Desperate Chinese company ZTE accused of blackmailing NITA-U in a bid to win a contract

By our reporter

There is an ongoing push to put pressure on government agency, NITA-U, to give Chinese company telecommunications company, ZTE a bid to complete the final phase of the National Backbone infrastructure (NBI).

It has been established that ZTE, through its agents, are using underhand methods to disadvantage the rest of companies bidding for the final phase of the NBI which seeks to connect government departments with high speed interconnectivity.

ZTE has in the past couple of weeks been blackmailing NITA U and the Ministry of Information and Communication (ICT) as colluding with the companies that built and maintain the national internet backbone to fleece Ugandans, which the aim of disrupting the contracting process which is half.

The Chinese companies had been pushing for negative reports in the press, and to government leaders including the President saying NITA-U officials signed with an unfavourable internet provision contract with Soliton Telmec, a Kenyan company which was a bad deal for the country.

In so doing, they are positioning themselves as the company which might offer the country a better deal, in the final phase of the NBI project.

Through a female youthful minister, ZTE wants the government entity NITA-U to be denied its mandate and be offered to a telecom company which they can easily manipulate.

The president recently said that as part of plans to revamp UTL, he wanted the government to start purchasing data service from the struggling telecom.

The president was told that for every Mbps of Internet delivered to any government agency through a cable owned by government through NITA-U, the Kenyan company Soliton charges NITA-U $200 (Shs725, 400) as transport charges.

But Nita-U strongly dismisses these allegations saying whoever makes such blatantly lies was unhappy about the recent contracts handed to other firms, but theirs.

The ongoing bidding process, pits ZTE against Klawanchi Telecomm Camusat, BCS &Fiber Home, Raubex and Huawei. Since the bid have crossed the opening phase, ZTE suspects fellow Chinese firm Huawei might win the bid depending on what was involved in their respective documents. ZTE understands Huawei has the best bid, despite the fact they quoted the highest amount. Now, ZTE has started a campaign to mudsling Huawei, to make them look bad before the public.

Sources which spoke to online newspaper Chimp Reports this week said, “The detractors have been recycling old lies to discredit Nita-U”. The official candidly added, “We are dealing with a fog created by unending Chinese companies’ business wars in Africa.”

The bidding process so far has gone as follows;

  • Develop Standard Bidding Document; Submit for review and no objection from the World Bank – Completed
  • Conduct Environment & Social Impact Assessment for the project; Submit report to NEMA for approval- Completed
  • Put out a general procurement notice (International Competitive Bidding (ICB)) – Completed. Print adverts run on 14th August 2017 in the East African newspaper and on 17th August 2017 in the New Vision newspaper
  • Organize for pre-bid conference/meeting with all interested suppliers, capture and address all queries/issues raised- Completed
  • Submit all amendments to the document (based on the pre-bid issues) for review and no objection from the World Bank – Completed
  • Confirm and communicate the bid submission date to receive bids- Completed
  • Receive and open bids- Completed
  • Undertake the Technical Evaluation – Ongoing
  • Submit Report of Evaluation Report to the Contracts Committee – Scheduled
  • Submit Approved Report to the World Bank for Review and Approval – If any queries these are addressed and resubmitted until a NO OBJECTION is received Scheduled – Scheduled
  • Undertake Post Evaluation Review on Likely Best Evaluated Bidder – Scheduled
  • Submit Report now updated with the Post Evaluation to WB for Approval – Scheduled
  • Submit Approved Report to Contracts Committee – Scheduled
  • Display Best Evaluated Bidder Notice publically – Scheduled

The Authority says that during the pre-bid stage, all suppliers were invited to view the bid specification and it was at this stage that if a particular supplier had concerns with the bid specification detail, they would raise concern. It claims that no concerns were registered and this signaled the transition to the next stage of the procurement process.

NITA-U Communications Manager, Steven Kirenga says the authority didn’t handover any form of regulation of the National Backbone Infrastructure (NBI) to any third party.

He said NITA-U continues to operate as per the NITA Act 2009.

“NITA-U outsourced the management of the NBI to a managed services provider, Soliton Telmec, to manage the day to day operations to ensure that we provide a reliable and consistently ‘on’ service to our customers, Ministries, Departments and Local Governments,” said Kirenga.

Government spends about Shs12bn on managing the infrastructure which the whistleblower says is a huge amount given the nature of task at hand.

Kirenga said the contractor’s scope of work goes beyond maintenance.

“The day to day operations include maintenance of all NBI equipment at MDA sites and transmission sites across the country i.e. Network equipment, Generators, air conditioners, CCTV, UPS, Inverters etc,” he said.

The contractor is required to maintain over 2,400kms of fibre, pay electricity bill for transmission sites and the main distribution center, make payments of fuel for generators and meet costs of health insurance and salary of staff.

Soliton also foots the bill of insurance of the Infrastructure; maintains vehicles and fibre network and all NBI equipment; and also run a network operating centre and help desk.

Uganda government did not seek to manage the network hence securing a service provider.

Kirenga says globally, the Managed Services model is the best practice and allows for institutions to benefit from shared value by having a Network partner take over the management and enhancement of highly evolved network process capabilities which leads to significant enhancement in the delivery of a superior Customer Experience.

“The assertion that NITA-U has overseen the financial loss of tax payer’s money is not true as the engagement of a managed service partner is an industry best practice. Reference can be made to banks and telecommunications companies where Business Process Outsourcing has been carried out as testimony to this being, indeed, best practice,” he observed.

Outsourcing is part of Government’s BPO program as outsourced parties provide employment to Ugandan citizens.

While NITA-U is providing high speed internet to Government Ministries, Departments and Agencies, the cost remains a contentious issue.

The whistleblower said in his/her report to President Museveni that Soliton charges NITA-U $200 per Mbps to a government ministries, departments and agencies.

Kirenga wondered: “Surely, on the face of it, if NITA-U charges $70 per Mbps to a ministry, how would it manage to pay $200 per Mbps for the same capacity to Soliton in transport charges? This is clearly not true.”

He said NITA-U remained committed to digitizing Uganda by reducing the cost of internet connectivity country.

“This effort has been deliberate and we are happy to have led the industry in reducing the cost of connectivity to Government offices by over 84 percent since 2010, when 1Mbps cost a government office $1200 to the current cost of $70 for 1Mbps.”

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