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Khato Civils P6 Billion Lake Malawi Project Goes Ahead

Khato Civils Chairman Simbi Phiri
Hot on the heels of their recent famous victory in Botswana courts that released all Khato Civils frozen millions of Pula and cleared the company's executive chairman Simbi Phiri of any money laundering fears, the Malawi Supreme Court of Appeal on Friday cleared Khato Civils from allegations that it was flouting environmental impact assessment procedures in their implimentation of the multi billion Lake Malawi water project.

Contrary to widely publicised narrations that Khato Civils and Malawi Water Board were flouting Environmental Impact Assessment(EIA) procedures in the implementation of the  US $500 million 120km Lake Malawi  water project  the supreme court of Appeal in Malawi on Friday  dismissed such fears and allegations as hogwash and said it was clear from the contract between the developer and the contractor that the EIA had been included and that the fears of the Law Society or whosoever interest it represent was misplaced.

 Malawi’s highest court,  the Supreme Court of Appeal on Friday cleared the path for Khato Civils to go ahead full throttle with its P6 billion  Lake Malawi water project which had been going at a snail’s pace due to a High Court battle launched by the Law Society of Malawi that challenged the execution of the project on account of  the lack of Environmental impact assessment.

Justice Lovemore Chikopa killed the Law Society’s case against  the Water Board and Khato Civils when he ruled that all High Court proceedings and rulings on the case were a futility after it was found that the Law Society, after being granted leave for stay of execution had failed to lodge the motion on stipulated time.

The ruling means  Khato Civils and the Water Board can now proceed with their project  as if  no  court order had been granted against  them.

Despite  ruling in favour  of Khato Civils and the Malawi Water Board in nullifying all the High Court proceedings, the Appeals Court went  on to  consider all the merits of the case and stated  that  for the sake of justice  they would not have  shied away  from  making a favourable ruling in favour of the Law Society had their merits held any water despite the ruling to nullify all the  proceedings.

However the Supreme Court found  that even in their merits, the  Law society’s arguments  for the halting of the water project  did  not make any sense and that the matter should not have been brought before  the courts in the first place.

Making a side remark in its ruling  the highest  court in Malawi  found that  the  law society’s  litigation, which had affected the smooth execution of the project  since May  this year, was premised on a very poor understanding of what the project entailed and therefore a waste of time.

Justice Chikopa observed that contrary to the  Malawi Law Society’s shallow understanding of the project,  it was obvious   that an EIA was not necessary or a pre requisite for the first two components of the contract, namely the   engineering and procurement as there would be nowhere to do it(the EIA) seeing as the pipeline route would not be known until, at the very least, after completion of the engineering component. The  judge wondered  why the litigants wanted  to stop even the engineering and procurement components of the  project  that did  not need an EIA to be carried out.

The judge was also quick to point out that it was clear in the contract  that  once  the contractor and the developer of the project  were done with the engineering and procurement components, the EIA would be implemented ahead of the commencement of the  construction component. He said that was clear  and not in dispute or doubt.

In fact  the Court of Appeal ruled that  there should  never have been any  fears or doubts in the minds of the  litigants(the Law Society) as to whether  the EIA would be  flouted as  both the developer and the contractor had been clear in their contract and intents  that  an EIA would be undertaken before construction works commenced.

The judge  further said to demonstrate  that there was no controversy at all the Water Board as the  developer even went to the extent of advertising for and identifying an EIA Consultant for the project.

“Can it be said in those circumstances that there was a dispute between the Parties as to whether an EIA would be conducted? That the first Respondent by itself or through the Interested Party were intent on implementing the Project without first doing an EIA? We doubt whether the answers would be in the positive”, said justice Chikopa in part.

The  Appeals Court  also went further  and told  the Law Society  that  its litigation was based on a wrong understanding of the  multibillion  water project. According to the  Appeals Court,  while  the Law Society understood  the project as  entailing ‘abstracting water from Lake Malawi in Salima, purification of the water and pumping it over a distance of 120kms to Lilongwe’, the  project was much more than  that. The Appeals Court  said the Salima-Lilongwe water project is what  is called an ‘Engineering, Procurement and Construction contract’.

According to the papers before the Court of Appeal the contract is in three components, the  first  of which was the Engineering component, where Khato Civils  was among others supposed to do a feasibility study of the whole Project to determine among others its viability, the exact location on Lake Malawi where water would be tapped from, to determine the route which the pipes ferrying the water from Lake Malawi to Lilongwe would take, as well as  a costing of the Project.

The second component, the  court of Appeal said, was contingent upon the Malawi Water Authority sanctioning the engineering component and  would involve the procurement of finance and equipment by the contractor, Khato Civils. The third component was the construction works which would only begin after the first two components had been successfully executed, the judge explained.

“Even on a cursory perusal of the Contract it is obvious that an EIA was not necessary for the first two components of the contract. There would be nowhere to do it seeing as the pipeline route would not be known until, at the very least, after completion of the engineering component. It is on the other hand a fact that an EIA would be necessary before the construction component of the contract commenced”.

Trouble started in May  this year  when Khato Civils brought into Malawi  their state of the  art  trenching  equipment worth  about P50 million.  It is  these equipment  that the Law Society referred to as evidence that the Malawi Water Board and Khato Civils had already started implementing the Contract without doing an EIA.

“The Society was perhaps reading too much into the above. To begin with a proper reading of the Contract and the briefing Notes shows that Khato Civils  had to prove capacity including possession of requisite equipment.

Possession out of Malawi would not make too much sense. There should therefore be nothing wrong with Khato Civils  bringing trenchers into Malawi. It is not evidence that they have started trenching. Or will soon start. Only perhaps that they would be ready to do so when necessary. And we do not think that they should be punished for flaunting their capacity to execute the contract. In fact they ought to be lauded”, judge Chikopa further said in his ruling.

Khato civils is a multi billion rand grade 9 civil works and engineering  firm headquartered  in Midrand, Johannesburg owned by Simbi Phiri, a naturalised South African born of Tonota, Botswana, mother and Malawian father.

In Botswana Khato Civils are eyeing another multi billion water project,  the North South water carrier 2.2. They are also setting up a half a billion pula investment in Gaborone, being the regional headquarters for their heavy plant equipment partner, Tesmic, of Italy. The local entity Khato civils Botswana  has already submitted drawings to the Gaborone City Council to pave the way for the project expected to directly hire over 1500 locals on a permanent basis.




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