The prevailing shortage of fuel mainly petrol and diesel is having its toll on the minerals sector resulting in suspension of projects with local cement producers among those surviving on a thread owing to the energy crisis.
A snap survey conducted by Mining & Trade Review has revealed that some contractors are failing to fulfill their assignments due to the fuel shortages resulting in failure to meet the deadlines for the assignments.
MD for Lilongwe based provider of geotechnical services Geoconsult Michael Sabelli told Mining & Trade Review that the shortage of fuel has heavily impacted on the company’s operations.
Sabealli said: “At Geoconsult we have got Dyke investigations in Chikwawa as part of the flood prevention programs that are being held up. We struggle to find diesel, delaying our report submissions for the works. To make the matters worse we have applied for MERA (Malawi Energy Regulatory Authority) authorization twice in the last 12 months to fill our drill rig on site, both times they have not provided the letter, implying we have to demobilize and bring the rig to the station.
“The current project will likely be delayed by a month as a result, which means the chances of getting the dykes to working conditions before the next rains will be slim.”
Chairman of Cement Products Limited (CPL) Aslam Gaffar said his Company has been forced to stop cement production at its factory in Njeleza, Mangochi due to shortage of diesel since the Company uses back up diesel generators to run its plant.
“We have stopped our Kiln due to lack of fuel resulting in no limestone mining. As we speak the Clinker plant is not operational,” he said.
MD for another cement producing firm Jitendra Patel said the energy crisis has not only impacted on day to day production but also the company’s ongoing factory expansion works.
“We are totally down. We do not know how to plan a mega industry in such a situation. Each day, we feel we would rather shut down temporarily as nothing planned is working,” said Patel.
Minister of Energy and Mining Dr. Jean Mathanga acknowledged the frustration and inconvenience being experienced by Malawians due to the fuel shortages and recurring power outages at a Press Conference in Blantyre.
She, however, assured the public that the situation is expected to normalize as fuel imports are underway to restore steady supply across the country.
Responding to concerns regarding the Government’s shift from the Government-to-Government (G-to-G) fuel procurement arrangement to the Open Tender System, the Minister explained that the previous system depended heavily on economies of scale, where large volumes of fuel were sourced from a single supplier, which created vulnerabilities whenever the supplier failed to deliver.
“In contrast, the Open Tender System offers diversification of supply sources. This means that even when some suppliers are unable to deliver for various reasons, the country can still access fuel from other available suppliers,” she said.