Malawi is losing millions of forex paying road fuel haulage firms by not using its 22 rail fuel wagons which have remained idle at the Malawi Cargo Centre Limited (MCCL) in Tanzania for over seven years.
The wagons, each with a capacity of 60 000 litres, were designed to move fuel by rail to Mbeya Port—100 kilometres from Songwe border in Karonga, from where road fuel haulage firms from Malawi would collect it.
Currently, fuel is hauled all the way from Dar es Salaam by road, which is 1 500 kilometres away.
According to Malawi Energy Regulatory Authority (Mera), the landed cost for petrol and diesel presently by using the Dar Es Salam—Lilongwe direct by road, are K546.45 and K542.60 per litre, respectively.
Using rail to deliver fuel to Mbeya and then by road to Malawi the landed cost would be K545.87 and K540.24 per litre for petrol and diesel, respectively.
Mera public relations manager Fitina Khonje added that the rail cost between Dar es Salaam and Mbeya is being negotiated.
She said: “We have used a rate of $68.50 per metric tonne that was applicable when the Mbeya facilities were in use. The outcome of the rail rate negotiations will determine the final-landed cost.”
But in an e-mailed response last week, managing director of MCCL Pascal Chikaonda said it could have been cheaper to move fuel by rail to Mbeya port than hauling by road all the way from Dar es Salaam.
Meanwhile, Minister of Transport and Public works Jappie Mhango disclosed, in an interview last week, that government now wants to operate the fuel tankers through National Oil Company of Malawi (Nocma).
Responding on the continued delays to have the wagons up and running in the face of challenges faced by fuel transporters in the country, Mhango said: “Nocma will now take over operations of the tankers. What is remaining is to finalise one or two things.”
Malawi owns 18 percent shares in MCCL. The rest are owned by private firms.
But the decision to switch management of the facilities from MCCL to Nocma comes as a surprise to MCCL officials who insist that they remain the operators of the wagons.
Chikaonda said he is not aware of the new arrangement.
“It is not true; the facilities will be run by Malawi Cargo Centre Limited. We expect Nocma and Petroleum Importers Limited (PIL) to route Malawi fuel through this Malawi facility now that it is ready,” he said.
MCCL also has petrol storage tanks that hold 8.5 million litres and diesel tanks with 12.5 million litres capacity.
The fuel wagons were rehabilitated three years ago at a cost of $1.3 million by a Kenyan firm, Dabit. Our findings indicate that government went into a concession agreement with the Kenyan company and the money is yet to be paid.
But the minister of Transport said discussions were underway to resolve the issues.
In an interview this week, Treasury spokesperson Davis Sado said: “Government is engaging Malawi Cargo Centre Limited on how the facility can be used to the optimum productivity to recoup resources which were pumped in with government as a stakeholder.”
Commenting on the impending resumption of the fuel wagons PIL executive director Enwell Kadango welcomed the development, saying it will mean less time to bring fuel into the country.
“As a fuel importer our interest is to know if the facilities are available so that our suppliers have a place ready for storing the fuel; secondly, we normally take our transporters to Dar es Salaam to bring fuel, but if a supplier can carry the fuel to Mbeya, we don’t want to look at the losses, all that we want is that our fuel gets to Mbeya.”