Huawei picked for Sh6bn fibre optic deal

Huawei, a Chinese telecommunication firm, has secured an exclusive tender to build a Sh6 billion national fibre optic infrastructure and e-government projects expected to start in August.

The Chinese firm will be the sole contractor of the multibillion-shilling project that will link Nairobi with other towns through Wide Area Network (WAN). 

China is set to provide a loan of Sh460 million (Sh6 billion) whose conditions include awarding the contract to Huawei, said Information permanent secretary Bitange Ndemo.

“Part of the conditions is that the roll-out of the project be handled by Huawei,” said Dr Ndemo in an interview with the Business Daily.

“The prime minister is expected to travel to China on 16th of this month to sign the loan agreement and the roll-out of the project is expected to begin by August.”

While the restriction of the project to Huawei is unlikely to sit well especially with western firms like Alcatel Lucent, Nokia Siemens and Erickson, it is common in Chinese-funded projects.

Chinese telecom firms are fiercely competitive with State-owned Huawei and the private ZTE having won multi-billion shilling contracts in Telkom Kenya and Safaricom, outshining western rivals who were dominant players in the 1990’s.

In August 2010, Safaricom signed a three-year contract with Huawei for supply of its core network requirements, and roll out the 4G network at a cost of Sh12 billion ($143 million).

Its Chinese rival ZTE, on the other hand beat its rivals to clinch the tender for the roll-out Telkom’s Kenya 3G network at a cost of Sh4 billion.

Already, Treasury permanent secretary Joseph Kinyua and Chinese vice-minister for commerce Chen Jian have signed provisional agreements for the fibre optic loan.

READ: Treasury signs Sh6bn Chinese loan to boost e-government plans

Second contract
The government plans to use the fibre optic infrastructure to boost the delivery of online services such as registration of Personal Identification Number (PIN), filing tax returns and monitoring the processing of passports and birth certificates.

The Treasury needs the fibre optic cable infrastructure to roll-out services such as Integrated Information System (IFMIS) software that combines budget preparation and execution, accounting, financial management and reporting activities.

The system allows for the government books of accounts to be updated in real-time, making relevant information available to stakeholders on a timely basis.

The platform will not only create transparency, but also reduce corruption and lower administrative costs.

This is second IT contract that has be reserved exclusively to a Chinese firm after government revived part of the controversial Anglo Leasing projects in a tied aid deal with China, that saw firms from the west barred from bidding.

The tender for the security contract states that only Chinese companies are eligible for the Kenya Police Services telecoms project whose deadline and opening of bids was February 20.

The increased Chinese interest matches with President Mwai Kibaki’s administration shift towards the east as opposed to the west.

mokuttah@ke.nationmedia.com