Govt slow on water project

Will the project ever kick off? After years of court battles on how the K400 billion Lilongwe-Salima waterway contract was awarded to Khato Civils and when dust appeared to settle, financing of the project remains another hurdle.

Minister of Finance, Economic Planning and Development Goodall Gondwe disclosed to Nation on Sunday early October, last year, that government discussed and arrived at an agreement with a financier that Khato Civils identified.

Gondwe had hinted that the agreement was signed but what was remained was Cabinet approval, after some changes were made in the loan agreement.

Today—more than four months down the line—the situation on the ground remains as it was, to the extent that government has failed to fund a company set up to oversee the implementation of the work, Lilongwe-Salima Waterway Project. 

Chief executive officer (CEO) of the Lilongwe-Salima Waterway Project, Modesta Kanjale, appointed on December 12 2017 to oversee the project, said in an interview on Thursday that implementation works have not started as government is yet to approve changes that were made in the loan agreement.

She said her office has not received funding to enable them to start implementation works, adding that only a few paperwork was done, but the office was yet to get funding for operations.

Kanjale explained that being on secondment, she is still getting her perks as director of water resources in the Ministry of Agriculture, Irrigation and Water Development.

She insisted that the Ministry of Finance, Treasury specifically, is the right institution to shed more light on the project in as far as funding was concerned.

Owners of the project, Lilongwe Water Board (LWB), when asked about progress being made, said in a written response by the board’s CEO Alfonso Chikuni, that things remained as they were last October [when the minister of Finance hinted that Cabinet was to meet to review changes in the loan agreement and for approval].

A source at the Ministry of Agriculture, Irrigation and Water Development said the Lilongwe-Salima Waterway Project is highly politicised and it has always been difficult to tell which way government wants to take in as far as its implementation is concerned.

“The biggest problem is that such signed agreements always have timeframes on when certain things are supposed to be done. Let’s hope we will not lose this financier,” the source said.

Secretary to the Treasury Cliff Chinunda asked for a questionnaire on Thursday, which was duly sent to him inquiring about the way forward on the project, among other issues.

He kept on assuring that he was working on the response, and on Friday he said it was ready and would be sent, but he did not send by close of business.

Yesterday morning, the ST said he had the responses and he was going to e-mail, but by mid-day there was nothing. A phone call and WhatsApp reminders were made and he assured he was sending.

But he could not pick several subsequent calls until late in the evening when he sent a WhatsApp response that said: “Sorry, the response not ready yet”.

Gondwe was also not available from Wednesday and several calls from Friday to yesterday went unanswered.

Khato Civils spokesperson Taonga Botolo declined to comment on the matter.

Gondwe in October said government had discussed with the financier, Trissag Espanola of South Africa, identified by the contractor of the project, Khato Civils, to fund the project.

The financier is headquartered in London.

Gondwe said then: “An agreement has been entered that 35 percent of the loan will be granted without interest.”

He had said the deal no longer needed endorsement of the International Monetary Fund (IMF), as previously required, because it was no longer a sovereign guarantee, but rather, a bank guarantee.

Changes in the loan agreement included 30 years repayment period, from 15 years, and that apart from just taking the water straight from Salima to Lilongwe, diversions would be made in Salima for irrigation in the project’s second phase, according to the Finance Minister.

The funds were supposed to come from commercial banks.

Gondwe had also confirmed that government had also made some part-payment to Khato Civils for the works, but he could not provide the actual figure.

He had disclosed that LWB asked government for the payment towards preparatory works the contractor has done so far.

The works, according to Gondwe, included mobilising and assembling equipment and works on Environmental and Social Impact Assessment (Esia).

LWB CEO could neither confirm nor deny the payment made to Khato

LWB’s initial project of the Diamphwe Multi-purpose Dam Project, which was earmarked to avert the looming water crisis, hit a snag after the World Bank withdrew its financial backing. n