Keith Muhakanizi, the deputy secretary to the treasury, pointed out this week that a memorandum of understanding had been signed, but the loan process had been halted.
“We don’t have any other instructions other than stopping it,” said Muhakanizi. He said the decision to restart the process would come from the Prime Minister’s Office where the project falls.
It was not clear whether the stopping of the loan was linked to concerns about the procurement process and the alleged cost inflation for the supply and installation of TV studio equipment.
But Nandala Mafabi, the Leader of Opposition, faulted the procurement process and the cost of the project. He also questioned the cost for the different aspects of the project.
“The list of equipment in tender is totally different from that on the contract.
“Also, according to the expert in this industry, the real value in this contract is between $20m and $28m, maximum $30m, even if the best US and EU equipment is to be used,” said Mafabi.
He also cited a technical process of establishing the main system to handle TV programmes for Kampala service area and to upcountry regions, which UBC TV quoted at $5.8m.
“But in the market, to realise such function will need a maximum of 10 transmitters, which will cost $1.2m,” said Mafabi.
He also questioned the cost of acquiring an outside broadcasting equipment, which UBC TV quoted at $1m.
However, industry experts put the cost at $300,000 for a full set of in-built digital TV equipment.
Mafabi noted: “By private negotiation, Huawei signed an agreement worth $74m with UBC, meaning the tender was awarded without advertising.”
UBC last year invited bids for the installation of 28 digital television stations across the country. The migration to digital broadcasting is a mandatory requirement for countries to upgrade from analogue to digital by June 2015. Uganda’s target is December 2012.
Simon Mayende, the director of information and national guidance, explained that under the Public Procurement and Disposal of Public Assets Authority rules, one is not obliged to commit to procuring firms to do the works until they get the money.
“We have it as unfunded priority. It was one of the proposals (loan) put forward for raising funds for this project,” said Mayende.
Jane Kasumba, the UBC publicist, said two broadcasting channels for the Kampala area were being tested at Kololo Hill as part of the migration process even if there is no legislation to guide the entire process now and when the digital becomes operational.
Kasumba said: “Established procurement procedures are being followed to select a competent company to implement the digital migration project.”
“The Huawei deal is dependent on the source of funding. If the Chinese grant materialises, it has a conditionality to engage Huawei as the implementer,” she pointed out.
“But UBC will engage an independent consultant to check the supplies and oversee the installations by Huawei.” There are reports that countries that have established similar stations have spent less than sh1b to adopt digital technology stations from the US, which are superior.
Huawei is the firm that carried out the National Fibre Optic backbone project, which ran into scandals.