Two fuel reserves still dormant

The National Oil Company of Malawi (Nocma) says it is still exploring operational options for fuel reserves at Chipoka in Salima and in Mchinji following unsuccessful tender for concessioning the fuel storage facilities.

In an interview on Wednesday, Nocma spokesperson Telephorus Chigwenembe confirmed that although there is still some fuel in the reserves, there are no activities at the two facilities.

“Nocma would still want to have a concession with interested players because in Mchinji and Salima, there are currently no activities,” he said.

In 2014, government rehabilitated and opened Chipoka in Salima and Mchinji fuel reserves which have fuel holding capacities of 792 000 litres and 390 000 litres, respectively, at an estimated cost of K500 million with an aim of preventing fuel shortage.

Between 2010 and 2012, Malawi experienced serious fuel shortages which necessitated the formation of Nocma, a State-owned company.

“Government also embarked on construction of three new strategic fuel reserves with a loan from the Indian Government worth $26 million (about K19 billion), in a move to ensure that the country can keep fuel to last for over three months.

Chigwenembe said Nocma is exploring options on how the two idle facilities should be operated following the unsuccessful tender for concessioning.

“Of course, there are options, including running the facilities through a throughput contract as is the case with Chilumba in Karonga,” he said.

A throughput contract is an agreement between two parties wherein a service or commodity is secured by one of the parties for a specified period of time.

The Nocma spokesperson, however, could not disclose how much the country could be losing as a result of underutilising the two fuel storage facilities.

“There are regulations that are being worked out to guide how we do our business at the reserves. So in the absence of that we can’t tell much about sales,” he said.

But Parliamentary Committee on Natural Resources and Climate Change chairperson Welani Chilenga said while it is the mandate of Nocma to manage the fuel reserves, the state in which the facilities have been in makes it hard for business entities to express interest.

“They  need to further renovate the facilities. No one would want to get that business and start maintaining and renovating the reserves because it is costly,” he said.