The Malawi Supreme Court of Appeal (SCA) on Monday granted government an order of stay on an injunction earlier obtained in the High Court by Forum for National Development (FND) stopping commercial banks from loaning government K105 billion on behalf of Khato Civils to carry out the controversial Salima-Lilongwe Water Project.
SCA Judge Dingiswayo Madise has ordered the applicant to file a fresh application within seven days and that hearing of the summons will be done within 21 days.
The order means that National Bank of Malawi and NBS Bank are now at liberty to finance the water project as was approved by the last sitting of Parliament.
In the case, FND national coordinator Fryson Chodzi is arguing that Khato Civils was supposed to identify a financier and not involve the Malawi Government to borrow on its behalf.
He is on record to have argued that Khato Civils identified a financier, Quay Energy Corp, to the tune of K25 billion, but no explanation was given on what happened to the financier.
On the other hand, Khato Civils, through lawyer Chancy Gondwe, are arguing that the Government of Malawi through the National Assembly passed the NBS Bank plc and National Bank of Malawi plc (Lake Malawi Water Supply Project) Loan Authorisation Bill, 2023.
They contend the Bill was passed into law on April 6 2023, effectively authorising the government to borrow from the two banks to finance the abstraction and treatment of water from Lake Malawi at Lifuwu in Salima and transportation of the treated water to Lilongwe City.
The Salima-Lilongwe Water Project was initiated in 2015 and was supposed to be completed in 2018/19, but it has faced a number of challenges, including funding.
