EGENCO forensic audit to do with restoration process after Cyclone Ana-induced damages of Kapichira Dam

* As CEO Liabunya and company secretary Mluwira obtain injunction against being sent on forced leave

* In keeping with proper corporate governance practices, government sent the two on leave until completion of forensic exercise

By Duncan Mlanjira

At an extraordinary general meeting by government shareholders of national parastatal, Electricity Generation Company Limited (EGENCO) on July 23 in Lilongwe, it was resolved that a forensic audit be undertaken following the devastating damage due to Cyclones Ana and Gombe at Kapichira Hydro Power Station — “which led to massive disruption of electricity supply nationwide”.

This is contained in a letter from one of the shareholders, MacDonald Mafuta-Mwale — Secretary to the Treasury — sent to EGENCO Chief Executive Officer, William Liabunya ordering him to go on forced leave along with director of corporate services & company secretary, Videlia Mluwira.

Mafuta-Mwale told the two that the shareholders resolved to audit the company’s response to the disaster and its process to restore the 129.4 megawatts that was lost and brought in May back after several delays.

Dated October 3, the letter informed the two that the Auditor General had since identified the forensic auditor to commence their assignment from Tuesday, October 3 and “in keeping with proper corporate governance practices”, Liabunya and Mluwira be sent on leave “until such day that the forensic auditors have completed their assignment and communication of this fact has been made [to the two]”.

“Where you are required, you may be invited by the auditors in the course of the assignment,” said Mafuta-Mwale.

But the two would have none of it and sought legal relief with the Industrial Relations Court, which granted the an injunction on Friday, October 6 after EGENCO’s acting director of human resources management, Alexander Dzimba issued a general notice to staff members which said the company’s director of operations, Dr. Maxon Chitawo had been appointed as the responsible officer for the office of the chief executive with immediate effect.

The Industrial Relations Court order, signed by its deputy chairperson, stops EGENCO from effecting the decision and asks the two applicants to file for continuation within seven days.

Liabunya was hero in May following the restoration of Kachipira Hydro Power Station, whose 129.4MW it generates was lost due to devastation from the 2022 Cyclone Ana.

Restoration efforts were rolled out immediately that included redesigning a storm-resilient infrastructure as long term solution and constructing a primary cofferdam to re-divert Shire River water back to the intake to restore power generation.

Liabunya glowed with satisfaction when he briefed the media on a site visit as machines were rolling and was man of the moment nationwide as challenges of load shedding ended — but of late, they had been sporadic intermittent power supply without any explanation.

The Malawi Government borrowed US$60 million (about K61.8 billion) from the World Bank for the restoration project, of which

EGENCO was expected to spend about K46 billion to rehabilitate the plant and K16.8 billion to go to Electricity Supply Corporation of Malawi (ESCOM) to buy transformers damaged by the Tropical Storm Ana.

Meanwhile, while Cyclone Freddy in March was more powerful and damaged strong public and private infrastructure than Ana and Gombe combined, Kapichira restoration works were never affected.

Liabunya told journalists that they learnt a huge lesson from Cyclone Ana and once the meteorological experts warned of the impending Cyclone Freddy, they executed the plans they set to protect their infrastructure as well as their restoration process.

However, our reliable source indicates that Kapichira Dam and its other infrastructure had the capacity to survive the flooding from Cyclone Ana if all of its four gates were opened to ease the strong water flow.

Our source says two of the four gates were not functional — thus the water was being held back and flooding the dam to over capacity and finally the dam’s embarkment gave in after the fuse plug (an emergency spillway) was damaged.

“As soon as the water dissipated, EGENCO management swiftly repaired the nonfunctional gates before all processes of restoration of the dam were rolled out,” said our source.

“Warnings for Cyclone Freddy came when the reconstruction was in progress and near completion and as soon as the storm hit, EGENCO opened all gates — thus it had the capacity to handle and cushion any impact as the water flowed easily through all four gates.

“Cyclone Freddy was stronger that Ana and Gombe combined. Those four gates could have withstood the force of the water because, just as Meteorological Department alerted the nation on Freddy, so too they did for Ana and Gombe,” said our source.

The devastation of Kapichira Dam also affected construction of the nearby intake of the largest irrigation project in southern Africa being undertaken by the Malawi government with funding from the World Bank.

The intake infrastructure under construction and some that were completed were completely washed away and since both EGENCO and Shire Valley Transformation Programme (SVTP) are being funded by the World Bank, the two entities worked together to cut on time.

SVTP built a cofferdam to serve two purposes, which — on one hand — to allow EGENCO to partially fill the reservoir and resume generation of power and on the other, to allow SVTP to reconstruct the intake. EGENCO did repairs on the gates at the emergency spillway and the dam embankment.

When former Minister of Agriculture, Lobin Lowe assessed the damage of the intake soon after the disaster in February 2022, World Bank representative Joop Stoutjesdijk highlighted that to make massive project more resilient, there was need for SVTP to work with EGENCO in the restoration of Kapichira Dam.

The post of CEO leads EGENCO’s Executive Committee composed of five divisional directors and is responsible for strategic planning and ensuring the execution of the long term strategy, and representing management on the board. 

The post is also accountable for the company’s actions and ensures the security of its resources.

In May, when President Lazarus Chakwera presided over the opening of the 33rd Malawi International Trade Fair and inauguration of the Malawi Bureau of Standards (MBS) laboratory and office complex, he  accused EGENCO management of lack of urgency when handling the restoration of Kapichira, which took a year and three months to complete.

He said he gave EGENCO management a deadline of December 2022 to have it restored “in the hope that this would give them a sense of urgency to act with speed, but Christmas came and went and they failed to deliver”.

“When this happened, I expected that the EGENCO board that I personally appointed would take action against those managers at EGENCO who failed to deliver, but it has now been five months since that deadline was missed and I have heard of no consequences for anyone at EGENCO.”

Thus Chakwera gave the EGENCO board until the end of June to do its duty of addressing the issues that lie at the root of EGENCO’s dysfunctions, saying: “It is not acceptable for a Presidential deadline to be missed as a result of poor management and the board to still have no action taken after six months.

“So, when I talk about slowness to act, the disease is everywhere and we must all do our part to make sure we are not part of that problem,” he emphasized. And where we find the problem of slowness, it is almost always a leadership and management problem.”