MP Chihana query on SA’s Peermont deal at Malawi presidential hotel

Member of Parliament for Rumphi Central Constituency, Enoch Chihana has asked government to explain to the House the details of the contract details that Malawi government signed with Peermont Holdings from South Africa to manage Umodzi Park which include the Bingu International Conference Centre, the five star hotel and presidential chalets.

The multi-billion kwacha Presidential Hotel in Lilongwe

The multi-billion kwacha Presidential Hotel in Lilongwe

However, things seemed to be getting out of hand when some parliamentarians said the government is paying K150m to Peermont Holdings.

Speaking during the committee supply stage on vote 330 of Ministry of Information, Tourism and Civic Education which the Minister of Finance Goodall Gondwe asked the House to approve the revised budget of K4,788,423,936 from the approved provision of K5,453,106,579, Chihana asked government to explain  details of the contract  to manage the multi-million complex comprising the Bingu International Conference Centre, The President Hotel and the Presidential Villas in Lilongwe.

According to Chihana, he has information that the Malawi government is paying the operator of the hotel (Peermont) close to K150 million per month regardless whether the hotel has made profits or loss.
Chihana also asked the minister to tell the house how much so far they have managed to pay the Republic of China for the loan used to build the hotel .  Malawi government had borrowed $95 million from the People’s Republic of China to build the complex under a loan agreement payable in 30 years.

He also claimed he also has reliable information that the Malawi government has started repaying the loan.

Reacting to the questions, Minister of Finance Gondwe, said those are hearsay however said he did not have information.

Chihana challenged Gondwe that he must not forget that he at some post was in government and know some of the deals including the Peermont Holdings issue and it was important that government tell the house the truth of the matter.

Speaking to Nyasa Times in an interview, Chihana said  he indeed has information that government is paying Peermont holdings K150 million per month to operate the hotel, saying  it’s not wise for the government to be spending such an amount  a month paying foreign company for operating a local hotel which he says can be best done by local investors.

Peermont was given the deal in February 2012 but pre-contract negotiations lasted for over a year and so when president Bingu wa Mutharika died in April 2012, his successor Joyce Banda ordered the Ministry of Tourism and Umodzi Holdings to renegotiate the deal with Peermont, a development which Peermont accepted.

Subsequently, Banda decided to cancel the deal and offered a lease to  the Legacy Group Holdings to manage the complex.  Both firms are based in South Africa.

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7 thoughts on “MP Chihana query on SA’s Peermont deal at Malawi presidential hotel”

  1. Manueli says:

    Stupid Malawian government!
    Build factories and start extensive farming.
    5 star hotel for WHAT?

  2. mjiba says:

    Chihana shut up, You were there as Minister when this deal was being signed. Why didnt you question then?

  3. Truth says:

    Awa ndi mabodza. what has Peermont done wrong. in my assessment, they are doing a good job and their marketing is superb. MPs, please refrain from bringing up issues that you have little knowledge of. Which locals can manage better than Peermont, advertise the facility as per dreams of late BWM. Management contracts of hotels are pretty standard but you have to be in the industry to appreciate. You, Mr Chihana, do you know anything about hospitality management?

  4. PURE ECONOMIST says:

    WE ARE TIRED OF LOSING MONEY TO OTHER ALREADY DEVELOPED COUNTRY LIKE SOUTH AFRICA, THEY ARE THE SAME SOUTH AFRICANS WHO BENEFITED FROM OUR OWN MINE KAYEREKERA, NOW UMODZI PARK HOW DO YOU THINK WE CAN STIMULATE DEMAND IN OUR ECONOMY AND THE GROWTH OF OUR ECONOMY IF WE KEEP ON LOSING MONEY TO SOUTH AFRICA BY GIVING THEM SUCH DEALS. ANTHU AWA AMADYERA MOMWEMO POPEREKA DEAL NGATI IMENEYO KWA ANTHU OBWERE KOMA CHOTI MUZIWE NDI CHOTI MUKUPHA ECONOMY YATHU.

  5. Disapointed Customer says:

    Peermont Hotel Needs to improve its food. Especially their dinner – it looks like left overs. It’s surprising that government is paying Peermont Mk150m for that lousy service. Peermont Hotel please pull up your socks.

  6. Walyawalya says:

    Enoki Chihana ndi bakha! What he is talking about is the corrupt deal which his mother Joyce agreed with Legacy after cancelling the original Peermont agreement.

  7. MERCEDES says:

    WISE QUESTION EH!

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