Goodall says Khato seeks new financier in K400bn Lilongwe-Salima water deal

Minister of Finance, Economic Planning and Development Goodall Gondwe  who dislosed last year that  government has signed a deal with a financier of the K400 billion Lilongwe-Salima Project, effectively putting on course the project that faced several hurdles, has said the contractor Khato Civils is negotiating with new financier.

Finance Minister Gondwe: Water project awaits new financier

Gondwe is on record to have said last year that Khato Civils of Simbi Phiri identified a financier, Trissag Espanola of South Africa, but headquartered in London, to finance the K400 billion project.

“An agreement has been entered that 35 percent of the loan will be granted without interest,” Gondwe said last year as quoted in the local press, saying the  loan would no longer require approval from International Monetary Fund (IMF), as previously required, as it was not a sovereign guarantee anymore, but rather, a bank guarantee.

However, speaking in parliament last Thursday, Gondwe said Khato Civils is negotiating with a new financier.

“I have to tell you that this is a project that government will only have to guarantee because it is a statutory corporation project. It is not part of this budget except that at some point, we will have to come back to this House and inform you about its progress,” Gondwe said.

So far, Gondwe said  the Cabinet has approved according to the law governing guarantees that government  can go ahead with “guaranteeing the resources when we find them.”

He explained: “ The understanding is as follows: That the contractors will find the appropriate amount of resources which can be borrowed by the Statutory Corporation in question [Lilongwe Water Board]  and we will guarantee that; that is what the procedure is like.

“We have passed through a number of stages as far as negotiations of the finances of this project is concerned. In some cases, the so called financiers have, after due diligence, found to be non-existent. That is why up to now, we have not been able to go ahead with the project.”

Gondwe said government has asked Khato Civils to look for some more sources and they are doing so.

“As soon as they decide that this is a credible source of finances, we will come in and look at it ourselves.

“The other thing that we are doing, though this is a suggestion from the contractor himself, is that some of the projects may have to be subcontracted and they are discussing with the people who could assist in the construction of the pipe,” said Gondwe.

He said as soon as these two aspects have been completed, government will come in and finalise it and when that happens, the water project will start.

“ It does not need an authorisation bill,” he pointed out.

“Some of you have asked why it is not coming to Parliament. It will not require your approval, all we have to do is to tell you what we are doing and we will tell you why. That is what the law says and this is what is going to happen. This project can start anytime when these two conditions have been satisfied,” said the Finance Minister.

Khato Civils spokesperson in Malawi, Taonga Botolo,  confirmed they met  with a potential financier in South Africa last week but could not give details.

Malawi government had already paid Khato some money  in billions as part-payment for the works which  include mobilising and assembling equipment and works on Environmental and Social Impact Assessment (Esia).

LWB’s initial project of the Diamphwe Multi-purpose Dam Project, which was earmarked to avert the looming water crisis, hit a snag after the World Bank withdrew its financial backing.

 

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Chilungamo
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Chilungamo

Goodall Gondwe will go down in history as a finance minister that facilitated defrauding the very government he claims to serve. Examples are countless, he fabricated and signed a fake forex license to redeem his stealer colleague; he sold MSB at a give price lying it was bankrupt; he signed for a pay off kickbacks to MPs after they rejected the electoral bill in November, 2017, he was involved in Kutengule saga with finance.
This man is as dangerous as a serial conman himself. Malawians should trust him and his DPP at their own peril.

Concerned
Guest
Concerned

This stinks! I hope the South Africa financiers are not the Gupta’s. If you want a contractor to also provide the financing you stipulate this requirement in a competitive bidding process. Further, any guarantee provided by the government is a contingent liability on the government (and the tax payer). The Honorable Minister and IMF should know this.

Soeal phiti
Guest
Soeal phiti

So why give a contract who do not have money to do the job
Or now what the government do is pay them slowly pay as work completed in bits and pieces and bring a white South African engineer to overlook the work so it should b professional

Ndangodutsaaaa
Guest

This project is among “lozani zanu” as projects APM has done in his first term. Kani siyinati nkomwe

Le Senor de Los Cielos
Guest
Le Senor de Los Cielos

Khato wanuyo angokudyeranamponi ndalama. He abandoned a water project in Giyani Limpopo after spending close to R3 billion large (of part of the huge taxes I pay every month ku Joni kunoko). It’s all over the news if you just searched the company. He has been involved in lots of shady deals here in South Africa – and there is a huge possibility why Khato Civils suddenly “lost” the said financier they had before. I have huge doubts if anyone in their right frame of mind in South Africa would want to touch Khato Civils – not with the fire… Read more »

Ida
Guest
Ida

Yes i saw his abandoned project on SABC

Njolo mpilu
Guest
Njolo mpilu

Kkkkkk boma lathu limatenga ncito zose ngati ali ndi ma setifiket a skill yo.
Lelo kufuna financier???? My foot

mulokhowalomwe@gmail.com
Guest

mbava izi eti poti ndikwachewa yeti they are the people who are generating more than others tribes

Dipipi wa Yudiefu
Guest
Dipipi wa Yudiefu

Wantchito kufunafuna ndalama zoti bwana wake amulipire. This can only happen with DPP. These guys must go, and go now now.

Ambuje Kukaya
Guest
Ambuje Kukaya

Hon Gondwe please, tell us one line of story. How have we financed projects for Northern Region Water Board for instance the recently commissioned for Mzimba, Chitipa and Nkhata Bay?

I shall be honest with u.
Guest

Another source of information that need to be investigated throughly is that Government is paying for 28gauge of subsidised IRON SHEETS but the contractors are buying 32gauge which they delivery to people in rural areas.

This is another day light robbery by the contractors and some government officials.
ACB please investigate this by doing inspection of those Iron Sheet have been delivered to some rural areas.
You will end up agreeing with me.