Safaricom gets Sh1.5bn for police cameras deal

The Treasury has paid Safaricom #ticker:SCOM Sh1.5 billion after the giant telco threatened to disconnect a security and surveillance system it built on behalf of the National Police Service, parliamentary records reveal

The National Assembly’s Budget and Appropriations Committee (BAC) said Safaricom had signalled it would disable the surveillance system over the unpaid bill, an outcome that could have derailed police pursuit of criminals through CCTV cameras mounted in Nairobi.

Under the terms of the security contract, Safaricom in 2014 started installing a Sh14.9 billion communication and surveillance system that is linked to police stations to help combat crime in Nairobi and Mombasa.

The State was expected to make quarterly payments to Safaricom to clear the bill, but the repayments have been trailing the agreed schedule.

Safaricom had completed construction of the system by March 2016 and the contract demanded that the government reimburse the firm quarterly over a period of five years. Parliamentary documents show that the government paid Safaricom Sh9.27 billion in 2016 and Sh881 million in the three years to end of June 2019, leaving a balance of slightly above Sh5 billion.

The Interior Ministry had in 2014 awarded Safaricom the tender to construct the communication and surveillance system as a smart tool to battle crime in the wake of numerous terrorist attacks. The project involved connecting 195 police stations in Nairobi and Mombasa to a high-speed, fourth-generation (4G) network to ease communication.

Safaricom was also mandated to supply the police with radio communication devices (GSM walkie-talkies fitted with SIM cards and cameras) that can take pictures at crime scenes and send real-time data to the command centre for analysis.

The first phase of the surveillance system went live in May 2015 and Safaricom said it had trained more than 10,000 police officers on how to operate and maintain the system. The contract also involved installation of tamper-proof, high definition and ultra-high definition CCTV cameras in Mombasa and Nairobi, which are connected to a national command and control centre. The national surveillance, communication and control system links all security agencies — military and police — electronically, making it easier to share information and direct operations.

Safaricom was also expected to receive coveted spectrum as part of the payment, which would allow it to roll out fourth-generation (4G) broadband internet services, also known as LTE. Spectrum remains a hard-to-come-by resource for Kenyan operators and Safaricom had been experiencing network quality issues due to lack of adequate spectrum.

In November 2016, the government paid Sh7.5 billion to Safaricom as initial instalment for the 2014 building of the security system. The amount was about half of the total Sh14.9 billion that Safaricom expects from the deal.

The government committed to pay the remaining Sh7.4 billion in quarterly instalments of Sh939 million from December 24, 2016 and was to continue until the full amount was paid.

John Mbadi, the Leader of Minority in the National Assembly, who is also a member of BAC, said the committee had rejected the allocation of Sh1.5 billion for the security surveillance system, but the government put pressure for approval since the money had already been released.

“We had rejected the huge allocation to the National Security Surveillance System but the government put pressure on our committee with an explanation that they had already made commitment to pay,” Mr Mbadi said.

“The money has already been released to the Ministry of Interior to pay the service provider. If this is not done, the service provider may switch off the service and we as a country will be left under the mercy of thugs.”

Kenya’s quest for a modern security surveillance system started in 2006, but has been beset by tendering hiccups that saw two Chinese firms, Huawei and ZTE, get involved in a protracted legal battle, leading to cancellation of the tender by the procurement watchdog.

The tendering fights prompted the award of the contract to Safaricom, which sparked a row when critics complained that it had been awarded without an open bidding process.

Administration and National Security Committee member and Homa Bay Town MP Peter Kaluma said the committee was alive to danger of failing to pay the service provider. “Our committee is alive that there is danger if money is not given. We know that critical security system is going to be suspended.

“I request MPs to bend backwards on this payment because of the security situation in our country and especially during this Covid-19 pandemic where people are being robbed in broad daylight. I ask you to support the payment,” Mr Kaluma said.