Govt moves to terminate Mota Engil shipping concession
Minister of Transport and Public Works Jacob Hara has said the ministry is considering terminating the 35-year marine services concession agreement with private investor Mota Engil.
Mota-Engil was awarded a shipping concession in 2010 by Malawi Government and formed Malawi Shipping Company (MSC), a vehicle to manage and operate Malawi Lake Services.
The firm has also been managing the Lake Malawi ports of Chipoka, Chilumba, Nkhata Bay and Monkey Bay.
However, Hara, who inspected the Nkhata Bay port on Monday, said he was not satisfied with the management of the jetty.
He said: “Literally they have done very little since the takeover. As I speak, Chipoka Port has closed for the public.
“It seems, they want government to renovate the facility on their behalf, so that they only come in to collect money. This is not on. It is better that government should take back the management of the facilities.”
The minister said Mota Engil was breaching the concession agreement by failing to fulfil what was agreed upon, which is to make water transport a thriving sector, among others, by rehabilitating the dilapidated port infrastructure.
Hara said if well managed, water transport in the country has great potential to spur development.
According to a Public Private Partnership Commission (PPPC) presentation which the commission’s chief executive officer Patrick Kabambe made to Transport and Public Infrastructure Committee of Parliament in May 2022, Mota Engil undertook to procure existing Malawi Lake Service moveable assets including vessels at $3.5 million.
However, the report showed the investor only paid $2.7 million and owes government the $800 000.
The company is also obligated to pay one percent share of revenue to Marine College Training, but has failed to comply due to perpetual losses it is making.
The company is also obligated to pay a fixed rental fee of $5 000 per month for use of fixed assets that still belong to government, such as shipyard and houses, but has outstanding rental arrears.
Mota Engil was also supposed to construct a four star hotel in Monkey Bay, Mangochi and land was identified at Masasa but it failed due to land ownership and compensation challenges.
In an interview on Tuesday, Mota-Engil public relations manager Thomas Chafunya said the company is glad that there is renewed commitment on the part of government to develop the water transport sector.
He said they are looking forward as a holding company of Malawi Shipping and Malawi Ports to discuss with Hara and map the way forward.
“It is good that the minister has made effort to appreciate how things are at the ports. We are looking forward to the review meeting that will surely accord both parties an opportunity to evaluate bottlenecks and find the way forward.
“In concession agreements like these, both parties make commitments which, indeed, need to be reviewed as time goes by,” said Chafunya.
