Macra stops K14bn Internet deal

 Malawi Communications Regulatory Authority (Macra) has stopped the Public Private Partnership Commission (PPPC) from awarding a K14 billion World Bank-funded contract to provide fibre optic services to government offices due to alleged violation of laws.

Macra director general Daudi Suleman confirmed in an interview on Thursday that the regulator communicated to the Ministry of Information and Digitisation that the contract should be put on hold.

He said: “There are a number of issues that have to be cleared first, but the major one is that the Communications Act mandates operators of communication services in Malawi to have a minimum of 20 percent local shareholding.

“So, for two firms awarded this contract we have been working on normal ising that. We found that there is a breach of this provision and our position to the ministry is that we should first clear this issue before this contract can proceed. It is a normal process.”

PPPC awarded the contract to Bengol.Net Limited, a joint venture with Bengol Tele-Construction Company and Inq. Digital Limited.

Bengol’s aggregated contract amount for Lot 1 and 2, quoted in dollars, is $11 156 128.43 (about K12 billion) while Inq. Digital has been given K2 092 722 306 for Lot 3 and 4.

PPPC was scheduled to sign the contract deal with the firms at a hotel in Blantyre on Thursday afternoon, but the ceremony was called off before the appointed time.

On whether Macra was involved prior to award of the contract, Suleman said his institution was not engaged because “ever yone i s doing their part, so for us as a regulator the 20 percent shareholding is an issue”.

Minister of Information and Digitisation Gospel Kazako on Thursday confirmed receiving a communication from Macra and said the

 contract signing should be pended until there is clearance.

He said: “The reason is that the regulator [Macra] has not concluded its due diligence on matters bordering on regulations. Government is ready to sign as soon as all issues are properly stitched up and seen to be in the interest of  Malawians.”

PPPC chief executive officer Patrick Kabambe said he would revert with responses to our questionnaire. He was yet to do so by the time we went to press at 9pm.

A World Bank project report (PAD2285) we have seen shows that the digital foundation project is worth $72 million and was signed in 2017 to run for five years.

The objective of the project is to increase access to affordable, high quality Internet services for government, businesses and citizens and to improve the government’s capacity to deliver digital public services. Part of the project is also to ensure that Internet cost is affordable and accessible to the population.

In 2017, under the World Bank loan, government launched SimbaNet, a price-competitive Internet service provider (ISP), with a promise to lower prices for Internet to make it available to many. This project too had a component to have government offices and businesses connected to reliable internet.

The project, called Regional Communications Infrastructure Programme- Malawi was implemented by the Department of E-Government in the Ministry of Information and Communications Technology through the Public Private Partnership (PPP), to improve Internet connectivity in the country.