Blantyre Water Board (BWB) is under pressure to exhaust by October 31 this year K4.7 billion (10 million euro) project assistance from two financiers or risk government inheriting the projects, thereby pushing the burden on taxpayers.
The World Bank’s International Development Association (IDA) and the European Investment Bank (EIB) under European Union (EU) have set the deadlines, according to correspondence we have seen.
In November 2009, BWB undertook several projects with financial assistance from IDA and EIB to increase water production from 78 million cubic litres to 96 million cubic litres per day.
In the meantime, the board has two major outstanding projects worth K4.7 billion and the World Bank raised concerns over their completion.
The two outstanding project stations that were behind schedule are a K1.9 billion (four million euro) World Bank funding for the rehabilitation and renewal of works at Walker’s Ferry Intake and the K2.8 billion (six million) euro High Lift Pumping at Chileka substation.
In an Aide Memoire seen by The Nation, the World Bank team that inspected the projects in April 2015 noted with concern the delays in some of the works and observed that the hold-ups in implementing the EIB-funded projects might have an impact on the completion of the World Bank-financed investments.
Reads in part the World Bank’s Aide Memoire: “The project closing date is October 31 2015 and only those works, goods or services delivered on or before that date will be eligible for financing from the credits or grants.
“All invoices will have to be dated not later than October 31 2015 in respect of such works, goods or services. There is a four months grace period during which outstanding payments as at October 31 2015 may be settled.”
The memo asked BWB to resolve issues hampering completion of EIB-funded works at Walker’s Ferry and share the outcome with the World Bank by May 15 2015.
The bank also asked BWB to resolve the issues affecting installation of equipment at Chileka Pumping Station, including position on renewal of contract to expire in May 2015.
The bank has since urged government to pay particular attention to the issues over the remaining six months of the project.
The mission also noted that under the project, only rehabilitation of Mudi Pumping Station is complete.
“The bank team concluded that the likelihood of achieving the development objective is low as only 59 percent of the main results indicator [i.e. access to safe water] has been achieved.
“During the last full implementation support mission in August 2014, this indicator was at 49 percent. The mission is of the view that if the low levels of beneficiaries persist, the project will need to be downgraded in the full supervision mission scheduled for April 2015.
“The rehabilitation of the twin pipelines from Walker’s Ferry to Chileka was taken out from the project due to cost constraints arising from failure of Gammon-Technofab Joint Venture in completing the project, and whose contract price was relatively very low,” reads the report.
The report indicated that the delay was the result of a contractor that BWB hired failing to install the pumps at Walker’s Ferry and, consequently, the deal collapsed in January 2013.
At one time, a source close to the project implementation toldThe Nation, the contractor informed the board that the ship that carried the pumps got sunk in high seas on its way to sea ports en route to Malawi. In January 2013, EU authorised BWB to engage another contractor to execute the job within 12 months. The 12 months expired in December 2014.
Says the report: “BWB had, therefore, revised the bid documents to reflect the remaining works. Four contractors were served with the bid documents and the contract to complete the works was awarded to [another company] at a contract price of 4 077 094.23 euro.
“It was the Board’s wish to have all major mechanical and electrical installations carried out by April 2014. However, no installations had been made by the end of this reporting period. The overall progress of the works is 55 percent. The contractor has planned to fully commission the pumps by May 2015,”
Other major highlights on low absorption of funds are mentioned in National Water Development Programme (NWDP) progress report of March 2015 which included construction of three reinforced concrete reservoirs budgeted at K3.9 billion [$9.3 million], but only K301 million [$700 000] had been used.
The report also indicated that capacity increase and rehabilitation of Walker’s Ferry Treatment Plant was budgeted at $3 119 183.21 and is expected to use only $600 000 by the end of June 2015.
But the report commended BWB for doing well on rehabilitation of Mudi Pumping Station and Accessories, which was budgeted at $1 959 657.16 and the expenditure to date is $1 317 479.62; capacity increase and rehabilitation of Walker’s Ferry Treatment Plant at $3 119 183.21, to date $2 684 908.53; construction of three reinforced concrete reservoirs at $9 387 412.90, up to date $8 465 545.16; rehabilitation and renewal works of Chileka Pumping Station at $7 857 861.18, up to date $6 627 044.14
Senior officials in the Ministry of Finance said BWB’s failure to exhaust the financial support from the two institutions means that at the end of the project, all the running contracts that were supposed to be paid by the two institutions will be taken over by government.
“This means the remaining contracts will be paid by the taxpayer. This will bloat the arrears that government has with contractors because these extra payments have no budget line in the national budget,” said the officer.
The senior official observed that BWB ended up in that situation because it lacks capacity on project management.
EU head of press, political and information James Dolan said currently the water board and EIB/EU are looking at ways to complete the project within the shortest possible time frame.
He said: “We are confident that the works can be completed within the remaining time frame of the project. Both financiers of the project, the European Union and the European Investment Bank, are working in partnership with the Blantyre Water Board. It is, therefore, in our common interest to ensure that the works are completed to the specifications of the contract in order to benefit Blantyre’s population.
“Most of the equipment has been installed and partially commissioned and BWB and the contractor are working hard to ensure a speedy completion. In our estimation, over 90 percent of the project work-plan is now completed.
“However, we acknowledge that the project impact will only be fully felt by Blantyre’s population once the entire project is completed.”
BWB project manager Booker Waya said the board was optimistic that the projects will be concluded on time.
“The contractors have assured us that they are going to meet the deadline and we believe we are going to complete the projects in time,” he said.
President Peter Mutharika told the National Assembly in the State of the Nation Address during the opening of the budget meeting that during the 2014/15 financial year, government completed rehabilitation of Mudi Pumping Station and Walker’s Ferry Treatment Plant as well as the construction of three reservoirs, each with a capacity of 5 000 cubic metres together with their booster stations, pumping and supply pipelines in Blantyre.
The new reservoirs will assist in increasing water supply hours for areas such as Chilobwe, Chimwankhunda, Chigumula, Bvumbwe, Chileka and Kameza which used to receive water supply for few hours in a day. It is expected that the whole supply area will experience a drastic improvement in terms of water supply.