Chizuma pens Treasury on Khato deal ‘arranger’
The Anti-Corruption Bureau (ACB) has written Treasury on Quay Energy Corporation Private Limited—the Australian “arranger” of the Salima-Lilongwe Water Project loan.
ACB director general Martha Chizuma said this in a letter to Forum for National Development (FND), a civil society lobby group.
They asked the bureau to probe how the firm was identified to arrange a loan between Malawi Government and a syndicate of lenders to finance the water supply contract won by South Africa-based Khato Civils run by Simbi Phiri.
In her letter dated June 2 2022, which Chizuma yesterday confirmed to have written, she told FND that her office is waiting for a response from Treasury.
Reads her response in part: “The bureau is aware of your complaint. As an initial step, it was resorted to seek comments, relevant information and documentation from the Secretary to the Treasury. We are yet to receive the needful.
“We, however, believe the Secretary to Treasury will do the needful soon. We should be able to update then.”
Yesterday, Secretary to Treasury McDonald Mafuta Mwale did not pick the phone when we tried to seek responses on when he would furnish the bureau with the requested information.
But earlier—on the back of criticism over the firm’s recruitment process and its suitability for the task—the Ministry of Finance and Economic Affairs said government conducted thorough due diligence to ascertain the firm’s ability.
In a statement signed by the ministry’s public relations officer Taurai Samuel Banda in apparent reaction to social media concerns on how the firm was picked and its capacity, the ministry said despite being registered in 2021, Quay Energy Corp (Aus) Pty Ltd has the capacity to carry out the assignment.
He said: “Despite being established in 2021, there is no negative feedback on its directors and affiliates.
“Additionally, Quay Energy has indicated that it would be working with reputable international financial institutions in arranging this financing; hence, the financing shall be syndicated. Thus, Quay Energy is not the financier, but the arranger for the loan.”
The statement said the proposed loan amount is $313 447 757 (around K313 billion) at present exchange rates and has a calculated grant element (GE) of at least 40 percent, “which is above the required minimum GE of 35 percent for loan concessionality”.
In 2015, government initiated a project to source water from Lake Malawi to address water shortage in Lilongwe and surrounding areas.
