gender and Trade in Gemini House; Ministry of Labour, Youth, Sports and Manpower Development; Aviation Department and the Directorate of Road Traffic and Safety Services in Capital House; Ministry of Lands in Zowe House and presidential advisers in Aquarius House in Lilongwe.

Last year, some government departments moved out of Chief Kilupula and Ekistics houses in Lilongwe.

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Mpico Managing Director, Damien Kafoteka, confirmed that government owes his institution K6 billion rental arrears, wondering why the ministries and departments were yet to settle the bills yet Parliament approved allocations for such expenses.

Treasury is also wondering why Mpico is not receiving its rentals because Ministry of Lands, Housing and Urban Development gets a monthly allocation of K500 million while monthly rentals for Mpico amount to K200 million.

Mpico Limited, formerly Malawi Property Investment Company Limited, engages in the development, rental and management of properties primarily in Lilongwe, Blantyre and Mzuzu cities.

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The Company’s tenants include the government, Non- Governmental Organisations (NGOs) and various corporate entities. Its key interests in property development are mainly in shopping malls, office complexes and the hospitality industry.

“From July last year till now [eight months], we have been paid [rentals] just for three months. From July to December last year, we were paid only for one month. Last year, at our annual general meeting, shareholders were very vocal on this,” said Kafoteka, adding that they charge interest on outstanding arrears.

He added: “Parliament approved a budget which included rentals. So, who is being paid since we are the biggest landlord for government? Where is the money going? If we got that money, we would put up more structures, lifts and paint some buildings so that the city looks beautiful. We cannot do that unfortunately.”

He said what is worrying is that, being a listed company on the Malawi Stock Exchange, this means that government is playing with people’s money.

Treasury spokesperson, Alfred Kutengule, said the problem rests with the Ministry of Lands which, he said, gets a monthly allocation covering rentals and other bills.

“They are funded every month for the rental budget line but the responsibility of paying rentals rests with the Ministry of Lands. It is them who decide who to pay. As Treasury, we do not want to accumulate arrears. A decision was made to clear the arrears through promissory notes,” said Kutengule.

Ministry of Lands, Housing and Urban Development spokesperson, Charles Vintula, said the ministry has been paying rentals but the bill is huge.

“The rental bill is huge as it has been accumulating over [the] years. The Ministry has been paying all the bills monthly in accordance with the rentals funding it gets from Treasury, which has not been adequate to fully settle the entire bill at once. We do not only dedicate the rental allocation to Mpico alone, as we also have many other private landlords who rented out their housing units and buildings to government across the country,” said Vintula.

Mpico’s properties include Gateway Shopping Mall, Old Mutual House, Development House, Tikwere House, Mphanga House, MDC House, Kanengo Shops, Mpico KIA, Taurus, Area 12 PTC, Plaza and Guest House.

MPICO was incorporated in Malawi as a private limited company on August 21, 1972, converted to a public limited company on September 27, 2007 and is a property holding company involved in the ownership, leasing, management and development of commercial, residential and industrial property.

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