K1.5BN hunt In forest

Some companies and parastatals owe the Department of Forestry K1.5 billion in annual fees, royalties and concessions for Viphya Plantations, an amount they have not honoured with some dating as far back as 11 years, The Nation can reveal.

The department has since submitted a list of all Viphya Plantation debtors to the Attorney General to help it recover the money from those who bought  concessions. 

The development comes at a time when the department is struggling to fund its operations.

According to the department’s director Stella Gama, her office has been reminding the companies to settle the bills, but to no avail.

Attorney General Thabo Chakaka Nyirenda asked for some time to follow up on the issue and provide us with an update, but some of the companies mentioned claim they do not owe the department any money.

Documents we have sourced show that those owing the department money in annual fees and royalties include Southern Region Water Board (SRWB) K582 million, Malawi Telecommunication Limited (MTL) K45 million, Malawi Broadcasting Corporation (MBC) K43 million, Blantyre Water Board K11 million and 30 others.

And 54 companies and individuals owe the department K591 811 104. 50 after they bought concession at Viphya Plantation for a total of K715 734 995.99 but only paid back K74 332 577.93.

According to the document in our possession, those owing the department huge sums include two private entities in the timber and plantation field whose combined total owed to the department in the list updated as at March 31 2023 is K238 355 574.

Documents we have sourced show that the department last year met companies and individuals who have not settled their bills where they agreed that the department should issue invoices to them for payment.

Invoices were issued to each company to settle their bills and they were all given a one-month period to pay the debts.

One year down the line, no company has settled its bills despite receiving invoices, some of which were issued in March 2022.

On March 8 2022, the department issued a letter and invoice to SRWB for them to settle their fees and royalties amounting to K581 866 000.

Reads the letter signed by F. Chilimampunga: “Following the meeting we had in Zomba about payment of annual fees and royalties according to the Forest Act [Cap 63:01] reflected in Forest Rules, Malawi Gazette of 3rd December 2010  kindly find below the total fees and royalties you are to pay to the government and attached are the fees calculations and the invoice for 2020/21 fiscal year. The invoices for other years will follow suit.”

Despite this reminder and invoice SRWB has not settled its bill.

SRWB spokesperson Rita Makwangwala confirmed that they received an invoice for that amount.

“We had a discussion on the same. The royalties are mainly to do with Mulunguzi Dam which the Southern Region Water Board uses for provision of water as a social obligation. The board is still engaging the department on the way forward,” she said in an email response.

MBC public relations and customer affairs manager Chisomo Mwamadi said they do not have such invoices in their records and that it will be difficult without documentation to trace back a debt dating back to 11 years.

“The question you should ask Forestry is: Where were they all these years to wait until 2023 to ask for their dues?” he said.

Malawi Telecommunications Limited (MTL) marketing and corporate affairs manager Gladson Kuyeri said he was not aware that his company owes the department of forestry money amounting to K46 million.

“We have not received the bills at MTL,” he said.

BWB director of finance Paul Chiumia said they do not have any documentation from the department.

“I was checking, we do not even have an invoice,” he said.

Reformed Timber Millers Union was also mentioned as owing the department, but its president Alfred John Adam said he was aware that Timber Millers owes the department K109 million, saying their case is different.

“Our issue is different from other debtors because our issue was presented to the Vice-President [Saulos Chilima]. He said they will look into it and advise us what to do. We are still waiting,” he said in a WhatsApp message.

One of the companies that got a concession in January 2022 said it agreed with the Forestry Department to pay over three years.

“We have two more years to settle the said debt. Therefore, it is not correct that we have failed to pay,” said the company’s managing director.

Another company cited on the list disputed the department’s claims that it owed the department money, arguing it did not buy a concession at Viphya.

“What happened was that we had a deal with the government to supply timber, but we did not. So, the information is wrong. In fact, Forestry has to pay us K100 million for the re-afforestation we carried out. I will call you next week for more details,” said the company’s owner.

Gama says her office will try everything to recover its money.