How taxpayers stand to lose Sh1b in digital migration plan

By Martin Mutua

Kenyan taxpayers will lose close to Sh1 billion in the much talked about digital migration if a contract between the Kenya government and a Spanish company is executed.

The contract, a copy of which the Standard On Saturday has seen, is between the Ministry of Information, Communications and Technology and a Spanish company known as Algoritmos, process Y Disenos (APD) SA.

The contract is for the digital terrestrial television coverage rollout on the DVB-T2 platform in 10 sites countrywide.

Interestingly, according to the document the rollout, if executed, will cost 10.3888.903 Euros, which is about Sh1.2 billion.

The rollout sites have been identified as Garissa, Wajir, Kapenguria, Kitui, Mbui Nzau, Maralal, Lodwar, Marsabit, Lokichogio and Lamu.

The amount quoted is exclusive of all government taxes including the 16 per cent Value Added tax.

Rollout undertaken

But sources told The Standard On Saturday that rollout of nine sites that had recently been undertaken by the State owned Kenya Broadcasting Corporation (KBC) and a local company cost the taxpayers Sh550 million inclusive of VAT.

The first four sites, according to our sources, which included Nyeri, Eldoret, Meru and Nakuru, amounted to Sh280 million while the other five that included Limuru, Kisumu, Vulia, Mazeras and Webuye cost the taxpayer Sh270 million, bringing the total amount to Sh550 million.

Even then, the nine sites, according to our sources, had a higher voltage of five kilowatts, whereas the impending 10 sites have their voltage at two kilowatts.

When contacted separately for comment, Information Cabinet Secretary Fred Matiang’i (pictured) and his Permanent Secretary Joseph Tiampati said they were in a meeting. Both promised to return our call.

On Friday we called Mr Tiampati and sought his comment on the same and he promised to call back after he was through with a meeting.

But by the time of going to Press he had not returned our call. He and Mr Matiang’i were not picking any further calls from us either.

According to our sources, were KBC to enter directly into the contract with the company, the amount would have been cut by half, since there was already a precedent by a local company that installed similar equipment in the 10 sites.

“But the ministry has taken charge of the contract, making it look like it is a government to government project whereas it is not because the end user is the KBC while the purchaser for the equipment is the Information, Communication and Technology Ministry which is raising more questions than answers,” the source said.

According to the contractual agreement network deployment equipment will cost 6.339.140 Euros, while services and shelters plus satellite will cost 1.853.411 Euros.

The primary infrastructure for the 10 sites is to cost 822.144 Euros while guarantee for two years is to take 1.374.208 Euros, works and services will guzzle 9.566.759 Euros while works by the Ministry of Information who are the purchaser will spend 822.144 Euros.