Malawi to engage World Bank, IMF on Salima-Lilongwe Water project
Malawi government says it will engage the International Monetary Fund (IMF) and the World Bank on the financing of the Salima-Lilongwe Water project.
Ministry of Finance Principal Secretary, Ben Botolo in a statement madeavailable to Nyasa Times said the project was still in the offing and that it has not been abandoned.
Major questions have also been raised about whether the US$500 million project – to pump water from Lake Malawi to the capital Lilongwe – makes financial and technical sense.
The project was awarded to Khato Civils Ltd as the guarantor for the loan to finance the project.
The chief executive of the Lilongwe Water Board, Engineer Alfonso Chikuni, said Malawian billionaire SimbiPhiri’s companies, Khato Civils and South Zambezi, had been “identified” and “would carry out feasibility studies, procure and construct” in a turnkey arrangement on the Lilongwe-Salima scheme.
In the statement Botolo said both a feasibility study and an environmental impact assessment have been completed and what was remaining is funding.
Government’s courting of IMF and World Bank will be in line with the Heavily Indebted Poor Countries (HIPC) agreement which makes countries like Malawi eligible for assistance from the two institutions.
Khato Civils has so far claimed to haveinvested over K9 billion in project machinery.
The project was halted after the Malawi Law Society filed a lawsuit on the grounds that the Water Board awarded the contract before carrying out the necessary studies. The court in October last year ruled in favor of Khato.
Debate was re-ignited again during the presentation of the 2018/2019 national Budget statement where the project was conspicuously missing on the list of infrastructure projects mentioned in the financial plan.
Simbi said the project would be “a catalyst for growth, as it will not only improve drinking water, sanitation, hygiene and waste water management, (but) will see the growth of industries and the manufacturing sector leading to the growth of new towns”.
He said it would also create 4,000 jobs.
The president of the Malawi Institution of Engineers, David Mzandu, said the project is technically possible, but added: “I cannot invest my money in something where I am not sure if I will get returns. If you are going to invest, you must know the economic viability.
“I am sure government is aware that such a huge project requires a feasibility study.”
Major questions about the scheme were raised by one of Malawi’s foremost water experts, Kenneth Wiyo in two articles published in local newspaper.
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Please save yourself some embarrassment. Even a 2 year old knows that you can not pump water upstream, this is laughable, pathetic
The project will fail the rigorous IMF and World Bank scrutiny and minimum governance requirements. The institutions are already supporting the Damphwe Dam
So government signed a contract with Khato without first identifying funds? What will happen if IMF and World bank say no? Will poor Malawians be expected to pay for breach of contract to Khato?
The World Bank and IMF will throw this request out owing to adequate Public Investment analysis. The project at hand was poorly selected, will be fraught with serious procurement infractions through the single source contract, possible cost overruns since it will be used to funnel resources to the DPP, fiscal unsustainability and the fact that Malawi cannot basically not afford a project of this size.
Corrupt project. TO corrupt man. By corrupt government