Although Bingu National Stadium (BNS) was touted to be self-sustainable and capable of repaying a loan used to build it, audit and performance reports have exposed weaknesses in financial and internal controls in the management of the facility.
The weaknesses pose serious questions on how the K50 billion loan—used to construct the facility— will be repaid.
However, the stadium’s owners—Ministry of Youth and Sports—say they have taken measures, including change of management to ensure efficiency at the facility built between 2015 and 2016 using a Chinese government’s $70 million (about K50 billion) loan, payable in 20 years.
The management has struggled to pay for the stadium’s operations and the facility is suffocating from a K97 million debt which it owes some service providers.
According to a report from stadium management to the sports ministry which Weekend Nation has seen, the stadium owes Omega Security Services K34 361 000 which dates back from the time the security company started to provide services at the stadium.
The stadium also owes Escom K28 029 513.41 in electricity bills accumulated during its three years of operation.
Mchepa Landscapers, who provide services for the stadium’s pitches are owed K16 345 294 while Kaunda Landscapers are owed K13 000 000.
Oasis Furniture, who furnished the stadium’s dressing rooms, are owed K3 600 000 while Commercial World, who produced official opening documentary and videos that shows how to use some of the stadium’s facilities, are owed K2 535 000.
The stadium generates revenue from advertisements, rentals, sporting events, tours, photography, weddings which hits around K5 million per month when fully operational and also gets K4 million monthly funding from the ministry.
However, according to audit reports of 2018/2019, the stadium’s management failed to efficiently manage the revenue.
Part of the report reads: “Treasury Instructions 5.7.1 state that controlling officers of MDAs shall manage revenue efficiently and effectively by implementing appropriate processes that provide for identification, collection, recording, safeguarding and reconciliation of information in respect of revenue.
“An examination of financial records disclosed that BNS collected K12 917 788.07 which was supposed to be banked intact, but actual amount banked was K8 500 000.00, leaving a balance of K4 417 788.07 unaccounted for.”
A 2017/2018 audit report also revealed how the management of the stadium failed to pay for water bills which accumulated to K157 908 081.00, which government eventually settled this year.
The report reads: “Treasury Instructions 2004, Section 188.8.131.52 states that unless otherwise indicated in the notes in the approved estimates, every controlling officer shall ensure that expenditure is in accordance with approved budgetary provisions, and that there is no overexpenditure. An inspection of financial and other related records revealed that water bills amounting to K157 808 081 was outstanding as at the date of audit.”
The stadium has office space for companies to rent at K175 000 per month and a recent management report to the ministry said tenants were defaulting on payment.
The report reads in part: “There are about 15 tenants in corporate boxes. Some tenants defaulted and left their office furniture and efforts to contact them have proved futile.”
Yet speaking during the opening of BNS in 2017, former president Peter Mutharika dismissed critics that the stadium would be a white elephant, arguing it would be capable of generating revenue to pay for its loan.
The mess at the stadium has resulted in stadium owners changing management, but with little results.
Eric Ning’ang’a was the first stadium manager. He was replaced by McMillan Mwale in an acting capacity in 2018. Mwale has now been replaced by Ambilike Mwawungulu who was transferred from Kamuzu Stadium.
Commenting on the mess at the stadium, Mwawungulu promised to improve the situation.
He said: “As a manager, I will try as much as possible to follow government protocols. I know what I am supposed to do. If I collect revenue, I am supposed to bank it in Account Number One. I get funding [from Ministry of Finance after the budget is passed] through Ministry of Sports, then we account for what we have done with the money. It’s just like a circle. I know the terms of reference. I understand what is supposed happen.”
Mwawungulu said the stadium has numerous challenges contributing to the situation.
He said: “The challenges are too numerous. Of course, one the major challenges has been funding and probably most of the challenges follow from that. If the stadium has to run at full capacity, then we need not less than K10 million. I will just give you an example, for electricity alone, we get a bill of not less than K3.5 million every month. That alone almost equals the monthly funding [of K4 million that we get]. So what about water?
“That’s why I am saying the funding that we get is negligible. That’s why you hear of Bingu Stadium going dry; there is no running water, no electricity. So, that is not a conducive environment for business. Clients wouldn’t feel at home to rent a facility that has no water or power perpetually. There are things you must provide as a government institution so that the people that pay for services must have value for their money.”
“So, it all goes back to the central government to provide adequate funding. We expect things to be different from now onwards so that we should be operational and make more money as more people will come and use the stadium.
“Actually there have been advertisers like Airtel, TNM, Itel, and some other agents that have come to advertise. The stadium has really been raising money from such adverts and, of course, for sometime the stadium has not been active and with the Covid-19 it has been worse.
“Most of our clients are still thinking of whether to advertise with us or not because there have been less activities. So, probably the advertisers aren’t getting exposed and are rethinking. If we get the stadium to operate to some capacity let’s say 60 or 70 percent of what it should be, I am sure a lot moré advertisers will come on board.”
Ministry of Youth and Sports spokesperson Simon Mbvundula said the ministry moved in quickly to address the challenges at the stadium.
On the accumulated water bill, he said the stadium was losing the water due to leakage which was later sealed.
Said Mbvundula: “We have installed prepaid metres to control excess usage. Government paid the K157 million bill. We have engaged Fisd [Foundation for Irrigation and Sustainable Development] to sink boreholes with solar pumps to water the turfs and service the toilets.”
BNS has hosted four Flames matches against Morocco, Comoros Island, Madagascar and Lesotho since it was opened four years ago when Kamuzu Stadium was closed for renovations.