The Reformed Timber Millers Union (RTMU) in Viphya Plantation in Mzimba has stopped settling the K196.5 million debt it owes government, citing financial challenges.
The union committed to be settling the debt in monthly installments of K9 million.
However, for the past three months, the union has defaulted on the payment, despite a reminder from government.
Ministry of Natural Resources, Energy and Mining spokesperson Sangwani Phiri and RTMU on Monday confirmed the development.
Phiri said the union had been honouring payments from June to November 2018.
“They are citing financial challenges, but defaulting for three months is a long time,” he said.
RTMU president Paul Nthambazale confirmed the development, saying with the rains falling in most perts of the country, the union is failing to raise enough money through timber sales.
He said the union wrote the ministry even before they started defaulting on payments that they would not be paying because production shrinks during the rainy season.
“We wrote the ministry that we would not be able to pay, but they did not respond, but later we were surprised that we were being reminded to pay,” said Nthambazale.
Asked when the union would start settling the debt, Nthambazale said they proposed that it should be given up to April to resume payments. n