Financing for Salima-Lilongwe Water Project not ready, says Malawi Finance Minister

Minister of Finance, Economic Planning and Development Goodall Gondwe has responded  to calls from opposition Malawi Congress Party (MCP) and Budget and Finance Committee in Parliament on why the Salima-Lilongwe water project has no funding proposals in the 2018/19 budget, saying government is yet to identify funds.

Goodall: No funds

The Salima-Lilongwe water project – whose contract was given to Khato Civils Limited that unveiled the multibillion Kwacha  project in 2016 –  had no funding allocated to it in the financial plan for 2018/19 being discussed in Parliament.

“The 2018/19 annual budget , Mr Speaker Sir, is also silent regarding the future of this water project. Even the country’s current Public Services Investment Charter does not include Salima-Lilongwe Water Project,”  said MCP spokesperson on finance Kusamba Dzonzi.

But 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 Monetray 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.

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M'Malawi Weniweni
M'Malawi Weniweni
4 years ago

Do we really believe Malawi can borrow from commercial lenders $400m to $500m in one transaction without damaging the economy? You want to recreate unsustainable debt burden of the 90s?
In my opinion the Salima-Lilongwe water project (like Shire-Zambezi waterway) is one where both opposition and government know that it will not happen but each want to gain political mileage from it by appearing to champion it.

Kamuzu
Kamuzu
4 years ago

Amalawi we forget too early. SIMBI once said funding for the project or rather financing of the project would be done by Khato. It’s a shame and a shock that lero aziti the budget must have that funding.

#DzukaniAmalawi
#DzukaniAmalawi
4 years ago
Reply to  Kamuzu

Financing will be raised by Khato Civils on the strength of Government-backed guarantee. A give government is a contingent liability in the govt books therefore as good as cash; hence the need to budget for it in case there’s a default on repayment. Mr Kamuzu, I urge you to research these rather complex matters so that you’re full informed before commenting. We all learn everyday.

Captain
4 years ago
Reply to  Kamuzu

I agree with you. Nane ndikudabwatu

Ndatopa
Ndatopa
4 years ago

Another poorly conceived project which will end up like the ill conceived Nsanje port

mtete
mtete
4 years ago

And when will it be ready bwana?

wodyazake akibe mulandu
wodyazake akibe mulandu
4 years ago

SAD FOR MALAWI -YOU HAVE STOPPED PPLE ALONG SALIMA ROAD TO MAKE THIER

Alex
Alex
4 years ago

This contract was awarded doubioucly, no environmental impact assessment!!

Kholowa
Kholowa
4 years ago

Yes funding for water is not ready but documents to bail out chaponda out of trouble was very quick and ready though you were not permitted to do so! Too old for this job when are you going to retire? You gogo’s you want to end up in prison? Cant you see that we are closing the gap everyday?

Gwemula
Gwemula
4 years ago

Those gogos were saying we mustn’t frustrate their efforts to implement this project Now you say there’s no funding for this project hahaha why mmaoneka kuchenjela pakamwa pomwe pansi pa mtima mukudziwa kuti it will not happen any time soon!! akutulukirani agulukunyinda anzanu omwe muwatcha kuti ma development patnerskuti mmafuna kusolola Muisova poti ndinu ana Manyonyolo apa tauni pano Maigwe!!

#DzukaniAmalawi
#DzukaniAmalawi
4 years ago
Reply to  Gwemula

IMF/World Bank or even AfDB have no interest in supporting this ambitious project purely because of lack of governance in terms of procurement processes (not followed). The project may be necessary and key to Malawi development but due t o it’s sheer there was need for transparency and due care in awarding the tender; it seems none of theses happened. Kato Civils must have spent a fortune in bribing govt officials and political parties and more in positioning very expensive equipment in Saline and Lilongwe. I guess this is one of the risks in doing business in Africa and specifically… Read more »

Makolija
Makolija
4 years ago

Kikikiki! a Emusipi munya. Khato wakutumani kuti mufulumidzitse contract mupeze funding ya campaign. A DPP akudziwa kale zimenezo!!!!

We will catch water upstream!!!!!!!

#DzukaniAmalawi
#DzukaniAmalawi
4 years ago

Khato Civils had indicated that the Due Diligence was conducted and finalised and Honourable Gondwe’s view is that it is still to be done. Khato Civils has already mobilised and positioned heavy-duty equipment ready to commence the project therefore any delay will cost the contractor a significant amount of dollars. Who is going to shoulder that bill? Also if DPP loses the elections next year, what assurance has the government extended to the contractor that the whole project won’t be cancelled (the contract hasn’t even been signed so the contractor isn’t protected under Malawi laws). This would be unfair to… Read more »

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