State issues final default notice to MeTL Group

GOVERNMENT has issued a final default notice to Mohammed Enterprises Tanzania Limited (MeTL) Group over the investor’s alleged failure to commence production at the former Zambia-China Mulungushi Textiles Joint Venture (ZCMT-JV) complex in Kabwe.
On July 30, 2014, ZCMT-JV board vice-chairperson Rosemary Salukatula and MeTL Group chairman Gulam Dewji signed a 12- year lease agreement.
ZCMT-JV, on December 11, 2014, officially handed over its assets in Kabwe to MeTL Group after the two parties exchanged certificates of handover and receiving of the assets.
Speaking on Friday night at a public discussion organised by the Kabwe Press Club, Central Province Minister Davies Chisopa said many people are disappointed that MeTL Group has not commenced operations.
“It is in this vein that the government of the republic of Zambia under the leadership of his Excellency Edgar Chagwa Lungu has issued a final default notice to the investor,” Mr Chisopa said.
“What this means is that once a final default is issued, they are only given 60 days in which they are supposed to start operations of Mulugushi textiles. If they don’t start operations within this specified period, then we are sorry we may think otherwise and look for another investor.”
The minister said Government was optimistic that MeTL Group would revive the textile complex, create jobs and a market for cotton farmers.
“But suffice to say this, what has come from our investor is different from what us as government expected,” he said.
He, however, said Government cannot abruptly terminate the contract with MeTL Group because of legal implications.
“As Government, we are following the legal procedures. It is in this vein that a default letter has been given to the investor. If he doesn’t meet the deadline, we will not have any choice but to terminate the contract.
At the same public discussion, Bwacha Member of Parliament Sydney Mushanga said Government has engaged MeTL Group over concerns on the revival of the textile company.
MeTL Group promised to inject an initial US$10 million in the textile company and create about 2,000 jobs. ZCMT-JV ceased operations in 2007 due to operational challenges.

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