Mergers, Acquisitions and Financial Results

Members of Parliament are furious that the government has signed a memorandum of understanding with a Chinese firm to construct fiber optic network before the legislature approves a US$30 million loan (about Shs51 billion) deal meant for the work.

According to the chairman of the Parliamentary committee on the National Economy Kaddunabi Lubega (MP Butambala), the ministry of Information and Communication Technology signed an agreement with Huawei Technologies Company Ltd to kick start the Uganda Integrated e-Government project, before a loan to fund it was approved.

"We have all the reasons to wonder. We have not approved the loan but the company is already doing the work, if Parliament does not approve the loan what will happen?" Kaddunabi asked. The MPs on the committee said that although the intention of getting a loan is good and is aimed at improving on the information infrastructure, it is not a concession as government claimed.

"A concession loan according to World Bank standards and national debt strategy is supposed to be 1 per cent interest and this one is 2 per cent. The re-payment period is 20 years not 10, and the grace period of 5 years is short compared to 10 years required," Kaddunabi said.

The government wants Parliament to approve the $30 million loan (about Shs51 billion) to enable it contract Huawei Technologies to connect a fiber optic net work from Entebbe to Jinja.

(SOURCE: The Monitor)