…. K100bn claim to be assessed
….proposes new water selling company
By Kondwani Munthali
The K425 billion (US$315m) Lilongwe Salima water project’s future will be decided by Cabinet as government has proposed new financing model, including setting a new company to sale water ti Treasury has said.
Khato Civils Communications specialist Daniel Mababa says his company is waiting to hear from Government on the future of the project.
Indications are that Quay Limited, the Australian registered firm that was touted to be used to arrange financing will no longer be in the picture and the amount to be borrowed will be reduced.
Secretary to the Treasury Dr MacDonald Mafuta Mwale confirmed to the The Investigator Magazine on Tuesday that there have been a series of meetings between Khato Civils and his office.
“We had meetings where he came to inquire government position with regards to the water project as there was no progress in mobilising resources since 2016 when they signed a contract,” said Mafuta Mwale.
The Treasury boss said the major agreement was to change the financing model from relying on foreign borrowing to a hybrid model to seek domestic and foreign debt and equity financing.
“To reduce impact on debt, government is considering the equity option where private sector and diaspora buy shares and own the company that will sell water to Lilongwe Water Woard and Central Region Water Board,” said Mafuta Mwale, signalling that a new company with public traded shares might be set up to sale water.”
He said there was no pressure to proceed with project but looking at it’s merit government through cabinet will decide to proceed or not.
The World Bank and other major donors have questioned the project as another dam was designated to be at Diamphwe whose financing was already identified.
Simbi Phiri, owner of the Khato Civils is politically connected and is a personal friend to almost every political leader. He confirmed to have financed most of the major parties inclusive DPP and MCP.
He claimed K100 billion (US$74 million) in 2018 when the project stalled saying he had spent the amount to mobilise equipment. He had already been paid K23.4 billion (US$18 million) according to officials familiar with the project.
Mafuta Mwale said the government was in the process of verifying Simbi Phiris claims.
“We currently have unverified figure the contractor is claiming to have spent since contract signing through mobilisation, feasibility studies and designs. Not in a position to mention as it is unverified. Whatever claim will be less by what was already paid,” said Mafuta Mwale.
Simbi Phiris spokesperson in Malawi Daniel Mababa said the claims were in the event of the project being cancelled in totality.
“We are waiting for Government to indicate the way forward for the project. Once they do I an sure the public will be informed,” said Mababa.
The project was supposed to pump water from Lake Malawi to Lilongwe as part of long term solutions to easing water challenges in the capital city.