Khato Civils Limited and Malawi Government are blaming each other over delays to start the Salima-Lilongwe Water Project, with the contractor accusing Ministry of Finance of lacking interest to sign the loan agreement.
But the ministry says Khato Civils is failing to fulfil technical requirements such as submitting intake designs for the $315 million (about K250 billion) project.
The finger-pointing emerged during a Parliamentary Committee on Natural Resources and Climate Change meeting in Lilongwe yesterday.
The project, designed to pump water from Lake Malawi in Salima to Lilongwe, was previously riddled by legal battles as Khato Civils pushed government to commit to the deal amid reports the Ministry of Finance was angling to cancel the contract.
The legal challenges were withdrawn after the Tonse Alliance took over government and committed to resume the project whose contract was signed over three years ago.
Addressing the meeting from Khato Civils base in Johannesburg, South Africa through video call, Khato chief executive officer Mungozi Munyani said his company was disappointed that the Ministry of Finance has not signed the loan guarantee agreement.
According to the contract terms, Khato is supposed to secure a financier for the project. Munyani said they have since secured three funders.
He said: “We submitted the designs two months ago after we renegotiated the contract [which led into the reduction of the deal from K400 billion]. The issue now remains with the Ministry of Finance. If they sign the guarantee letter then we shall start the implementation.”
But Ministry of Finance director of economic affairs McDonald Mafuta Mwale stated that they would not sanction the loan deal until all technical aspects have been resolved.
He said: “In fact, the minister [Felix Mlusu] has emphatically said there is no loan deal until the technical aspects have been resolved. Khato should submit the intake designs.
“These designs will help the technical committee to analyse the project and make recommendations on the way forward.”
Meanwhile, the Parliamentary Committee chairperson Werani Chilenga has asked Lilongwe Water Board, which primarily owns the project, and Khato Civils to ensure the designs are ready within a week.
He said: “We can’t continue to operate this way. This project must take off as soon as possible. So, we want a progress report to be submitted when Parliament starts meeting on December 7.”
Under the project, Khato Civils will construct a water intake in Lake Malawi with the capacity to pump 50 000 cubic metres per day, aimed at reducing water supply challenges in Lilongwe and surrounding areas.
The company is also expected to construct reservoirs in Lifuwu and Kanyenyeva in addition to a 111-kilometre pipeline to Kanengo, from where the drinking water will be distributed around Lilongwe and surrounding areas.