A total of US$28.5 million (€23.6 million) worth of goods had been acquired when the gas project in northern Mozambique was suspended, the Confederation of Economic Associations of Mozambique (CTA) announced.
“The estimated value of goods acquired to supply the Area 1 project [consortium led by oil company Total] amounts to around US$28.5 million [23.6 million euros], of which US$12.79 million [€10.61 million] (corresponding to 45%) were in stock and US$15.72 million [€13.04 million] in transit,” according to a CTA document consulted by Lusa.
The business association noted that “a considerable part” of the goods are perishable, which exacerbates the losses of the supplier companies.
The CTA estimated that total losses recorded by the business sector with the suspension of the gas project resulting from the attack on the town of Palma on 24 March amounted to around $148 million (€122.7 million).
On 20 April, CTA and Total decided to set up a joint team to tackle what the business association labelled a nightmare of late payments to Mozambican companies following the attack on Palma and the oil company’s indefinite withdrawal.
The two sides agreed to create a joint task force to map the outstanding payments and whose goods had been ordered by the contractors and facilitate, contract by contract, the fulfilment of obligations with small and medium Mozambican companies.
Total has guaranteed that it has already paid all the companies with which it has contracts. Still, these companies have also subcontracted others, mostly Mozambican, which may not be making payments, said the CTA president, Agostinho Vuma.
The next step is to survey to see who these companies are and what is going on.
Armed groups have terrorised Cabo Delgado since 2017, with some attacks being claimed by the extremist group Islamic State, in a wave of violence that has caused more than 2,500 deaths, the conflict registration project ACLED pointed out, and 714,000 displaced people, according to the Mozambican government.
The attack on Palma, near the gas project under construction, caused dozens of deaths and injuries.
The Mozambican authorities regained control of the town. Still, the attack led oil company Total to abandon the project scheduled to start production in 2024. Many of Mozambique’s expectations for economic growth in the next decade are anchored.
