…Pushes for project suspension…
LILONGWE-(MaraviPost)-The country’s civil rights group Centre for Democracy and Economic Development Initiative (CDEDI) has accused Khato Civils for allegedly externalisation much needed forex in Salima-Lilongwe Water Project.
CDEDI therefore has written Minister of Finance to suspend the project for forensic audit.
Addressing the news conference on Monday, October 13, 2025, CDEDI alleges that there is forex externalisation and money-laundering at Salima-Lilongwe-Water Supply project.
“There are traits of money-laundering and forex externalisation owing to the huge salary disparity
between locals and expatriates. Expatriates fly out for a holiday once every six weeks.
“Importation of products such as safety boots, vests, reflectors, aluminium windows, cement and even bricks amid acute forex shortage in the country”, exposes CDEDI Executive Director Sylvester Namiwa.
Namiwa therefore challenged Khato Civils to dispute the claims in the public arguing that CDEDI has “enough evidence on the allegations”..
Here is CDEDI full statement on calls for suspension of Salima-Lilongwe Water Supply project…
SUSPEND OPERATIONS AT SALIMA-LILONGWE WATER SUPPLY COMPANY, AND AUDIT THEM
At his inauguration on October 4, 2025 as 7th President of Malawi, Professor Arthur Peter Mutharika, APM as he is fondly called, declared that “Malawians
voted out corruption, blatant theft, heartless looting, State terrorism and wanton destruction”.
It is our considered view at the Centre for Democracy and EconomicDevelopment Initiative (CDEDI) that the aforementioned quote best describes the pitiful regime of the Malawi Congress Party under former president Dr. Lazarus Chakwera.
To validate President Mutharika’s assessment of the MCP regime, CDEDI hereby implores the newly-appointed Minister of Finance and Economic Affairs
Hon. Joseph Mwanamvekha to immediately suspend operations at SalimaLilongwe Water Supply Company, pending a forensic audit.
The audit should focus on due diligence in the main contract, subcontracting, financial prudence and management, labour and compliance to prevailing laws
and regulations governing the construction industry.
Thus far, CDEDI would like to categorically state that it is in full support of the project that was hatched during APM’s first-term of office to, among others, address water shortage in Lilongwe, Salima and Dowa districts.
But it is important to highlight that the MCP regime adopted the project implemented through what is known as the Special Purpose Vehicle (SPV) leading to the formation of the Salima-Lilongwe Water Company (SLWC) to extract water from Lake Malawi in Salima and sell it to Lilongwe and Central Region water boards.
Initially, the contractor, Khato Civils was responsible for securing funding where the Malawi Government would be a guarantor. After a number of twists and turns, the MCP regime decided to burden Malawians even further, as financiers of the project through government sovereign guarantee loans.
In august 2024, the former Minister of Finance and Economic Affairs Minister Hon Simplex Chithyola-Banda moved a motion which led to Parliament nodding to SPV to borrow K150 billion from NBS Bank, National Bank of Malawi and CDH Investment Bank.
In the spirit of transparency and accountability, Malawians may wish to recall that the Chief Secretary to Government and the Secretary to the Treasury are
the SPV shareholders.
Bringing this K150 billion bill in Parliament simply means that if SLWC, as the borrower, fails to pay, Malawians will be burdened to foot the bill through their hard-earned taxes.
At this juncture, Malawians may wish to know that Khato Civils presents its funding requisition to SPV which in turn borrows from commercial banks.
Given the above financing mechanism, any serious administration ought to put in place stringent measures to enhance prudence, transparency and
accountability in the implementation of the project to ensure public trust and confidence.
It is against this background that CDEDI has written Hon Mwanamvekha to immediately suspend operations at the Salima-Lilongwe Water Supply project, pending an audit.
It is only through this process that Malawians will exercise their right to know the status of the project and how much has been pumped into it through loans
so far!
The implementation of the project has been marred with serious allegations
that include the following;Lack of transparency and accountability: Malawians don’t know if funds
disbursed so far match with the works on the ground in the two-year project expected to be completed by September 2026.
Alleged lack of due diligence in subcontracting: Outsourcing of products and services that can be easily and cheaply sourced locally—accommodation,
labour, plant and vehicle hire, procurement of quarry stone.
Alleged Forex externalisation and money-laundering; There are traits of money-laundering and forex externalisation owing to the huge salary disparity
between locals and expatriates. Expatriates fly out for a holiday once every six weeks. Importation of products such as safety boots, vests, reflectors,
aluminium windows, cement and even bricks amid acute forex shortage in the country.
Abuse of the immigration law; Importation of skills that are locally available such as guards, health and safety, electricians, fuel attendants and plant operators. In so doing, they have failed to recruit interns to ensure skills
transfer amid high unemployment among the youth.
Total disregard for occupational health and workplace safety: Between April and September 2025, seven productive citizens, including a teacher, have died
due to accidents involving the contractor.
Violation of labour laws and discrimination: Locals are treated with contempt, working long hours and during odd hours at no pay. Local guards getting K600,000 gross salary while foreigners are getting ZAR 20,000 (about K4 million) per month. Foreigners enjoy medical insurance while the locals don’t.
Locals are accorded 18 days annual leave while foreigners go on leave for 30 days. The company’s employees are not on pension, which contravenes the
country’s Pension Act.
Lack of compliance with construction industry regulations; There is only one local engineer at Mvera site while Lifu, Katengedza and Dowa/Chezi sites are
managed by foreigners.
As a nation riddled with unsustainable public debts, coupled with acute forex shortage and unemployment crisis, we cannot afford to bury our heads in the
sand from such serious allegations, at least not now when we have a new government that has promised change.
It is, therefore, CDEDI’s expectation
that authorities will act on our demand as a matter of urgency.
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