Malawi government has not cancelled a $145 million (about K58 billion) arms deal with South Africa’s Paramount Group but is renegotiating a new contract based no new terms, Finance Minister Goodall Gondwe and Paramount have confirmed.
Gondwe was quoted in newspaper report on Saturday for saying that agreement between the Malawi Government and Paramount Group “has been abrogated.”
The Finance Minister has clarified that they are “renegotiating the terms” and that with the South African firm are in progress.
Paramount have also confirmed that the government of President Peter Mutharika has not terminated the contract as was reported that the deal – which Malawi was expected to make quarterly payments of $5 million over several years for patrol boats and other military equipment – was “illegal and expensive”.
In a statement, Paramount Group said the report of terminating the contract “are not a true reflection of the situation.”
The company said: “At the request of the Malawian Government, Paramount is engaged in ongoing constructive dialogue to revise the contract in order to meet their changed requirements.
“There also appears to be an insinuation by the report that the agreements entered into were not legal. This too is not correct.
“The Paramount Group contract with the Government of Malawi was concluded according to Malawian governmental processes and was signed by both the Ministry of Finance and the Ministry of Defence.”
Malawi government is reported to have convened a meeting involving officials from Paramount Group and Gondwe, Governor of the Reserve Bank Charles Chuka and Attorney General Kalekeni Kaphale after noting legal pitfalls in the deal.
Paramount Group, Africa’s largest private defence and aerospace firm, signed deals with the Malawian government for agriculture, fuel and military contracts through a network of investment firms.
The compnay is run by the South African brothers Ivor and Eric Ichikowitz and specialises in manufacturing armoured vehicles and unmanned aerial vehicles. It previously brokered a deal for the Malawian government to equip its peacekeeping troops in the Democratic Republic of Congo.
It is also linked to the sale of Malawi presidential jet, the Dassault Falcon 900EX which was bought by Bohnox Enterprises, a firm registered in the British Virgin Islands, and sent to South Africa, where it is loaned to VIPs by the jet company Fortune Air.Follow and Subscribe Nyasa TV :