Uganda: Government starts investigation in cable deal with Huawei
The Uganda government has begun an investigation into the long-delayed cable deal with Huawei. The government’s ICT minister, Nyombi Thembo said that a consultant was conducting an independent audit to see whether the government had got value from the contract with the Chinese vendors. In late 2006 the Ugandan government contracted Huawei to deploy its national data transmission backbone infrastructure and e-government infrastructure.
The project was due to take 27 months and cost UGX201 billion (USD106 million), however by the projected completion date, January 2009, only phase one had been completed and it also reported severe problems with the system. The government alleges that Huawei installed inferior hardware and charging far in excess of the contract’s value. Huawei installed G652 fibre-optic cable with 24 cores, rather than G655 cable with 96 cores. For installing 2,100km of cable Uganda will pay USD61 million, whilst neighbouring Rwanda installed 2,300km for USD38 million with another vendor using the ‘superior’ cable. Funding for the project came from the Export and Import Bank of China, which also recommended Huawei for the project – the Ugandan government has not said whether or not commissioning Huawei was a condition of the loan.
The project was halted in January last year, when the discrepancies came to light. If the cable is eventually completed, it is feared that not only will the network be insufficient to meet the country’s need for bandwidth, but it will also incur enormous maintenance costs as a result of the installation. The government claims the G652 is prone to signal interference, and can only transmit a signal 80km without being boosted. To make matters worse, the cable has apparently been buried too close to roads and too close to the surface, less than 15m and 1.5m respectively. This leaves the cable vulnerable exposure and damage. It is feared constant repairs will only rack up further costs, further debt, and prevent Uganda from making the most of its telecoms resources. So why did the Government go-ahead with the project in the first place?