Centre for Democracy and Economic Development Initiatives (Cdedi) has asked the Ministry of Finance to suspend the Salima–Lilongwe Water Supply Company (SLWC) operations pending a forensic audit on management of funds.
Cdedi executive director Sylvester Namiwa alleged in a statement issued yesterday that the project, being implemented through a Special Purpose Vehicle (SPV) and financed by sovereign-guaranteed commercial loans, is “shrouded in secrecy” and warrants urgent scrutiny.
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He said: “It is our considered view that the project adopted by the Malawi Congress Party [MCP) regime has burdened Malawians even further as financiers of the project through government sovereign-guarantee loans.
“We, therefore, implore the newly appointed Minister of Finance, [Economic Planning and Development] Joseph Mwanamvekha to immediately suspend operations at the Salima–Lilongwe Water Supply Company pending a forensic audit.”
The project, implemented by Khato Civils, was first conceived during the administration of President Peter Mutharika between 2014 and 2019, but only secured financing under the immediate past MCP administration.
Namiwa alleged a pattern of mismanagement, including inadequate due diligence in subcontracting, discriminatory employment practices and possible externalisation of foreign exchange.
When pressed for evidence on his claims, he said he had “evidence and pointers”, but declined to provide specifics.
On concerns that a forensic audit might delay the project completion, Namiwa said: “Talking about time, I don’t think that the audit will take the whole year, and let me emphasise that they are already behind schedule for reasons best known to themselves.”
Meanwhile, a governance watchdog has cautioned against suspending the project entirely.
In an interview yesterday, Centre for Social Accountability and Transparency executive director Willy Kambwandira said halting works could result in greater losses.
He said: “We do not agree with the proposal to either suspend or abandon the Salima–Lilongwe Water Project. The project holds significant potential for the country in terms of health, development and long-term sustainability.
“But given the magnitude of public resources involved, it is only fair and responsible that government subjects the project to an independent forensic audit before committing additional funds.”
Khato Civils spokesperson Daniel Mababa said the contractor has “no immediate comment”.
In April 2023, Parliament passed the NBS Bank plc and National Bank of Malawi plc (Lake Malawi Water Supply Project) Loan Authorisation Act, mandating the Minister of Finance to borrow up to K105 billion from local banks to fund the abstraction and treatment of water from Lake Malawi at Lifuwu in Salima.
Under the Act, all repayments are charged to the Consolidated Fund, meaning taxpayers will ultimately bear the debt if the SPV fails to service the loans.
