  Uganda backbone project latest victim of corruption charges
Reported by Industry Standard on Thursday, 12 November 2009 (on November 12, 2009)
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The suspension of work on Uganda's national fiber backbone and e-government infrastructure, estimated to cost a total of US$106 million, is the latest case in a string of eastern and southern African telecom and ICT projects that have been hit by charges of corruption.
Ugandan legislators investigating the alleged mishandling of the two projects have ordered a forensic audit. The country's Ministry of ICT has over the past few months been battling allegations of fraud and mismanagement of the $30 million first phase of the project, which was contracted to China's Huawei Technologies.
Work has been stopped for several weeks and the government is not saying when it will be resumed.
"The construction of the national backbone fiber has been suspended until all investigations into the project are concluded by the auditor general," said David Kirya, a spokesman for the ICT ministry.
The move came after industry insiders first raised a red flag two months ago, in comments on a popular mailing list, i-network@dgroups.org. List members pointed out irregularities regarding the recruitment of board members for the newly created National Information Technology Agency (NITA) Uganda -- the management arm of the ICT ministry. The ministry also failed to contract a third-party technology entity or set up a special-purpose vehicle to manage the two projects, and as a result sections of the fiber network have been damaged and equipment stolen, Badru Ntege, a technology enthusiast and investor, pointed out.
A tour of the two projects by the legislators on the parliamentary ICT committee confirmed Ntege's comments.
Critics of the project also have asked why the National Backbone Infrastructure has never been connected to privately run fiber networks as part of efforts to boost capacity in the country. Legislators also concluded that there may not be enough bandwidth provision for future upgrades of the fiber cable.
Other problems involve the lack of a disaster recovery center and a Network Operating Center for the first phase of the projects.
The Ugandan government secured a $106 million loan, with a 2 percent interest rate payable over 20 years and a grace period of five years, from China's Exim Bank in 2006 to undertake the projects.
The backbone plan entails the laying of 2,500 kilometers of fiber-optic cable, while the e-government project aims to connect government ministries, departments and local governments.
Last year, the Ugandan Parliament complained of irregularities in the designation of the contractor by the ministry of ICT, but the project was allowed to move ahead. Legislators raised questions after realizing that the project in Uganda is very expensive compared to the same project in Rwanda. Rwanda is carrying out a similar project and laying 2,300 kilometers and has only spent US$38 million. That project is on schedule to be completed in just a year.
Issues facing the Uganda infrastructure efforts are similar to problems arising in other ICT projects in Africa. In Nigeria this year, for example, government officials were arrested on corruption charges related to a telecom project, while Siemens was banned from bidding for World Bank-funded projects in the country. In South Africa, a 7 billion South African Rand (US$987 million) electronic payment system was canceled in the wake of allegations of corruption among government officials.
The sale of Nigeria's incumbent operator, Nitel, has also been marred by corruption charges and lack of transparency by senior government officials and board members. The privatization of Ghana Telecom was also marred with similar allegations, which ended up in court.
In Zambia, government officials have been accused by telecom experts and political leaders of corruption in the manner in which they awarded RP Capitals of the U.K. a $2 million contract to evaluate the assets of the government-run Zambia Telecommunications Company (Zamtel) to pave the way for its sale. The allegation led to the resignation of Minister of Communications and Transport Dora Siliya early this year.
In addition to the evaluation of Zamtel's assets, however, RP Capital has also been allowed to source a company to buy the company.
"The president and senior government officials are not willing to stop the sale of the company because of the kickback they have been given by the company that wants to buy Zamtel," said an opposition leader, Hakainde Hichilema, a member of the country's United Party for National Development.
Some countries are reporting progress in combating corruption, however. In Kenya, the government is hoping to save more than $680 million annually by implementing electronic bidding applications that will help prevent corruption by government officials. The systems are expected to bring real competition in the bidding process, avoiding the prequalification process employed in many nations -- and allegedly used to favor companies that give government officials kickbacks.
Links: Full news story
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