Khato Civils which was awarded a US$400 million (about K300 billion) contract to tap water from Salima to Lilongwe has reduced the cost of the project by $102 million (about K73 billion), but a commentator has wondered how the initial figure was arrived at.
The Salima-Lilongwe water project was under threat of being abandoned following disagreements between the government and Khato Civils.
On Thursday, the two sides held a virtual meeting where government was represented by Ministry of Finance, Department of Environmental Affairs and the Lilongwe Water Board.
Chairperson of the Parliamentary Committee on Natural Resources, Welani Chilenga, told the local media after the meeting that Khato Civils has cut the cost of the project from US$400 million dollars to US$315 million.
“Lilongwe Water Board had already pumped in US17 million and that has also been subtracted, bringing the total cost to US298 million (about K227 billion),” said Chilenga.
He added that the Tonse Alliance administration has since aborted plans to terminate the award.
“We are also happy that Khato Civils have also shown commitment to continue the project with the new government,” Chilenga said.
Commenting on the issue, social commentator Onjezani Kenani said the reduction in the cost shows that Malawians would have been robbed.
He noted that Khato was awarded the contract without a competitive bidding process hence it is difficult to say if the new cost is also fair.
Kenani said: “The $400 million was literally just dreamt up. As usual, there was no shortage of handclappers who are ready to defend any nonsense. And in the absence of competitive bidding, we cannot know with absolute certainty whether the $298 million is a fair price. Khato bid against no one. The Lilongwe Water Board conveniently disqualified the only two other bidders for reasons that are entirely unclear. This whole thing just has to be scrapped and the bidding redone.”