By Duncan Mlanjira
The European Investment Bank (EIB) has attached serious conditions in order to approve Malawi’s request made in May 2020 to increase financing of the construction of Lilongwe’s treatment works (TWIII) following corruption allegations involving Lilongwe Water Board (LWB) Chief Executive Officer, Godfrey Itaye.
The EIB has written Ministry of Finance that it has considered the request to increase the financing of the project — under Lilongwe Drought Resilience Programme — from Euro12.5 million to Euro15 million.
LWB CEO Godfrey Itaye
A letter of confirmation signed by Sub-Saharan Africa’s Head of Division Diederick Zamboanga and Senior Investment Officer Jim Hodges dated October 8, 2020 says EIB supports the view of the Malawi government that the project is important in order to meet the increase demand of potable water in the Capital City.
The EIB is financing the project to construct a new water treatment plant and its associated works with coordination the World Bank and the financing is waiting the approval of the executive management later this month.
LWB offices
However, EIB has reminded the Ministry of Finance of the irregularities at the Lilongwe Water Board (LWB) some three years ago that involved the procurement of prepaid water meters that led to an investigation by the Anti-Corruption Bureau (ACB) which was supported by the EIB’s Fraud and Investigations Division.
“This led to charges being brought against a number of individuals who we understand are now awaiting trial,” says the letter.
“One individual [Sinosi Maliano] is still currently employed by LWB as Head of Production and Distribution. As a requirement of our lending, please be aware that while he faces charges he would be required to have no involvement what so ever in this project to be financed by the EIB.”
EIB further says in a joint letter with the World Bank in March 2020, it had highlighted to the Ministry of Finance the two donors’ concerns of management changes at LWB and sought assurance of the government’s commitment to upholding the principles of good corporate governance in handling issues concerning water utility companies in the country.
“On 9th April, 2020 we received written assurances from the Ministry of Finance that the new Chief Executive Officer for the Lilongwe Water Board [Godfrey Itaye] would be competitively recruited and that the EIB and the World Bank would be updated once the recruitment process is complete.
“Unfortunately, we did not receive such an update and consequently it is difficult to determine if a competitive recruitment process was undertaken.
Finance Minister Felix Mlusu
“It was with much disappointment when we learnt of reports in the media that the newly appointed Chief Executive Officer of Lilongwe Water Board has been arrested and may be facing criminal charges.”
Itaye’s alleged fraud and corruption allegations were allegedly done whilst he was director general for Malawi Communications Regulatory Authority (MACRA) but he was transferred to become LWB CEO, where his arrest was executed.
This development, according to the EIB letter, is causing considerable concern since the EIB is in the process of obtaining approval from the its Executive Management for the financing of the TWIII, it had hoped to conclude the finance contract with the Ministry of Finance by the end of the year.
“However, the charges raised against the Chief Executive Officer of Lilongwe Water Board will negatively impact our ability to conclude the finance contract with the Ministry of Finance as we are unable to have persons under criminal charges involved in our projects, particularly given the relatively recent incident of irregularity as outlined above.
“Consequently, we seek an understanding of the status of the Chief Executive Officer, potential charges he may face and actions the Ministry is taking to remedy the situation.
“We look forward to receiving information in the very near future given the need to commence work on the water treatment plant,” says the letter.
Works being carried out by LWB
Two weeks ago, LWB took the media of a tour of a World Bank-sponsored Lilongwe Water and Sanitation Project (LWSP) where it pledged that it will soon be able to meet the high demand for water supply in the Capital City once the project is completed.
Lilongwe City has a population of over 1.2 million and the Board currently serves about 85% of that population because it uses old system.
Assistant public relations officer, Maurice Nkawihe had told the media that Government had secured financing from the World Bank/IDA for theLWSP — which is being implemented by LWB and Lilongwe City Council.
The five-year LWSP, which commenced on 26th March, 2018, is expected to be concluded by June 30, 2023 and is expected to benefit about 500,000 more residents in Lilongwe City and surrounding areas.
Specifically, the project scope includes extensive interventions in the water distribution network to help eliminate hydraulic bottlenecks and to improve network operation.
It is also expected to reduce water losses from the current level of 36% to 26%.
Works in progress
“This would in turn result in improved quality of services (hours of service and pressure) for about 250,000 people that currently receive intermittent services, without necessarily increasing the volume of water produced,” Mkawihe had told the media.
He added that the improvement of the distribution network will include the upgrading of 170km of existing distribution network and expansion of the distribution network by about 230km to areas of the city that are currently not being served by piped water.
Water transmission network will also be rehabilitated to include construction of 23km of transmission mains and associated upgrades to existing pumping stations and construction of additional storage reservoirs.
Mkawihe had said sanitation improvements will include rehabilitating and expanding the sewerage network that targets about 250,000 people from poor and vulnerable households.
The project scope consists of four components — water distribution network rehabilitation (expansion and non-revenue water reduction), sanitation improvements, technical assistance and institutional capacity strengthening.
Mkawihe said the project financing includes a US$75 million credit from World Bank/IDA, US$25 million grant from World Bank/IDA and US$2 million from the Malawi Government.
LWSP has a project implementation unit (PIU) located at LWB’s Madzi House (off Likuni Road), with designated officers to handle complaints or compliments that the public may give.
LWB is a statutory corporation established in 1947 and reconstituted by the Act of Parliament ‘Water Works Act’ No. 17 of 1995 as a utility service provider for City of Lilongwe and designated surrounding areas.
Its customers include domestic, institutional, industrial as well as commercial. It has about 89,000 metered customers (12,000 of them being prepaid) and more than 1,000 water kiosks (communal water selling points) within the City.
LWB has a water distribution network of circa 2,000km, 12 reservoirs water towers and 8 water pumping stations.
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It has two main treatment plants, TW I and TW II which are situated within the Water Works Campus, off Likuni Road in Area 3.
The combined capacity of the two plants is about 125,000 cubic meters per day, however, due to system bottlenecks, the Board just produces about 105,000 cubic meters of water per day.
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