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Treasury delays frustrate Khato Civils

Lilongwe-Salima Water Project

Werani Chilenga

Khato Civils has expressed worry over Treasury’s delays to sign a draft term sheet for the loan agreement that will facilitate implementation of the Lilongwe-Salima Water Project.

According to Lilongwe Water Board, which will benefit from the initiative, the current water supply in Lilongwe is 62 000 m3/ day, which, it indicates, is lower than the demand of 78,000m3/day.

According to the World Bank, the deficit is likely to worsen further because Lilongwe’s population has been growing at over 4 percent annually.

The area’s existing distribution network spans 142 kilometres.

Water resource experts fear that Lilongwe’s water demand will reach almost three times the current supply by 2035.

Meanwhile, The Daily Times has gathered that delays by Ministry of Finance officials are delaying progress in the Lilongwe-Salima Water Project, which has been billed as a panacea for water access challenges water users have been facing.

In a letter dated November 2 2021, and signed by its chief executive officer Mongezi Mnyani, Khato Civils bemoans that the delay in signing the term sheet is causing an embarrassment to the company and raising doubts about its credibility and seriousness to raise funds using the loan facility of the project.

Mnyani informs the Treasury and Natural Resources Committee of Parliament that they have done everything to secure the loan for the project but that Ministry of Finance officials’ actions were jeopardising their efforts, resulting in a case where financiers were threatening to pull out.

“Their [financiers’] lawyers are currently on standby to draft the detailed loan facility agreement but in the absence of the signed term sheet they are unable to continue and, unfortunately, they have very limited time to finalise this document as they would be closing their offices for the December break.

“We must make it very clear that this is our last attempt to get the funds for the project and failure to sign the term sheet will fall on your square and therefore the ministry will be responsible for securing a loan for this project,” the letter reads.

Natural Resources Committee of Parliament Chairperson Werani Chilenga said the delays were baffling Parliament, which gave the Treasury the go-ahead to work with Khato Civils.

“We don’t know what is causing these delays but the Treasury can do better on the issue. The Lilongwe-Salima Water Project will benefit many people, bearing in mind the extent of deforestation at Dzalanyama, which is our source of water now,” Chilenga said.

Treasury spokesperson Williams Banda said they were fully committed to the realisation of the project.

He said they were working tirelessly to support the commencement of the project.

“Treasury is ensuring that all the required processes and procedures are being duly complied with, including the due diligence of the financiers,” Banda said.

Khato Civils reduced the amount of money meant to cater for the project from $400 million [approximately K330 billion]) to $298 million [about K245 billion].

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