Simbi’s K370 billion Giyani headache: Malawi billionaire returns home by private plane

…SA Govt moves to declare contract illegal

…accused contractors of inflating costs

….Khato completed 92% of works

Malawi’s construction billionaire Simbi Phiri on Tuesday this week returned to his base in Mchinji by a private jet, amid reports that the South African authorities are seeking a refund of payments made to his Khato Civils for the K370 billion Giyani Water Project.

Khato and Zambezi, which are Simbi’s companies were subcontracted by LTE to construct the 300km pipeline in Limpopo and according to the companies’ associates the Simbi companies delivered 92% of the work and only the remaining 25km has dragged on for six years.

The Giyani water project has dragged on and failed to meet its deadline of 2017 due to numerous controversies and obstacles, which a civic organisation in South Africa ActionSA had been mounting pressure about, to the extent of filing for an application in terms of the Promotion of Access to Information Act to access reports on the project from the department. 

Construction of similar projects (not actual image) Khato carried out in South Africa

The South African Government through the Department of Water and Sanitation (DWS) on Tuesday as Simbi landed in Malawi confirmed that there is progress made by the Special Investigating Unit (SIU) on investigations into the mismanagement of the Giyani Water Project under the Lepelle Northern Water Board in Limpopo.

It said the investigations “are bringing us closer to finality with regard to the tale of malfeasance that befell the water sector, costing billions of rands.”

The Investigations Report, wants it declared unconstitutional, invalid

The SIU made a presentation on the status and outcomes of its investigations into the Giyani Water Project to the Standing Committee on Public Accounts (SCOPA) in Parliament on 14 November 2023 and also to the Minister of Water and Sanitation, Senzo Mchunu, to update him on the progress with eight separate investigations related to the Department of Water and Sanitation (DWS) and its water boards, for which the SIU has obtained Presidential proclamations.

One of the major investigations relates to the awarding of a contract to LTE Consulting by the Lepelle Northern Water Board (LNW) in 2014, for the Giyani Water project. The SIU has completed this investigation and will be submitting the Final Presidential Report to the President shortly.

“The SIU has found that the R4,1 billion contract was irregularly awarded and is taking civil litigation action in the High Court to have the contract declared unconstitutional, invalid, and set aside,” said the statement from the Department of Water and Sanitation.

The Department says the investigations found that the supply chain management processes that were undertaken by LNW were flawed and contrary to legislation.

“It also found that the value of the appointment of LTE Consulting irregularly increased from R90 million to R2.2 billion, and later to R4.1 billion. It further found evidence of prices being inflated and a corrupt relationship between LNW, the service provider, and the department,” says the Ministry.

It adds, “The SIU has instituted civil proceedings by way of a damages claim in the Special Tribunal against former employees of LNW, to a value of R1.9 billion. The SIU has also successfully submitted court applications to the Special Tribunal to preserve the pensions of two implicated LNW officials. Furthermore, the SIU made a disciplinary referral to the Board of LNW in respect of two LNW managers in 2018, for negligence and contravening the PFMA. One of the managers resigned before the disciplinary hearing was held and the other manager was subjected to a disciplinary hearing by LNW and dismissed in 2022. The SIU has also made criminal referrals to the Specialized Commercial Crime Unit to investigate possible criminal charges against the two former LNW managers, for alleged collusion, fraud, and forgery.”

The delayed project

The overall progress of the limping Nardoni to Nsami water pipeline project is 95.7% to completion while the stagnant Giyani Water project bulk pipeline lags by 36% due to delays in procurement, poor performance, and termination of subcontracts, South African leading newspaper City Press quoted the Department of Water in September this year.

This Water and Sanitation deputy director-general Risimati Mathye was making a statement to a parliamentary committee and said it had issues with subcontractors who were not performing and some demanding more money.

“The department ended the subcontracts, reevaluated the scope of works, and was in the process of appointing capable contractors to complete the remaining works.  Meanwhile, the reticulation projects that were initiated in August last year to complete the water service value chain in Giyani are expected to be completed within 12 months of starting the work.,” it said.

Simbi returns home, is he being pursued for other reasons

Simbi Phiri returned home on Tuesday through Kamuzu International Airport using a private plane which was said to be the one he uses regularly after initially wanting to travel by road into Malawi.

The businessman, who is outspoken, and a close friend of President Lazarus Chakwera is said to have decided to return home until things in South Africa cool off.

Simbi: Home safe and sound for the festive holiday

“He will be around for a while,”  said a close associate.

Simbi’s treatment is said to be linked to South African politics as the country prepares for elections in 2024 and political posturing has seen people thought to have aligned with former President Jacob Zuma being pursued.

“You can’t be rich in RSA and play the same games,” said a South African national.

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