Blantyre Water Board (BWB) is undergoing an audit by the inspectorate general of the European Investment Bank (EIB) on the controversial Malawi Peri Urban Water Project funded by the bank to the tune of K10 billion ($18,181,818).
The audit comes after EIB officials earlier took to task BWB to explain its lack of transparency in terminating contracts without consulting the financier and the board’s failure to address issues of illegal procurement raised by a report from the Office of the Director of Public Procurement (ODPP).
In an e-mail response to a questionnaire yesterday, Cécile Leemans from the European Union (EU) Delegation’s Malawi Social Sectors and Infrastructure Section confirmed the audit.
She said: “The Proactive Integrity Review [PIR] is a detailed audit and is one of the standard control mechanisms used by the EIB’s Inspectorate General to ensure and control that its projects have been executed effectively and fairly and in accordance with the terms of the finance contract.
“A PIR usually leads to important lessons learned both for the borrower and the bank, which can be used in the execution of future projects. The selection of projects for a PIR is done through an extensive risk assessment process which takes into account various criteria. In the last few years, EIB has carried out PIRs on over 25 various loans.
“The PIR is executed in cooperation with the Office of the Director of Public Procurement, which will, together with the Ministry of Finance and the Blantyre Water Board, be informed on the results.”
However, Leemans could not say what will follow if the audit reveals mismanagement of funds by BWB, saying: “The next steps and possible consequences depend on the results of the PIR which at this moment is still ongoing.”
In an interview yesterday, BWB acting chief executive Henry Bakuwa also confirmed the audit, but said it is normal standard procedure on any project which is nearing its completion.
He said issues raised in the past had been sorted out.
Said Bakuwa: “I am sure that you are aware that the project was [for] five years and it is nearing completion. This is not an investigation, but basically an audit to look into how the project has progressed, the challenges and the lessons learnt.”
According to Bakuwa, regarding the issue of termination of contract, EU officials and BWB officials agreed when they met in August to reinstate the contractor to finalise works at the board’s Walker’s Ferry intake.
He said on issues of illegal procurement, a report will be issued.
In December 2014, EIB and the EU Delegation threatened to pull out funding in the Malawi Peri-Urban Water and Sanitation Project following allegations of mismanagement of funds through illegal procurement.