Malawi risk losing K13bn for Lilongwe water project over Itaye: European Investment Bank queries LWB CEO’s recruitment.

European Investment Bank (EIB) which is financing a new water treatment plant for Lilongwe Water Board (LWB) has written Ministry of Finance querying the recruitment of Godfrey Itaye as the board’s chief executive officer (CEO) despite his alleged involvement in fraud and corruption.

The Lilongwe Drought Resilience programme intends to construct a new water treatment plant to increase the capacity to supply clean water to the Lilongwe city and the suburbs.

In a letter dated October 7 2020 addressed to Minister of Finance Felix Mlusu, which Nyasa Times has seen, EIB, which is expected to pump in 15 million Euros (about K13 billion) for the construction of the treatment works project in the capital city Lilongwe says Itaye’s recruitment may affect the process.

The letter was co-signed by the bank’s head of division (sub-Saharan Africa) Diederick Zambon and senior investment officer (sub-Saharan Africa) Jim Hodges, EIB.

Reads the letter in part: “The charged raised against the chief executive officer of Lilongwe Water Board will negatively impact our ability to conclude the finance contract with the Ministry of Finance as we are unable to have persons under criminal charge involved in our project, particularly given the relatively recent incident of irregularity.”

The financier has also expressed concern on Capital Hill’s decision to side-line it in the recruitment process despite an agreement to do so owing to previous corruption reports at LWB.

“On 9th April 2020, we received written assurances from the Ministry of Finance that a new chief executive officer for the Lilongwe Water Board would be competitively recruited and that the EIB and World Bank would be updated once the recruitment process is completed.

“Unfortunately, we did not receive such an update and consequently, it is difficult to determine if a competitive recruitment process was undertaken,” reads the letter.

It continued: “It was with much disappointment when we learnt of reports in the media that the newly appointed chief executive officer of Lilongwe Water Board had been arrested and may be facing criminal charges. This development, of course, causes an inconsiderable concern.”

EIB has also urged Malawi government to ensure that that another senior officer at LWB, Sinosi Maliano, who is facing charges by the EIB’s Fraud and Investigations Division, should not be involved in the project.

The EIB – one of the world’s largest lenders for the water sector and is owned directly by the 28 European Union members states – has a zero-tolerance policy on fraud or corruption.