Suppliers give KCM final demand for unpaid dues

Suppliers give KCM final demand for unpaid dues
Written by Speedwell Mupuchi
Tuesday, May 05, 2009 4:55:57 PM

CONTRACTORS and Suppliers Association of Zambia (CSAZ) has given Konkola Copper Mines (KCM) up to tomorrow to pay its members their outstanding dues.

In a petition to KCM chief executive officer Kishore Kumar on Wednesday last week, the contractors and suppliers' body also rejected the 90 days period for payments for contracts and supplies made to the mining giant.

"The 90 days proposal which has since been effected by KCM is totally unacceptable according to suppliers and contractors and KCM must revert to 30 days payment terms," said association president Fanuel Banda.

Banda said the association members also want the convertible rate of exchange for invoices quoted in dollar to be paid at ruling exchange rates.

He said the contractors and suppliers had come to such juncture now because there appeared to be lack of trust and confidence between them and KCM.

He explained that when KCM proposed the 90 days payment period, his association felt the matter needed to be discussed further taking into account interest rates and exchange rate losses where items were quoted in dollars.

He said it was his association's view that the 90 days proposal should have taken into account the type of order or job the contractor or supplier was to engage in.

"The 90 days was not out-rightly rejected but required further negotiations. Depending on volume of business, a contractor might be happy to engage in a contract with KCM and accept 90 days depending on the value of the order. But you cannot apply the 90 days across the board," said Banda.

He said when the proposal was made, members expected KCM management to engage his association for further discussion and negotiations.

"I in fact suggested to KCM that a Memorandum of Understanding (MoU) should have been drawn to take into account various aspects like tax liability," he said.

Banda said going by the way things were happening, the contractors and suppliers were not 100 per cent sure whether KCM would pay them after the proposed 90 days.

He said the members at their last meeting resolved to have the 90 days payment period stopped and revert to the 30 days period.

"Contractors are now going up to six months without being paid. This means contractors and suppliers will not be in business," he complained.

Banda also said the contractors' body wanted to have audience with government to ensure mutual benefits among stakeholders following privatisation of mines.

He said contractors wanted a win-win situation.

Banda said experience had taught them that Zambian contractors and suppliers were in an extremely vulnerable situation when one considered the happenings in Luanshya and Chambishi mines where investors withdrew when things did not go well for them.

"We not trying to be enemies with government but we want them to understand we are at a learning curve," said Banda. "We are saying Zambians and investors must work together. ... We say you are the investor with money sleep in the bedroom, I will sleep in the kitchen; we are both warm, not a situation where one sleeps in the house and one sleeps outside and dies from cold."