100km water pipeline Khato Civils is building for Gaborone excites Tswanas

By Duncan Mlanjira

The 100km water pipeline, which is being built by South Africa-based Khato Civils (Pty) Limited — owned by Malawian Simbi Phiri, has been described as key to unlocking the much needed water flow not only to Botswana’s Capital City Gaborone but to all villages and towns in the five constituencies that it will cut through.

This was supposed to be the same for the aborted Salima/Lilongwe Lake Malawi Water Supply Project pipeline that Khato Civils was supposed to build but was controversially stopped.

According to Mmegi Online, coming into swing of the Masama Mmamashia project is largely seen as Botswana President Mokgweetsi Masisi’s fulfilment of his water promise to the rest of that country’s southern region, which is traditionally water stressed.

The report says during the 2019 elections campaign, Masisi promised at every political rally that he will ensure that the 100km project from Masama Mmamashia cutting through Lobatse, Moshupa/Manyana, Goodhope/Mabule, Ramotswa, and Mmathethe/Molapowabojang constituencies, was rejected by Parliament last August, is resubmitted without controversy and hurdles.

Mmegi reports that in the national budget presentation to Parliament a fortnight ago, Land, Sanitation and Water Minister, Kefentse Mzwinila highlighted that the beneficiation of Lobatse water master plan is dependent on the completion and delivery of water into the Greater Gaborone.

The pipeline project was put to tender in 2016 by that country’s Water Utilities Corporation, but conflicting interests held it back.

And when it was finally awarded and recognised as an immediate solution to drought situation besieging the southern region last August, corporate interests played themselves out this in Parliament, to frustrate the winning bidder.

However, almost a year later, the project has since been included in the National Development Plan Mid-term review and adequately budgeted for in the National Development Plan for the new 2020 financial year.

That paved the way for the Water Utilities Corporation to continue where they left off with the winning bidder, Khato Civils, who had beaten the rest of the bidders by being over 200 million Botswana pula cheaper.

Mmegi reports that besides the delays of almost a year, the contractor, Khato Civils also had to suffer the inconvenience of having its P100 million held in a Water Utilities bank account and out of reach during all this time, after they were obligated to pay the huge sum into government coffers as part of accepting the offer for the Masama-Mmamashia pipeline project.

“However, being the large scale contractor that they were, Khato Civils had since been busy with other large scale projects in South Africa, including a power station upgrade in Cape Town, double decker bridge repair project on M1 road in Johannesburg, housing and sanitation projects in Polokwane and Hammanskraal, amongst others,” says the Mmegi Online report.

Khato Civils was awarded the contract for the K400 billion Lake Malawi Water Supply Project, designed to pump and deliver 50 million litres of potable water from Salima to Lilongwe City and also for all communities along the pipeline.

In an interview with Zodiak Broadcasting Station recently, Simbi Phiri — Khato Civils executive chairperson — reiterated that the company was ready to resume with construction activities anytime.

According to reports, the project was stalled due to misunderstandings over interest rates that was deemed too high by the Malawi government.

A statement from Khato Civils last year, CEO Mongezi Mnyani had said its contract stipulates that they must source funding for the project but does not place any restrictions in terms of where and how the loan has to be obtained. 

“In this regard, most of the funders approached are from the open market and provide such loans with interest varying from 4-6 percent,” the statement read in part.

Khato states in the statement that Malawi government wanted to pay an interest of less than 2% per annum over a period of 20 years to the financier and part of the loan to be debt free (concessionary loan).

But the contractor said there was no clause in the agreement where its is required to only source funding that will have a loan portion classified as concessionary. 

“It is important to note that such types of loans can only be provided to government via financial institutions such as the World Bank and IMF and only government can enter into such negotiations.

“Our legal obligation is to source the loan from the open market and all what is required now is for government to agree on repayment terms,” the contractor had said in the statement.

Khato states that its meeting with representatives of Malawi Government and prospective funders took place from April 29 to May 2, 2019 and in principle agreements were finalised pending a meeting with former Minister of Finance, Goodall Gondwe.

“Unfortunately due to national elections that took place on May 21, 2019, we had to wait for the new administration to be in place in order to bring financiers to finalize details of the loan. 

“At this juncture there is no impediment on our side and government and financiers must meet and discuss the loan agreements,” the statement had said.

Simbi himself in the interview with Zodiak said up to US$71.2 million of Khato Civils money had been spent on the required processes precedent to commencing the project and that since its appointment for the project they have worked tirelessly to ensure that they meet all conditions.

He had said the company completed all the designs of the pipeline meter by meter from Salima to Kanengo and the construction drawings and plans were accepted and approved by Lilongwe Water Board.

Simbi said the contract is still valid both legal and financial obligations and that if cancelled shall attract “full payment of all expenses incurred to date.”

Meanwhile, Simbi Phiri has denied reports that he had been arrested for fraud in South Africa as was reported by some Malawians on social media.

CEO Mnyasi said in a statement that the reports of Simbi’s arrests are “totally untrue and malicious intended to bring into disrepute the good character of Simbi and his firm”.

“We are convinced that the fabrications are emanating from unprofessional conduct by some rogue elements within Malawi who are hell bent on turnishing our good image and reputation of Mr. Simbi Phiri,” said Mnyasi.

Enquiries and searches done on the Internet by Maravi Express did not yield confirmation of the arrest, which could have made news in South Africa since Simbi’s Khato Civils is a very popular corporate company that is doing very huge projects in the Rainbow Nation.