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The East African : Oct 13th 2014
14 ONE NETWORK AREA The EastAfrican NEWS OCTOBER 11-17,2014 Museveni launches SGR, but snags abound By DICTA ASIIMWE Special Correspondent DESPITE A HIGH profile launch this week by the leaders of Rwanda, Uganda and South Sudan, Uganda’s $7 billion Standard Gauge Railway project is still haunted by procurement snags. The leaders launched the Cheap cross-border calling rates to start in November Reduced calling ≥ates will imp≥ove communication and stimulate g≥owth in the telecoms secto≥ A JOINT REPORT The EastAfrican M obile telephone subscribers in Kenya, Uganda and Rwanda will have to wait until next month to fully enjoy cheap crossborder calls after the heads of state of the three countries postponed the official launch of the One Network Area for the third time. John Nasasira, Uganda’s Minister for Information and Communication Technology, said each of the presidents will now launch the One Network area in their respective countries on November 1. Mr Nasasira said the lat- est postponement was occasioned by the absence of the President Uhuru Kenyatta of Kenya at the Northern Corridor Infrastructure Summit held in Kampala on October 8-9. President Kenyatta was at The Hague, Netherlands, attending the status conference deliberating on the case he is facing at the International Criminal Court. “The presidents wanted to launch this together but as you know President Kenyatta is not here today,” said Mr Nasasira. The harmonised calling rates were to be effected after the end of the meeting attended by Presidents Yoweri Museveni, Paul Kagame and Salva Kiir, Kenya’s Cabinet Secretary for Transport and Infrastructure Michael Kamau, Ethiopia’s adviser to the prime minister Fassil Hahom and Burundi’s Senate President Gabriel Ntisezerana. The other reason given was that Uganda was not ready by the time the meeting was being held in Kampala. The postponement will now allow Uganda, which is yet to waive excise duty on calls originating from Kenya and Rwanda, to do so. “Kenya and Rwanda have already waived taxes on calls originating from the region, but by the time Uganda did this, it was too late,” said Mr Nasasira. He said though Uganda waived the tariffs this month, taxes charged on regional calls are excise duties and are normally paid in advance. “So the telecom companies had already paid for October, which is why we have decided to wait until November,” he added. The scheme is impor- tant for East African residents who had been forced to bear the burden of high cross border calling rates due to numerous duties imposed by East African Community governments. It is believed the reduced calling rates will improve communication and stimulate growth in the telecommunications sector, which has in the recent past become an important contributor to member countries’ gross domestic product. Kenya, Uganda and Rwanda hammered out the One Network Area agreement under the Northern Corridor Infrastructure Integration Framework, which also includes non-EAC member South Sudan. However, despite the post- ponement of the One Network Area launch, mobile phone subscribers in Kenya and Rwanda have begun benefiting from the scheme after the two countries resolved a dispute over a recent order by Kigali to introduce new levies on international calls. The breakthrough was al- so confirmed by mobile telephone operators Safaricom (Kenya) and MTN (Rwanda), which have been in talks for some time over the reduction of calling rates. Early in the month, Sa- “Kenya and Rwanda already waived taxes on calls originating from the region.” faricom announced it had reduced its calling charges between the two countries from Ksh25 ($0.29) to Ksh10 ($0.11) per minute but later rescinded the decision after the Rwanda government announced its plans to intro- WHAT IT MEANS The agreement also means that Safaricom and MTN subscribers will not be charged for receiving calls while on roaming in Rwanda and Kenya. In the meantime, calls from either Kenya or Rwanda to Uganda and vice versa remain the same, since the latter has not fully implemented the policy guidelines on one network area as was agreed by the Information ministers of the three countries under the Northern Corridor Infrastructure Framework. duce new levies on international calling and roaming tariffs between the two countries. However, the two governments have since agreed to remove duties on crossborder calls between Kenya and Rwanda, paving the way for the reduction in rates. The latest development was also confirmed by Kenya’s Information Cabinet Secretary, Fred Matiang’i, who said the two countries had resolved to implement the One Network Area as ordered by the Northern Corridor Heads of State Summit. “The information minis- ters of Kenya, Rwanda and Uganda have been working hard to ensure the One Network Area comes into effect before the end of the year,” said Dr Matiang’i. By Dicta Asiimwe, Jeff Otieno And Alex Ngarambe Presidents Paul Kagame of Rwanda and Yoweri Museveni of Uganda at the 3rd Uganda-Rwanda Business Forum in Kampala on October 8, 2014. Picture: Morgan Mbabazi project in Kampala on October 7, as Uganda scrambled to kick-start it with a tentative completion date of March 2018. As government officials put on a show, questions were still being asked not only over how the procurement of the contractor had been handled but also over the basis upon which the contract price of $7.9 billion had been arrived at. The EastAfrican has now learnt that the contracts committee of the Ministry of Works has thrown a spanner in the works, refusing to award a contract to civil contractor China Harbour and Engineering Works (CHEC), citing noncompliance with procurement regulations. In the letter dated Octo- ber 7, the committee members say they were asked to approve the contract with CHEC because the deal had already been approved under bilateral procedures. The contract committee however pointed out that it had not seen any evidence to corroborate this. “This is to inform you that at its 623rd meeting, the contracts committee considered the submission forwarded under your internal memo of 7th October 2014 and noted that the contracts committee did not approve this procurement as per Section 28 of the PPDA Act. However you have given an explanation that the procurement follows bilateral procedures and conditions for which you have not availed the documents in support of the bilateral procedure. The contracts committee is therefore unable to award the contract,” reads the memo signed by committee secretary Kivumbi David. Documents further show that while the government was proposing to pay CHEC $7.9 billion for the 513 kilometre railway line, no detailed technical designs were made available to justify the price. The proposed price, almost equivalent to what Uganda will spend on the 600 Megawatts Karuma hydropower project and transmission lines, is at least $2 billion higher than what rival China Civil Engineering Construction Corporation (CCECC), whose memorandum of understanding for the project was unilaterally terminated by the ministry, had quoted. No contract yet President Yoweri Musev- eni, who launched the railway along with his counterparts Paul Kagame of Rwanda and Salva Kiir of South Sudan on October 8, appeared oblivious to the raging controversy. Speaking at the launch, Museveni said Uganda had chosen and would sign a contract with CHEC to construct the SGR and funding for the project would be sourced after the signing of the contract. “We have linked up with CHEC which has good experience in constructing railways, bridges and harbours and it will be their job to source for the money, a loan which we shall pay back,” he said. President Museveni ex- pects CHEC to work with the army but added that the contract had not been signed because some details had to be ironed out first. The details that have to be worked on now appear to include coming up with a technical design that has a contract price that makes business sense.
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