Mozambican Transport and Communications Minister Mateus Magala has all but confirmed that government will renew the management contract with the South African aviation company Fly Modern Ark, which was hired in April 2023 to help turn the fortunes of publicly-owned airline LAM (Linhas Aéreas de Moçambique – Mozambique Airlines).
Magala’s comments came a day after the Chairperson of the Board of Durectors of the State Holdings Management Institute (IGEPE), Ana Isabel Coanai, had appointed the Executive Director of Fly Modern Ark, Theunis Christian De Klerk Crous, to the position of interim director general of LAM.
Theunis Crous replaces João Carlos Pó Jorge at the helm of LAM.
According to a LAM press release, signed by Coanai, who is also chairperson of the LAM board of directors, Theunis Crous’ term will run until 30 April 2024, coinciding with the decision on whether to extend Fly Modern Ark’s contract to restructure LAM.
Comment
Fly Modern Ark entered into a management partnership with LAM in April 2023 to help stop the decades of financial haemorrhaging and mismanagement. After 45 days, Fly Modern Ark reported that it had managed to reduce LAM’s debt by $47.3 million out of $300 million, and revenues had gone up by ten percent.
However, observers argued that Fly Modern Ark’s claims were a result of an accounting sleight of hand rather than genuine improvement in LAM’S accounts.
And quickly, Fly Modern Ark drove the narrative that there had been systemic corruption involved overcharging for the services provided and, in some cases, there were no contracts. Theunis Crous went to the extent of accusing the Mozambican administrators responsible. “They ran the company the way they wanted,” adding that they are strongly “resistance to change.”
Meanwhile, operations improved slightly but true to type, flights started arriving or leaving late, leaving passengers stranded.
Somehow, LAM started flying to Lisbon and no business plan was ever made public. Critics wondered what had driven Fly Modern to ply the Lisbon route and how long would it take to reach the break-event point; and strangely LAM announced that it would also fly to some countries in the Southern Africa region like Zambia, which was said not to make sense.
Eventually things came to a head with Fly Modern Ark and LAM managers exchanging accusations, and IGEPE has decided to fire LAM’s general manager, the weakest link.
Coincidently, Theunis Crous is appointed almost two months before a decision can be taken on whether or not to renew the restructuring contract. But as Minister Magala said the renewal of the contract will be a mere formality.
Magala’s statements are not that strange. He has appeared in instances where he arrogated to himself the role of spokesperson for the dubious success and doubled down on clarifications that should have been the purview of Fly Modern Ark or LAM.
Some think that dubious and strange role might expose Magala to the enormous conflict of interest: spokesperson for Fly Modern Ark or Minister of Transport and Communications?
Such suspicions will only be stoked after Magala’s latest comments, especially because he seemed to have usurped IGEPE’s powers to adjudicate on the matter.
Also, what does the renewal of the contract mean to the management of LAM? Will Theunis Crous continue at the helm of the company or government will appoint a Mozambican? If so, what structure will be put in place to ensure that everything will be done above board?
Furthermore, isn’t there a potential conflict of interest with the executive director of the consultant aviation company becoming the director general of LAM? For example, who is going to authorize the monthly payments to Fly Modern Ark?
Meanwhile, Magala would rather Mozambicans take him at face value when he says that “this is a normal process. We’re making it more dynamic.” Is this not one more end of term phantasmagoric case?
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