World Bank rebuffs Malawi over ‘Khato’ water project

...says project not feasible

The World Bank says the Salima-Lilongwe Water Project is not the most cost-effective way of increasing water supply in Lilongwe and the bank has also raised concerns over the feasibility of the project.

The bank has raised concerns over the the project which seeks to pump water from Lake Malawi in Salima to Lilongwe and was awarded to Khato Civils.

In a letter dated 22 September 2020 and addressed to Chauncy Simwaka, Malawi’s Secretary of Treasury, World Bank Country Manager for Malawi Eastern and Southern Africa Region Hugh Riddell reiterated the bank’s concerns over the project.

“We have learned through the Budget Statement 2020/2021 that the LWB is planning to restart the Salima-Lilongwe Project (SLP). The project was initially presented to the World Bank through a letter dated April2,2017. Following our initial review of the available project information, the project proposal was discussed during the Annual Meetings 2017 between the World Bank and the Malawi Delegation.

“A follow-up letter was sent by the World Bank on November 7,2017, sharing our concerns regarding the feasibility of the SLP. The Bank team remains available to support further technical reviews, through our global pool of experts, should you find it useful and if there have been any updates to the project details,” reads part of the letter.

Riddell noted that there also are plans to construct Diamphwe Dam which will supply water to the Central Region hence it is not feasible for Malawi to invest in both the SLP and the Diamphwe project as it would result in excess water and put extra burden on the financial systems of the Lilongwe Water Board (LWB) and the Treasury.

There is also risk of non-compliance with the legal covenants under the existing projects that require LWB total revenues to be equivalent to not less than the sum of its total operating expenses and debt service requirements.

The bank then advised government to choose one project for Lilongwe between the SLP and the Diamphwe project in order to allow preparation for the Diamphwe project to advance and avoid delivering inconsistent messages to the communities around the dam.

Advertisement