The Auditor General has flagged the multi-billion National Fibre Optic Backbone (NOFBI) project over opaque tendering processes.
She said the taxpayers’ resources could have been lost in the project. In 2018/2019, the State Department of Information, Communication and Technology (ICT) paid Chinese firm Huawei Sh1.7 billion for the construction of the second phase of NOFBI.
However, according to the Auditor General, there are no details in respect to the date the payments were made or who authorised the Exim Bank to release the payments.
In the report for the State Department of ICT covering the year ended June 2019, Auditor General Nancy Gathungu says the project lacks crucial documentation over its financing and management.
“Although the financing agreement indicated the government would sell out excess capacity commercially to the public and bill them to finance the loan repayment, there has been no billing done for the last five years it has been in operation,” explained Gathungu in her report.
The service provision framework deal with other internet service providers has not been implemented, with no records provided detailing users and the amount payable by each.
“The government has therefore been funding the operations of commercial entities without recovering the cost, which amounts to lack of prudent use of public resources,” explained Gathungu.
NOFBI started in 2005 as a State project to connect all major towns with high-speed broadband fibre.
Phase one of the project was given to three contractors and connected 28 counties. They were Huawei Technologies, ZTE and SAGEM that took 1,112km, 1,342km and 1,771km, respectively. Phase two was expected to cost Sh7.2 billion funded through the State and China’s Exim Bank, but has run into delays.
The Auditor General, however, queried the automatic extension of NOFBI contracts, lack of an inspection and acceptance committee, and lack of details on the assets created or the billing of service providers.
Last month, Telkom Chief Executive Mugo Kibati told The Standard in an interview that Telkom Kenya was operating and managing NOFBI 1, but noted that there were several variants of NOFBI where the telco was not operating or managing, but supporting.