The Senate is set to investigate why former President Olusegun Obasanjo obtained a $500 million (N59 billion) loan for a telephone project despite his government�s claims of rapid privatization of the sector. The rural telephony project for which the administration obtained the loan from China and caused Nigeria to pay 10% equity contribution is at the centre of the Senate enquiry under the aegis of the Senate Committee on Communications.
The Senate probe is coming against recent fear of the nation�s growing debt burden despite the debt pay off agreement between Nigeria and the Paris Club of debtor nations two years ago.
Though neither of the first two phases of the project is yet to be completed or commissioned, Obasanjo had, according to a memorandum to the Senate from the Federal Ministry of Information and Communication, given a verbal order for the commencement of the third phase of the project.
Senator Sylvester Anyanwu, chairman of the Senate Committee on Communications, who confirmed the imminent Senate probe, told Sunday Vanguard that the Senate was more worried that the project was conceived at a time the Federal Government had already given license to telecommunication companies for the nationwide coverage of the country.
He, however, would not declare the rural telephony project nor the process of obtaining the Chinese loans as fraudulent asserting that the committee would like the former president to declare his stance at the imminent Senate probe.
Anyanwu, like the memo from the ministry, wondered why the government was again going into the business of providing telecommunication services despite its recent efforts at withdrawing from the sector with the privatization of NITEL, the country�s first national carrier.
Besides, he expressed concern that the idea of the rural telephony project materialized at the same time the GSM operators were fanning themselves across the country making the idea superfluous.
�Unfortunately the time when these ideas were initiated were almost at the same time when NITEL and other communication agencies were being privatized,�� the Senate Committee chairman said.
�The same rural telephone project is being handled by several other providers. If you know what is happening, for instance, Globacom is almost everywhere, MTN is making the same effort to get their signals in all parts of the country. NCC also has a project called rural telephone project. We are concerned about the overlapping of efforts,�� he said.
Construction of the first phase of the rural telephone project was awarded to three Chinese companies namely ZTE Corporation, China Machinery Import and Export Corporation and Alcatel Shanghai Bell Ltd. in July 2002 following a $200 million loan from China.
Though work on the project is almost completed, the memo circulated to the Senate by the Ministry of Information and Communication, however, lamented that the �network is yet to be interconnected with the Public Switched Telephone Network (PSTN) � NITEL��.
Senate officials and other stakeholders, Sunday Vanguard learnt, are concerned that NITEL is not in a hurry to connect the new exchanges as it is insisting on a purely commercial relationship with the new exchanges built by the Chinese.
�Due to the historical relationship that had existed between the Ministry and NITEL, the NRTP network, from the inception was conceived and designed to leverage on the existing NITEL infrastructure. However, due to the privatization of NITEL, the company�s policies have changed. The company has therefore insisted that the ministry should pay fully for all the services required.��
�Due to the delay encountered in accessing the funds for these services, it has become difficult for NITEL to cooperate or oblige interconnection with the NRTP which is critical to the functionality of the whole network,�� the memo stated.
With the first phase yet to come on stream, the Obasanjo administration in March 2006 signed another agreement with the Chinese government for the implementation of the second phase of the rural telephony project.
$300 million was provided as loan by the Chinese government for the implementation of the project with the Nigerian government providing 15% of the counterpart funds.
�The counterpart funds (down payments) of 15% of the contract values are being paid to the contractors,�� the memo revealed even though work on the second phase is yet to commence and with Nigeria already servicing the loans obtained for the Chinese companies to work on the second phase.
�The immediate past president had verbally granted approval for the contract of the 3rd phase to be processed within the tenure of his administration in order to ensure that all the local government areas (LGAs) in the country are covered,�� the memo stated.
Dec232007