Shipping Concessions on Lake Malawi hang in the balance
Doubts surround the future of two concessions signed between the Malawi Government and Mota-Engilregarding Shipping and Ports. The two concessions were signed in 2010 and 2012 respectively.
Shipping was previously operated by Malawi Lake Services while the ports along Lake Malawi were operated by the Marine Department in the Ministry of Transport and Public Works, The two entities are currently being operated by Malawi Shipping Company and Malawi Ports Company respectively, both being Mota-Engil subsidiaries.
The two concessions have not been a success compared to what was anticipated at the inception, says Madalo Nyambose, Principal Secretary responsible for Administration in the Ministry of Transport and Public Works.
The Public Private Partnership Commission (PPPC) recently engaged a South African Consultant to assessthe performance of the concessions and recommend to Government areas that require a review.
“We are waiting for the results of the report from the Consultant engaged by Private Public PrivatizationCommission (PPPC) through a World Bank Project,” she says.
The report, according to some sources, is believed to have been concluded and submitted to the relevant authorities.
As required by the concession agreement movable assets, especially passenger and cargo ships, were purchased by Mota-Engil, However, payment towards the purchase is yet to be completed about 12 year down the line.
Sadly, some of the most important lake vessels have for many years remained idle without operating at Monkey Bay Shipyard… They include the oil tanker M.V. Ufuluand the relatively new passenger vessel, M.V. Mtendere.
“The day-to-day operations and repairs of vessels arein the hands of the Concessionaire (Mota-Engil). The Concession only demands the provision of a weekly passenger service to cover Passenger Service Obligation. It depends on their business plan. Mota-Engil is in a better place to provide details as a concessionaire,” says Nyambose.
Shipping on Lake Malawi has lately been meeting some challenges including climate change which led to dwindling of water levels making it impossible for some vessels to dock at Chipoka port in Salima District.
“Issues of climate change led to the closure of Chipoka Port. Now the lake water levels have risen to accommodate ships of any size. The other challenge is the issue regarding the boundary between Malawi and Tanzania on Lake Malawi which is negatively affecting shipping.
On a better note all ships have to go under annual maintenance at different levels. Malawi’s most reliable passenger vessel, the 72 year old M.V. Ilala continues to undergo frequent safety spot checks by surveyors to be kept in service.
Meanwhile, Nyambose says, maintenance works on the floating dock that sank last year have been completedand, already available for M.V. Ilala annual refit.
The Public Private Privatization Commission (PPPC) concurs with Nyambose that the shipping concessionhas registered little success, according the Chief Executive Officer, Patrick Kabambe.
“For the shipping concession, there have been minimal successes. One of the biggest challenges which hasfaced the concession has been the lack of compliance to some contract provisions and lack of a clear marketing strategy by the concessionaire have been seen as challenges affecting their performance. There has also been lack of supportive policy and strategy to make the concession commercially profitable” says Kabambe.
The PPPC, he says, is working with Government to ensure that the Concessionaire is compliant with contractual provisions.
He, among others, confirmed that the acquisition of assets is yet to be completed.
It was clear from the initial feasibility study that the shipping concession would only be commercially viable if cargo is a strong base for the business as passenger services on its own is a loss making venture. So there should have been a deliberate policy and strategy to support the concession by directing fuel and dry cargo (break bulk and containerised) from Chilumba to Chipoka, he adds.
Continued operation of the passenger service obligation route ensures that underserved areas are continually accessible at least on a weekly basis hence ensuring that supplies like food and fertiliser are available to these communities. One of the major highlights was the procurement a new vessel, the M.V. Chilembwe in 2014…
Kabambe could not be drawn to comment on the ports concession saying the Ministry of Transport and Public Works is better placed to comment on the Ports Concession as the transaction was handled by the Ministry without the involvement of the PPPC.
Currently, Malawi’s Marine College which trains most marine operators has been operating without a board for over 14 years.
“The powers to re-institute the Board is in the President. Maybe OPC can be in a better place to give a clear position. But the absence of the Board is not in any way affecting the operations of the College. The College is under the Department of Marine Services which is headed by a Director,” she says.
This despite the act vesting the authority to institute a board to the minister responsible.
It is contended that some marine officers have been operating without renewing their marine certificate, a requirement after every five years.
Nyambose said: “This is to do with the STCW Certification on the Manila Amendments. The problem is that in January, 2013 the Marine Department started implementing the Manila Amendments without domesticating the Amendments in our Law. In this case we cannot enforce what is not in the Law of the Land. However, all the crew members do apply for revalidation of their certificates after every 5 year regardless that the enforcement power is not in the Inland Waters Shipping Act of 1995”.
However, further investigations reveal that in 1994 following a diplomatic conference, Standards, Training of Certification and Watch-keeping when revalidation of certificates of competency became a mandate globally. The Ministry of Transport raised the issue with the Minister being signatory for subsidiary legislation, sought the commencement of revalidation of certificates of competency under the Malawi law prior to formal domestication of the requirement. Ministerial approval was granted and the Ministry commenced the revalidation of certificates of competency.
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