Kenya: Concern over lack of competition for rural telecom project

Wednesday, 12 September 2007

There is disagreement between two Kenyan government ministries over the single sourcing of a US$ 62.9 million rural telecommunications project. Joseph Kinyua, the Treasury Permanent Secretary, wanted Phase II of the Kenya Rural Area Telecommunications Project tendered competitively by Chinese companies represented in the country. However, Information Permanent Secretary, Bitange Ndemo, chose to award the project using single sourcing. In a letter addressed to the Chinese Ambassador, Zhang Ming, Kinyua said that competitive bidding would enable the Government to get the greatest value for money and would promote transparency. On July 9, 2007, Kinyua also wrote to Ndemo, informing him that the project should be tendered competitively. Despite Kinuya’s urgings, Ndemo reportedly told a competing company that the project was an expansion of an existing network. "As you would appreciate, your company cannot expand Huawei's or any other vendor's system," Ndemo told the interested company. Ndemo said experience had shown that multi-vendor networks usually led to high integration, operation and maintenance costs. This, Ndemo said, was clearly outlined in an analysis carried out by PKF on the Telkom Kenya network. "Telkom Kenya has experienced several serious cases of inter-working difficulties with equipment from different vendors leading to loss of revenue and customers," Ndemo said. In its reply, the competing company said that neither the original contract -- which was single sourced and signed between the Government and Huawei in 2005 -- nor the agreement signed with the Chinese Government to finance the project, proposed a second phase. Source: East African Standard - WDR/Intelecon Regulatory News.