Kenya: State-owned fibre optic cable not viable, says auditor-general

Internet

The Auditor–General has questioned the economic viability of a government-owned terrestrial fibre cable.

An audit revealed that by last year, more than Sh12.5 billion had been used to finance the National Optic Fibre Backbone Infrastructure (NOFBI) project.

Over Sh2 billion was paid as advance fees to contractors, management fee, commitment cost, operations and maintenance to Telkom Kenya.

“NOFBI project is not generating sufficient revenue to maintain its own operating costs; taxpayers are also being subjected to repaying the concessional loans received from China to finance the project, totalling over $110 million ($37 million for Phase I and $72.5 million) for Phase II, plus additional loan management fees,” Auditor-General Edward Ouko said in a statement to Parliament.

Despite the billions spent on the project, the cost of the Internet in Kenya remained higher than the UN target for developing countries. County government offices are still using modems.

NOFBI Phase I was implemented between 2007 and 2009, covering 5,000 kilometres along major roads in central, western, coast and northeastern regions for use by the counties. The second phase is ongoing and entails adding 2,100 kilometres to improve network reliability, provide wider bandwidth and expand e-government services.

Mr Ouko accused the ICT ministry of having failed to create awareness about the existence of the cable, which led to insufficient use of its extra capacity. No income was generated in the long-run, subjecting taxpayers to heavy financial burdens, he states.

The ministry, however, said in a statement that through the Universal Service Fund, it would facilitate the expansion of the broadband reach to the counties and marginalised areas.

It said it would review its current contract with Telkom Kenya, with a view to making it more robust or terminate it and seek new cable managers.

The ministry also plans to increase uptake of the fibre by attracting transit traffic from neighbouring countries through the Northern Corridor arrangement.
Source: Daily Nation 7 April 2015