Economy

Taxpayers to fork out Sh22bn for national security network

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Safaricom CEO Bob Collymore. Photo/FILE

The full cost of the national security network that telecoms operator Safaricom is set to build for the government became clearer Wednesday after the company’s top officials appeared before a parliamentary committee to answer questions on the contract.

It will set taxpayers back some Sh21.5 billion to have a network covering the 47 counties or Sh7 billion more than the Sh14.9 billion initially announced.

Safaricom chief executive Bob Collymore told parliamentarians that the Sh14.9 billion is the price of the initial phase of the contract covering two major cities of Nairobi and Mombasa.

READ: Safaricom defends Sh15bn security tender award

"Safaricom told us that the estimated cost to establish the network... is Sh21.5 billion. But the current contract is only for Nairobi and Mombasa,” said Asman Kamama, chair of the House security committee.

The figure includes the Sh440 million that taxpayers will fork out annually in maintenance fees to run the digital security system for five years, totalling Sh2.2 billion over the 5-year period that Safaricom will manage it.

The Communications Commission of Kenya (CCK) last week priced the spectrum on which the eLTE system will run at Sh6.7 billion. That would have taken the total cost to about Sh28 billion or nearly double ZTE’s Sh17.7 billion bid that was thrown out for having been ‘grossly inflated.’

The government has however announced that it will grant Safaricom a waiver on the spectrum fee – sparing the taxpayers the burden.

Safaricom also revealed for the first time that it will be working with Chinese technology giant Huawei to design, construct and operate the highly sophisticated communication system for the Kenya Police Service.

The enterprise Long Term Evolution (eLTE) technology that Safaricom plans to deploy as the backbone of the security network is the property of Huawei and is already in use by police in a number of Chinese cities.

Mr Collymore told the National Assembly’s departmental committee on administration and national security that the contract it was awarded last month is exclusive to Nairobi and Mombasa but telecoms experts said the government has no option but to award the remaining bit to Safaricom to have a compatible and functioning system.

Safaricom was last month awarded a Sh14.9 billion tender to set up a security communication platform that runs on Huawei’s broadband technology.

Parliament on June 5 suspended the award of the security tender technically known as the Integrated Public Safety Communication and Surveillance System (IPSCSS) to Safaricom pending the outcome of an enquiry into the legality of the contract.

READ: House suspends Safaricom’s security tender

Activist Okiya Omtatah has also moved to the High Court seeking a declaration that the Safaricom deal is unconstitutional.

Mr Kamama said the committee will look into the price escalation of the project that was mooted in 2001 but has remained elusive for more than a decade because of tendering problems.

“We’ll do a comparative analysis and give the findings to the House,” Mr Kamama said.

Mr Collymore Wednesday told the legislators that Safaricom has the technical and financial muscle to build the security infrastructure within four months.

His selling point was that Safaricom was ready to roll out the contract and only receive payment later in a deal making it most attractive to a cash-strapped government struggling to meet competing needs.

READ: Safaricom feels heat of doing business with the government

“Safaricom is implementing this project at no cost to government for the first 12 months from the date of commissioning. The government will commence payments thereafter for a period of five years, in instalments,” he said.

Huawei is ready to supply the requisite hardware and software for the police communication, command and control system in two months’ time, Mr Collymore added.

Safaricom will build two operation centres in Nairobi and one in Mombasa, install 1,800 damage-proof, high definition and ultra-high definition CCTV cameras across the two cities and build 60 LTE base stations in Nairobi and 20 in Mombasa.

It will also build four video conferencing facilities in Nairobi and another in Mombasa, offer Internet connection to 195 police stations and supply 6,000 walkie-talkies with face recognition capabilities linked to a national register database.

The inclusion of Huawei in the security contract coupled with Safaricom’s foreign ownership raised eyebrows, with MPs saying it further increases the threat of infiltration and espionage hence exposing Kenya’s national security.

British telco Vodafone is Safaricom’s single-largest shareholder with a 40 per cent stake.

Huawei’s main servers in Shenzhen, China, including its Kenyan operations, were last year hacked by the US’s National Security Agency (NSA).

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