Donors protest Salima-Lilongwe water project: World Bank withholds K60bn to Malawi

Malawi government has said World Bank has not released the K60 billion budget support from the World Bank, which was expected in August,  has not be released, as the  donors had  raised some issues including the decision to proceed with the Salima-Lilongwe water project – whose contract was given to Khato Civils Limited that unveiled the multibillion Kwacha project in 2016.

Secretary to Treasury Ben Botolo told Budget and Finance Committee of Parliament in Lilongwe on Wednesday that World Bank has cited the decision not to disburse the budget support to be linked to the controversies surrounding the Salima-Lilongwe Water Supply Project whose contract was allegedly granted without following procurement and procedures.

Botolo said the donors have, therefore, pressured the World Bank “not to proceed with the disbursement of the budget support.”

The World Bank was expected to provide K60 billion in budgetary support of the K209 billion in grants.

The development partners and some civil society activist have been pushing for the halting of the project following lack of an environment impact assessment and feasibility study before Khato of Malawian billionaire Simbi Phiri was awarded a contract.

Khato Civils Limited  won the $500 million (approximately K360 billion) contract on  restricted tender process  where six civil engineering companies participated and these were Khato, Sinohydro Corporation, PW Engineering, Mota-Engil, China Railway and CMC di Ravenna.

The Salima-Lilongwe water project has no funding allocated to it in the financial plan for 2018/19.

Finance Minister Goodall Gondwe said the financing committee was taking time to ensure due diligence was done.

“Once this is done, we will seek the necessary waivers from the International Monetary Fund,” he said.

Khato Civils, is a construction and engineering company headquartered in South Africa and owned by a billionaire Simbi Phiri businessman whose father is from Malawi,

The company already unveiled to the media multi-million kwacha machinery for the construction of the pipeline from Lake Malawi in Salima to Lilongwe to ease water problems in Lilongwe, disclosing that $13 million (K9.8 billion) had already been invested in the project.

President Peter Mutharika is on record to have hit at development partners for allegedly interfering in the project’s implementation.

But Mutharika did not name the development partners allegedly pushing for the halting of the project whose setbacks have included lack of an environmental and social impact assessment (Esia) and feasibility study before the contract was awarded to Khato Civils Limited.