Publicly listed Malawi Property Investment Company (Mpico) on Tuesday locked out government ministries and departments from Gemini and Tikwere houses in Lilongwe over outstanding rental arrears estimated at K2.9 billion ($5.8 million).
Gemini House was, however, later in the day reopened to civil servants after negotiations between the landlord and tenant.
Mpico Limited managing director Peter du Plessis, whose firm owns the buildings providing office accommodation to government at City Centre in Lilongwe, had earlier given government until May 1 to pay up or risk eviction.
But Ministry of Finance spokesperson Nations Msowoya said it was unfortunate that Mpico resorted to locking out the ministries and departments.
He said: “As government, we have been trusted tenants for many years. This long-term relationship has been founded on trust and understanding that we both need each other. Currently, we are discussing with Mpico so that we can resolve the stalemate.”
In a letter dated February 2015 addressed to Principal Secretary for Housing and Urban Development Ivy Luhanga and Minister of Finance, Economic Planning and Development Goodall Gondwe, Du Plessis said: “With the conclusion of our annual audit by KPMG, we have been advised that Mpico cannot continue operating as a business if government fails to settle the enormous outstanding bill.”
Du Plessis alluded to various meetings held on the issue which, he observed, produced no tangible result.
He said the situation had become so precarious that Mpico risked becoming insolvent, meaning that it would be unable to pay its own creditors.
Documents The Nation has seen show that government has accumulated rentals of up to K2.9 billion; hence, Mpico’s issuance of eviction notices.
During a visit to the two office complexes yesterday, civil servants were seen standing outside the office buildings, warming themselves in the sun while awaiting direction from their superiors.
Government agencies affected by the lock out included Ministry of Gender, Disability, Children and Social Welfare; Ministry of Industry and Trade, Department of Statutory Corporations, Central Internal Audit, Ministry of Labour and Manpower Development, Ministry of Information, Tourism and Culture and the Department of Civic Education that have been housed in Gemini house for years.
In Tikwere House, the agency affected is the Department of Irrigation and Water Development.
During his presentation of the 2014/2015 budget, Gondwe said government owes the private sector about K175 billion ($350 million) as a result of economic downturn the country has been facing for the past years.
Mpico Limited, a subsidiary of Old Mutual (Malawi) Group, is listed on the Malawi Stock Exchange (MSE) and is engaged in the development, rental and management of properties.
It focuses on the ownership, leasing, management and development of commercial residential and industrial properties.