Award of contracts to Khato should follow due proces: ‘South African firm to construct tollgates in Malawi’

According to media reports, the government signed a Memorandum of Understanding (MoU) with Khato Civils (Pvt) Limited of South Africa for three projects valued at $1 billion (about K780 billion) during the Malawi Investment Forum (MIF). Under the MoU, the Khato will construct tollgates, a modern bus terminal along the Likuni Road and a water supply system from Senga Bay to Lilongwe through the Lake Malawi Water Supply Project.

What is not immediately clear is who will fund the projects.  Is it the government or Khato or joint venture projects? From the nature of the projects, government will finance the projects probably with an element of some donor funding

By signing the MOU, the government is sending the message that the deal is sealed. And judging by the statement from Khato Public Relations Manager the company has clinched the deal to implement the projects. But one wonders on what basis government has awarded the projects and signed the MOU with Khato when no tender notice was issued. If anything, theprojects should gone through a tenderprocess so that other companies should vie for them. This also eliminates overpricing and enables government to have several options to choose from.

The core purpose of the Malawi Investment Forum (MIF) is to sell to investors the investment opportunities that Malawi has.  It is an opportunity for investors to get information on how they can invest in Malawi. This presupposes investors will make their investment decisions on the basis of information they get during the forum. It also presupposes that investors will use their own capital and invest in sector (s) that they would earn a return on their investment. They may also enter into joint venture with government or local a company, but they must contribute some capital.

So MIF is not a forum to award contracts to investors whether local or foreign. It should not be used as springboard for government to award investorscontracts. If the intention of investors is to win contracts, they should follow due process which is through tender. It raises eyebrows that when Malawians are expecting to hear that foreign investors have shown interest to invest in this or that sector, one hears that government has signed the MoU with a foreign company to implement projects. Come to think of it, whenwas the MoU negotiated since the MIF was only for two days? The impression that one gets is that negotiations were done a long time ago and the MIF was just used as an opportunity to sign the MoU.

That Khato has the capacity to undertake the projects is neither here nor there. The issue is how Khato has been awarded such multi-million projects without a tender. The awarding of government projects require due process to be followed.   They are not awarded at meetings, but through a transparent evaluation process.Government need to provide more information on the MoU (e.g. how they arrived at choice of Khato).

Any MoU between government and anycompany should emanate from a tender process. Otherwise some individuals may want to benefit from the MoU. What is so special about constructing a bus terminal or tollgates or water supply system or hotel that Khato should sign MoU without any tender? Can MPs, NGOs and other interest groups probe into the issue?

 

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6 thoughts on “Award of contracts to Khato should follow due proces: ‘South African firm to construct tollgates in Malawi’”

  1. Chitukuko says:

    This is what we want. Contractor gets funding from elsewhere, do the project and hand over to government. Not funding through DPP government thieves.

  2. E.F.F says:

    Bola madzi zingakhale bwino, koma Tollgates? for what? bwanji osapita kumagetsi aMalawi bwanij kodi kugona kumeneku?
    Ndiye kuti wina wayamba wafa kaye pamenepo.

  3. [email protected] says:

    Emeneka you seem to know more about Khato. Please enlighten Malawians. We do not want another cashgate. Do yo

  4. Waphuma says:

    Khato PYT civils is constructing these things on their bill and the MOU is that they should manage the services for a number of years before government taking over. Madzi wo ndi awo they will be selling to the customers not that government will be providing the service. Similarly, they will collect the money from toll gates for a number of years before government taking over. Thats what Khato is doing. There are no funds what so ever…its an investment of Khato, Mr Simbi Phiri…a guy from Mchinji who has big investments in SA, Botswana and Zimbabwe… but doesn’t boast around as this other prophet. So he has the welfare of the country at heart nothing else. Please, let us not mess up and bar this important project….

  5. Chitukuko says:

    I am happy that one Khato Company has offered to tap water from our long time intention to supply LL City perennial water supply. Thats the way to go. I guess this is an initiative of Khato and not that of the Government, so why giving it an open tender? As for Tollgates and International bus terminal, I think its a PPP arrangement. If there is any company that wants to challenge Khato, then let them come out. The issue of MIF to me its just a coincidence, otherwise negotiations were already underway. Ask yourself, what and how do Chinese do when they want to give Malawi Government infrastructure project? Do they use open tender system? Again, if Khato has money why should we dine it. In fact I find this arrangement more feasible because it will mitigate corruption with DPP govt thieves.

  6. Emeneka says:

    Baba dont waste your precious time Khato wawina kale tender no tender. Am assuming that you are a Malawian if correct then you know that even if Govt floats tenders we still flout rules and award to our favoured companies. This country is beyond salvation my brother/sister. By the way do you know who is dealing with Khato? Pse pse just just pray that leprosy kills all DPP politicians basi.

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