Simbi’s Khato blames Treasury on Salima-Lilongwe water project delays
Multi-billion Salima-Lilongwe mega water project contractors have blamed the government for the five year delay to start the project.
Khato Civils says the delay to kickstart the project is due to Ministry of Finance’s delay to sign a loan guarantee with the financiers the company has identified.
The South Africa-based Khato Civils chief executive officer, Mungozi Munyani said this on Thursday monring to the Parliamentary Committee on Natural Resources and Climate Change.
Speaking via video link from Johannesburg, he said Khato Civils-South Zambezi Joint Venture— submitted the designs and all the required documentation in August this year.
“We are ready to roll out the project. Our only challenge is that the Ministry of Finance has not signed the loan guarantee,” he said.
Khato Civils chairperson Simbi Phiri – a Malawian business mogul based in South Africa recently said his firm is geared to execute the much-awaited project to tap water from Salima to Lilongwe with a reduced cost by $102 million (about K73 billion).
The Lilongwe-Salima Water Supply Project has always stirred controversy as the project, for years, failed to roll out.
Simbi Phiri at one point blamed some politicians during the administration of Democratic Progressive Party (DPP) and some government officials, saying they were bent at frustrating the project for their own selfish reasons.
But the new Tonse Alliance administration has resolved the bottlenecks and allowed the project to be start in earnest which has seen the two sides held a virtual meeting where government was represented by Ministry of Finance, Department of Environmental Affairs and the Lilongwe Water Board.
The committee’s chairperson Welani Chilenga said it is a concern that five years have elapsed since the signing of the agreement of the project but the project is failing to take off.
He said the project is important as it would ease water problems facing Lilongwe and surrounding districts.
The Salima-Lilongwe water project has been a subject of legal battles with the civil society taking the government to court for awarding the firm the contract before an environmental assessment was done, a matter which Khato Civils won.
The project, if done, is expected to provide water to the city of Lilongwe via a 120-kilometre pipeline from Lake Malawi.
Khato Civils is on record to have said that it spent $71.2 million of its money on the required processes prior to starting the project.
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This will not end well
Was there an open bidding for the project? There was no transparency in the bidding and costing of the project! The Chinese could probably have done it much cheaper and faster with their own financing! They have deep experience in mega projects! Just go to China- they have done breathtaking engineering feats! Khato has no portfolio to even endeavor such a project. This needs to be revisited and started from scratch
My brother, you need to be freed from mental slavery. Why believing that the Chinese would do it better than Khato Civils? Have you taken time to check on what Khato Civils has done in RSA, Brazil, Botswana among others?
Malawi needs such kind of impactful projects which can change economic fortunes of the country. Unfortunately it is more of the same problem. The network is frustrating the programme.
There are technical matters of construction and matters of finance for the project. It seems Khato has a hand in both. Sounds strange. It’s like I win a Government tender to build a house and I go to negotiate with National Bank on behalf of the Government for the loan to build the house. I wouldn’t be surprised if one day, after the project is completed, Malawians would discover that the infrastructure actually belongs to Khato, and the Government has only got a 5 year concession to use it, and beyond that Khato will levy a fee forever.
It was a PPP project, and as part of the deal, Khato was supposed to identify and secure financing with a Gov Sovereign Guarantee. Khato would still be part of the project until the last day that the loan was repaid to the financier. This is a normal occurrence in such projects, because the money to repay would come out from sales proceeds of the water.
As a nation, we need to be serious on issues that stand to benefit the masses; not few selfish individuals. At hand, is this important project aimed at bringing sustainable water supply to millions of people; yet, some people can afford to frustrate it for five good years. And we all hear that water is life; again, this happens to be safe water. If the first President of Malawi, Kamuzu, was going to give lame excuses like costs, we could not have had a lot of infrastructures which we see now. Roads (M1), the University of Malawi, the Capital Hill,… Read more »
Kutitenga ngati zitsilu.
The contractor made his own design of the project wondering if there was no any independent expert who could have designed the scope of works for all to apply.He further directed the government to his own financier for the loan. No wonder for such a huge discount of $102m. A total rip-off!
Where did the USD102 million (73 billion Malawi Kwacha) ‘come’ from? You do not need a ‘Arithmetician’ to show you that …….. !