Government firm seeks capital injection

Government firm seeks capital injection

Post was last updated: November 23, 2022

Public Private Partnership Commission (PPPC) says a strategic partner can help Plant and Vehicle

Hire and Engineering Services (PVHES) to boost its capital and help it upgrade its mandate and machinery.

In a published notice on Monday, PPPC, acting on behalf of the Malawi Government, says the State firm, formerly Plant and Vehicle Hire Organisation (PVHO), is also looking for additional expertise to improve its efficiency and put its operations on a sound commercial basis.

PVHES machinery and offices are said to be in a dilapidated state

Speaking in an interview on Monday, PPPC chief executive officer Patrick Kabambe said they are currently looking for a transaction adviser to undertake a detailed feasibility study, which will determine the firm’s operational autonomy and how much capital will be required.

He could not indicate how much capital injection is required, saying this will be quantified after the study.

Said Kabambe: “For now, we cannot say how much capital will be required. That will be determined from the feasibility study.

“The study will also determine how much stake the private partner will be required to put in after assessing the total requirement.”

He said they do not have any preference over local or international investor, adding that they are looking for best partnerships for the company to resuscitate its operations.

“While it would be ideal to get local investors, we are open to get proposals from any credible investors,” he said.

Over the years, PVHES has reportedly been abused by government ministries, departments and agencies (MDAs) which have contributed to the firm’s financial woes.

MDAs have accumulated debts amounting to K400 million as of the year 2020 and failed to honour the same, according to the Malawi Government Annual Economic Report.

The Department of Statutory Corporations recently admitted that there is increased abuse of the motor vehicles by parastatals officials for personal use at the expense of government duty.

As a result, most of the organisation’s machines and plants are grounded and PVHES operations across the country are paralysed.

But in an interview, Comptroller of Statutory Corporations Peter Simbani said government is now keen to manage government assets in the form of vehicles that are in parastatals.

He said that some of the parastatal vehicles have been missing, but could not give the exact figure and value of the suspected missing vehicles.

PVHES was established under the Public Finance Management Act as a Treasury Fund to manage government’s fleet of plant and vehicles and also provide technical services on commercial basis to both government and private sector.

As part of government reforms, the organisation was in 2013 rebranded to PVHES to incorporate its expanded business opportunities to make it more commercially viable.

In the 2018 Malawi Investment Compendium, government estimated that recapitalisation of PVHES would cost about K2.5 billion.

Source Link

Let us know what you think of this article and remember to add us on our facebook and follow us on our twitter. Come back daily for more Malawi business news.

Quick Links: Download Business eBooks | Ten Signs You Are An Entrepreneur | What is a Managing Director?