Questions have been raised over a K5.2 billion payment the Lilongwe Water Board (LWB) made to Khato Civils for the Lake Malawi Project which is yet to commence.
Khato Civils which was awarded a US$400 million (about K300 billion) contract to tap water from Salima to Lilongwe.
According to documents Malawi24 has seen, LWB board in July, 2018 gave the company’s management approval to pay K7.5 billion and US$7 million (K5.2 billion) to Khato Civils.
“The board resolution is passed on the basis government guarantee that has been issued and signed for by the Minister of Finance, Economic Planning and Development and witnessed by the Attorney General dated 4th July, 2018,” reads part of the letter by the then LWB chairperson Edward Chitsonga.
On July 24, Water Board bosses told National Bank to transfer the US$7 million to the construction company.
The payment has raised eyebrows as people suspect that LWB was giving the company capital to undertake the water project.
“Can the Lilongwe Water Board please explain why on 24 July 2018 it paid $7 million (K5.2 billion) to Khato Civils? What was this money for, exactly? What has Khato done with it? How different is this from the situation in which the police borrowed money for Zameer Karim to use as capital?” wrote social commentator Onjezani Kenani on Facebook.
The Lake Malawi water project was under threat of being abandoned following disagreements between the government and Khato Civils but was resuscitated after the Tonse Alliance came into power.
Recently, the government and the construction company agreed to cut the cost of the project from US$400 million to US$315 million. It was also noted during a meeting between the two parties that Lilongwe Water Board had already pumped in US$17 million for the project.