Minister of Transport and Public Works Jappie Mhango yesterday unveiled National Bank of Malawi (NBM) plc as financier of the 28.4-kilometre (km) Lot 2 of the Golomoti-Monkey Bay Road valued at K100 billion.
The section extends from Golomoti Trading Centre in Dedza to Chantulo Trading Centre in Mangochi while Lot 1, covering 30km and funded by FDH Bank plc also for K100 billion, runs from Chantulo to Monkey Bay T-junction, locally known as Mtakataka Turn-Off.
Mhango said during the groundbreaking for the NBM-funded section yesterday that the financing arrangement for the road is a major relief.
He said: “We believe that by partnering with these banks and other financial institutions, we should be able to improve our road network in the next three years.
“The past administration neglected road rehabilitation and that is why, most of our roads are in poor state.”
NBM plc board chairperson Grant Kabango said financing transport infrastructure fits the bank’s strategy of supporting economic growth because the road serves tourism, agriculture, education and health sectors.
“We believe the road is key to economic growth because its destination is Mangochi, which is our major tourism spot and in supporting government in that area we are also contributing to the economic development of this country,” he said.
Kabango said raising funds locally also shields government from foreign exchange and exchange rate risks associated with external borrowing, adding that the repayment structure has been designed to allow government to service the facility sustainably.
Meanwhile, Roads Authority technical advisory committee chairperson Engineer Newton Kambala said Lot 2, constructed about two decades ago with European Union support, has not undergone major rehabilitation since 2008 because of inadequate funding, resulting in severe deterioration.
He said the poor state of the road has increased vehicle maintenance costs, prolonged travel times, raised transport costs and constrained access to markets, healthcare and other essential services.
Kambala, himself a civil engineer, said the 58.4km road is a vital link connecting communities to tourism and fishing areas around Mangochi, making its rehabilitation important for economic activity and implementation of the Malawi 2063 development agenda, which identifies infrastructure as a key enabler of growth.
Malawi Government has given the contractor, Mota-Engil 24 months to complete the works and warned that there will be no additional funding for delays, while people who have encroached on the road reserve will not be compensated.
The financing model follows similar private sector funded road projects, including the Parliament-Bingu National Stadium dual carriageway and Area 18 Traffic Interchange financed by NBS Bank plc as well as the six-lane Saulos Klaus Chilima Highway and Mzimba Street funded by Standard Bank plc and Old Mutual Malawi Limited, respectively.
