Ministry of Lands Principal Secretary Reyneck Matemba has said government is committed to paying Malawi Property Investment Limited Company (Mpico) plc about K5.8 billion in rental arrears.
He said this on Wednesday in Lilongwe when he appeared before the Parliamentary Committee on Transport and Public Infrastructure after Mpico sealed the ministry’s offices on 25 April for nonpayment of rentals.
The offices were later opened on 3 May 2022 after government entered into negotiations with Mpico.
Matemba said they have paid Mpico part of the arrears with a commitment to settle the remainder in due course.
He said: “We owe Mpico rental arrears due to challenges in the government paying system, which has hitches. Even though we budget for rentals, we do not get all the resources.
“For instance, in the current financial year, we budgeted for K15 billion, but we have been given K11 billion, meaning that we will still face challenges ahead.”
Moving forward, Matemba said the ministry is constructing offices at Capital Hill “to avert embarrassment” when landlords close government offices.
He assured the committee that in the next five years, the ministry will have own offices.
Mpico sealed Tikwere and Zowe office buildings, housing the ministry’s various offices, due to rental arrears that accumulated for over 20 months.
In a statement, the ministry’s spokesperson Enoch Chingoni said the ministry last week processed a rental payment of K650 million which was credited into Mpico’s account.
He said the ministry has further processed additional rental payment of K1.6 billion which will be credited into Mpico’s account this week.
Chingoni said: “The K1.6 billion could have been credited into their account last week, but their account had some issues which we are told have been rectified.
“The matter has been resolved amicably and we will continue with our normal operations. We would also want to thank our minister [Sam Kawale] for his intervention on the matter. His timely intervention helped us to have the offices re-opened”.
Mpico managing director Damien Kafoteka on Wednesday said government has promised to settle the arreas within six months.
“As a company, we are greatly affected by the arrears government owes us. We are failing to pay some service providers, for instance, those who maintain our property,” he said.