The new government of Malawi is renegotiating its contract with Paramount Group, and has not cancelled it, according to a joint statement from Paramount and the Malawian government.

Earlier this week Malawian Finance Minister Goodall Gondwe told the Nation newspaper that “the agreement between the Malawi Government and Paramount Group has been abrogated. That is all I can confirm and say.” He subsequently clarified that the terms are being renegotiated.

The paper quoted a source within the finance ministry as saying the government of President Peter Mutharika told the firm the deal was “illegal and expensive” and had cancelled the $145 million contract. This statement was also refuted by the Finance Minister.

Paramount and the Malawian government said such reports “are not a true reflection of the situation. At the request of the Malawian Government, Paramount Group is engaged in ongoing constructive dialogue to replace the old contract in order to meet the Government’s requirements. This dialogue is intended to agree a way forward in the mutual interest of both parties.

“There also appears to be an insinuation by the report that the agreements entered into were not legal. This too is not correct. The Paramount Group contract with the Government of Malawi was concluded according to Malawian governmental processes and was signed by both the Ministry of Finance and the Ministry of Defence. At the time of signing, a legal opinion was secured from the Malawian Attorney General confirming both the legality of the agreement and its validity under Malawian law.”

The agreement with Paramount was signed by Joyce Banda’s administration. She was voted out in a May election and replaced by Peter Mutharika.

In November last year the Malawi Defence Force (MDF) Marine Unit commissioned seven new Guardian BR850 interceptor boats from Nautic Africa, in which Paramount has a majority stake. James Fisher, CEO of Nautic Africa, said that Malawi was in discussions to purchase additional larger boats from the company to patrol Lake Malawi.

In addition to the supply of patrol boats, Paramount is believed to be equipping and supplying Malawian peacekeeping troops in the Democratic Republic of Congo (DRC).

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