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Malawi Housing Corporation severs ties with Chinese firm

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By Wezzie Gausi

The Malawi Housing Corporation (MHC) has terminated a contract it had with a Chinese company called Henan Guoji Development Co Limited to construct houses and other facilities in the country.

In 2012, MHC and Guoji formed a joint venture for construction of houses and other facilities with a shareholding structure of 80 percent for the Chinese company and 20 percent for MHC.

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The venture was under the name MHC Henan Guoji Development Company Limited.

In an interview with The Daily Times, MHC Chief Executive Officer Jordan Chipatala said they have terminated the joint venture having noticed that “some issues were not complied with by Henan”.

He said the two entities agreed on certain deliverables which Henan allegedly did not meet along the way.

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“We are at the stage where we want to get back the remaining land that is in possession of Henan. There are 30.9 hectares that have not been developed yet.

“MHC is requesting the land back and, failure to do so, Henan should pay back the money equivalent to the current price,” Chipatala said.

He could not be drawn to disclose that “current price”.

Chipatala added that MHC felt that the contract was not properly negotiated and that the parastatal referred the matter to the Attorney General who gave an opinion to terminate it.

“Of course Henan managed to construct 104 houses out of which only six were given to MHC, which made us feel that sharing of houses was also not properly negotiated,” he the MHC boss said.

Public Accounts Committee of Parliament (Pac) Chairperson Mark Botomani said in a separate interview that government institutions have always left a lot to be desired when it comes to contract negotiations.

Botomani called for proper consultations when it comes to negotiation of contracts, “especially when it is to do with foreign companies”.

“We will be engaging the Comptroller of Statutory Corporations to see how best government organisations can be helped for them to perform their mandates,” Botomani said.

Henan Guoji officials were not available for comment on Thursday.

The two parties agreed that MHC should contribute office space and transportation during the preliminary stages of the project and find accommodation for Chinese personnel with expenses for the accommodation to be met by Henan Guoji.

They also agreed that MHC should approach the government and lobby for construction of no fewer than 1,000 units for the first year and land reserve accommodating no fewer than 200 hectares anywhere in Malawi.

Duties of the joint venture included planning and surveying or demarcating into plots the land earmarked for the project and ensuring that the plans included creation of complete communities with facilities such as hospitals, schools and shopping malls.

The others were designing houses and other buildings constructed by the joint venture; marketing and selling the houses and other products of the joint venture; constructing demonstration houses and establishing factories to manufacture building materials such as tiles and others.

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