Ocean Eagle, one of the controversial patrol boats now under construction in France for a Mozambique company
The Mozambique Tuna Company (EMATUM) is not a ghost company, as claimed by Renamo, but has been legally set up, with offices, company bodies and a tax identification number, declared Fisheries Minister Vitor Borges on Thursday in the country's parliament, the Assembly of the Republic.
EMATUM is mired in controversy because of the purchase of 24 tuna fishing vessels and six patrol boats from a shipyard in Cherbourg, France. This was financed by EMATUM issuing bonds to the total value of US$ 850 million on the European markets. Repayment of the bonds, at 8.5 percent interest, has been guaranteed by the Mozambican government.
On the second day of a parliamentary debate on the matter, Borges said that, contrary to opposition claims on Wednesday that the state owns 85 per cent of EMATUM, in reality the figure is only 67 percent.
But the true shareholding structure of EMATUM can be readily found in the official gazette, the Boletim da Republica. The majority shareholder is the government’s Institute for the Management of State Holdings (IGEPE), with 34 percent. The fishing company Emopesca holds 33 percent. 80 percent of Emopesca is owned by the Mozambican state and 20 percent by the Fisheries Promotion Fund, which is a state body.
The third EMATUM shareholder, with 33 percent, is GIPS (Management of Investments, Holdings and Services), which is a limited company, but when it was set up in January 2012, 70 percent of its shares were held by the social services of the State Intelligence and Security Agency, SISE. A minority shareholder, Joia Haquirene, sold his 30 percent to GIPS itself in March this year.
Borges said that while the boats only cost US$ 300 million, the rest of the money would be spent on radar equipment, satellite communications, onshore installations, transfer of technology, licence fees, training, and the running costs and payment of interest on the loan for the first year.
He denied that there was any risk that EMATUM would default on its repayments and that the government would be obliged to bail it out.
A viability study had been undertaken which showed that the purchase of the boats was economically viable, the Minister stressed, From the second year of EMATUM’s operations onwards, the company would be able to pay for its own running costs and service its debt. Borges predicted that when the fleet is fully operational it will bring in revenue of US$ 200 million a year.
We want to assure you that the fiscal risk has been taken care of, he told the deputies.
Contrary to Renamo claims, there was nothing secretive about the deal, Borges added, since it was a public bond issue. Nor did it have anything to do with acquiring military equipment.
Operations on this market do not provide military material, Borges said, insisting that nothing in the bond issue was intended to purchase weaponry.
He said the patrol boats are not combat vessels, but would be equipped with state-of-the-art technology to provide early warning of any threats.
The opposition was not convinced. Jose Manuel de Sousa, of the Mozambique Democratic Movement (MDM), said that while he was all in favour of tuna fishing being done by Mozambican rather than foreign vessels, he queried the legality of the governments guarantee. He pointed out that it vastly exceeds the limits on government guarantees set by the 2013 budget law. Article 11 of that law sets a maximum limit to government guarantees of 183.5 million meticais (about US$6.1 million).
Sousa noted that the EMATUM bond issue was equivalent to six percent of Mozambique’s gross domestic product, and that the governments Economic and Social Plan (PES) for 2013 did not mention acquiring a tuna fleet.
He added that the original bond issue was only for US$ 500 million. It was oversubscribed, and so EMATUM issued a further $ 350 million worth. He calculated that the annual payments to the bondholders, in interest alone, will be $ 53.6 million.
Renamo deputy Alberto Sabe claimed that EMATUM is run by SISE, and asked why an intelligence service should be involved at all.
Summing up the debate, Prime Minister Alberto Vaquina said the government was determined to diversify the economy. Its strategy was for an integrated and balanced development of all the countrys resources, so that the economy will still be viable after the minerals have been exhausted.
Currently tuna fishing in Mozambican waters is undertaken almost exclusively by foreign vessels. Of the 130 ships licensed to fish for tuna, only one flies the Mozambican flag. Furthermore, Vaquina believed that the catches by the 129 foreign ships are understated because we are not able to undertake effective inspection.
The only benefit Mozambique currently obtains from tuna fishing is the million dollars a year paid in licence fees.
Vaquina thought that the fears that EMATUM would not be able to service its debt were unfounded. He pointed out that there were similar fears when, in 2007, Mozambique took a majority stake in HCB, the company that operates the Cahora Bassa dam on the Zambezi. This involved debt of 700 million dollars to a banking consortium.
Six years had passed, Vaquina said, and Mozambican had proved they could run the dam. Since the takeover, there has been an enormous improvement in HCBs contribution to the economy. Mozambicans can do what others do just as well, or better. source AIM
