…moves Salima-LL water project to OPC
…NGO blocks National Bank, NBS not to disburse K105 billion
The High Court of Malawi Judge Ken Manda might have saved millions of starving Malawians from paying for a K105 billion loan which will be used by a company owned by a friend of President Lazarus Chakwera who has moved the Salima-Lilongwe Waterway Project from relevant line Ministries to his office.
Justice Ken Manda issued an injunction prayed for by Fryson Chodzi of Forum for National Development (FND) stopping the National Bank of Malawi and NBS Bank from lending the Malawi Government K105 billion approved by a kangaroo Parliament on the 6th of April this year. Parliament rushed through the bill to avoid scrutiny and President Chakwera’s Malawi Congress Party (MCP) MPs used their numerical strength to bulldoze it through, Leader of Opposition Kondwani Nankhumwa is quoted by The Weekend Nation.
At the centre of it is Khato Civils which according to senior civil servants at Capital Hill is larger in life as it literally controls meetings and outcomes with direct pressure from the State House. Even Minister of Finance Sosten Gwengwe and Minister of Water Abida Mia have no say on what Khato wants.
“The project is Lilongwe Water Board project. The government was supposed just to guarantee borrowing according to the original contract with Khato and Lilongwe Water Board. Now the Government is borrowing on behalf of a private company which is highly unusual and irregular. This is a fraud,” a senior Treasury official raised the red flag.
Khato has failed to find a financier and a government procurement specialist says this means the contract should have been terminated and new conditions warranted that the project be retendered to the public so that those with the capacity to raise financing could do so without burdening the taxpayers.
The World Bank and IMF have warned that borrowing for the project could raise the country’s debt which is already running out of control, meaning the two institutions would not support Malawi if it chooses deliberately to borrow more. President Chakwera seems determined to snub the two institutions.
Chodzi in his affidavit argues that with the Cyclone Freddy recovery efforts being slow due to lack of money, it is insensitive for the Government to borrow on the “back of suffering Malawians” whilst no money has been borrowed to facilitate recovery.
“The lending is not in the public interest as the prevailing public interest is the redevelopment of the southern region of Malawi heavily affected by Tropical Cyclone Freddy and the Government is yet to source MWK800 billion; MWK100 billion for immediate response and MWK700 billion for redevelopment,” prayed Chodzi through his Lawyers Whyte and Cross Law Consultants.
He adds, “Lending the Malawi Government the said money is contrary to good corporate governance as good corporate citizenship entails being responsive to pressing social needs and the Project is not a priority to the developmental need of Malawians thereby putting taxpayers’ money to bad use.”
The Civil rights leader presented to the court that Lilongwe Water Board had already advanced its Diamphwe Dam project which has backing of the World Bank and other financiers. He questions why the government is rushing through with a similar project which has no money.
“The Government has managed to legitimize bad borrowing and the only remedy available to the people of Malawi is to restrain the Defendant banks from lending the Government any money for the Project and restraining the 3rd Defendant from proceeding to perform the contract on the basis of the Bill passed in Parliament for the Government to borrow money for the Project,” said Chodzi in his affidavit.
He adds that both National Bank and NBS Bank are public limited companies that are supposed to use “good judgment” in lending money that will be paid by the public.
“Members of the public hold 26.5% of the 1st Defendant’s shareholding. Members of the public hold 32.81% of the 2nd Defendant’s shareholding. The said members of the public are from all over the country as both banks have a national reach.
“The priority public interest between the Project which only benefits 3 (three) districts of the central region versus millions of people in 13 (thirteen) districts in the southern region affected by the cyclone, I believe the development of the people in the southern region ranks high,” he added.
Treasury and Ministry of Water officials played hide and seek on why the newly amended Khato Contract has not been produced to the public who are now financing the project, whilst the Office of the President and Cabinet continues to refuse to account to the public through media or even at Parliament where the Secretary to the President and Cabinet Colleen Zamba has defied summons more than once.
President Chakwera and Khato’s owner Simbi Phiri once shared a stage with Congolese superstar Awilo Longomba when the latter celebrated his wife’s birthday.
Simbi Phiri has openly said he supports Malawi Congress Party and the DPPP financially.
The injunction was granted by Justice Ken Manda on Thursday and pro-Khato’s media has already attacked the judge’s integrity for stopping this potential fraud.
The Government’s response to the injunction should reveal whose interest President Chakwera is serving.