Khato Civils fed up

Khato Civils, a company awarded a K400 billion Lilongwe-Salima water project, says his firm is tired of government’s delays to sign a loan contract, casting doubt on the prospects that the project might be implemented any time soon.

Chairperson of Khato Holdings, Simbi Phiri also argues he is becoming suspicious of the manner in which government officials are behaving on the deal.

But Minister of Finance Goodall Gondwe said government has not yet signed the contract as they seek approval from the International Monetary Fund (IMF) and the World Bank.

In an exclusive telephone interview with Nation on Sunday, Phiri said a lot has been happening behind the scenes, including being invited by the donor community to explain on the deal.

Phiri claimed that during the meeting he had with some ambassadors in July last year at the British High Commissioner’s residence in Lilongwe, he explained to them how Khato Civils won the bid and other technicalities.

The Khato Holdings chairperson said he was becoming worried with some government officials, including Finance minister  Goodall Gondwe, who has not signed the K400 billion loan contract.

He said the reason that was being put forward earlier on the need of an Environmental Impact Assessment (EIA) was simply an excuse “because every professional in this field would know that you cannot come up with an EIA report before designs are made or the route [of the project] is identified”.

“Today the Finance minister would say IMF [International Monetary Fund] is yet to give a response, tomorrow he would talk of World Bank, I am really fed up. In fact, the [South African-based] financiers have also warned to pull out.

“If that is to happen, it means the Malawi government will have to look for other financiers to fund the project,” Phiri said.

But Gondwe said the IMF and World Bank agreed with the Malawi government, as part of loan cancellation deal, that before the Malawi government signs any loan contract, the two institutions must know.

“We notified them of our intention, but they have not given us a nod yet. We will only sign when we hear from them,” Gondwe said.

Phiri also alleged that top government officials brought to him officials of the Israel-based firm at his farm in Mchinji in the middle of a night soon after Khato Civils won the contract in 2016, but he turned them down.

“All this bickering— issues being raised that we don’t have capacity— emanates from these officials’ failure to convince me do something impossible. I am fed up and we cannot go on like this.

“And these are top people, doing things this way, and I have resisted from day one that I cannot accept any company to be imposed on me, unless I am saying I don’t have capacity,” Phiri said.

He said the international community representatives invited him to address them because of the same negative talk about Khato Civils, after they won the contract.

Phiri said he explained to them who Khato Civils are and how the contract was won.

He said he told them there was nothing technical to stop the project, but people having financial interest in it.

“Everyone knows we can do it. You can see that the fight for this project is not capacity. It is not whether we can do it, no. It’s about why you and not ours?

US Ambassador Virginia Palmer, in a response to a questionnaire, admitted that Phiri accepted their invitation and he met them in Lilongwe.

She said some of their concerns on the project was that there was no open tender and a Memorandum of Understanding (MoU) for the project was announced before the tender period closed.

“The British High Commissioner invited several Ambassadors to tea with Mr. Phiri when she learnt he would be in Lilongwe. I was pleased to have the opportunity to meet with him because he is a prominent Malawian and the project had been the subject of a great deal of [sometimes inconsistent] media coverage,” Palmer said.

She said the US understands the need for Lilongwe to have enough water.

“[But] the US is concerned that large investment projects put Malawi into debt distress and is interested to know if concessionary finance has been obtained for this investment,” she said.

EU Ambassador Marchel Gerrmann and the UK High Commissioner Holly Tett confirmed in responses to questionnaires that they were part of that meeting.

Simbi said if the delays continue, it may in the end affect the quoted K400 billion, and Malawi government would have to pay more.

Gondwe, however, said it would be unfortunate if the quoted amount increases.

The Salima-Lilongwe water project has been a subject of legal battles with the civil society taking the government to court for awarding the firm the contract before an environmental assessment was done, a matter which Khato Civils won.

Meanwhile, a draft environmental and social impact assessment report has ascertained the viability of the project, saying it can act as an urgent relief for water shortages that have been experienced in Lilongwe.

Phiri claimed detractors of the project have used everything to achieve their ill motives, including reporting Khato Civils to the Anti-Corruption Bureau (AC).

“There is absolutely nothing for ACB to investigate us. This complaint to ACB was deposited on May 7 2017, and ACB has not even contacted us about this, apparently they knew it had no basis.

“But after a draft EIA report came out recently and confirmed the project is viable, few days later, we hear about the ACB issue. Some people are working very hard to stop this projec,” Phiri said.

He said the good thing about it all was that courts, not only in Malawi, are independent, explaining that his companies have faced legal challenges in Botswana, South Africa, but have always come out victors.