Sh600 million World Bank grant for BPOs unutilised

By Macharia Kamau

A World Bank subsidy that Kenya received to assist its young Business Process Outsourcing (BPO) industry remains unutilised.

The $8 million (Sh608 million) grant was meant to cushion BPOs and call centre operators from expensive bandwidth for a grace period until a cheaper channel was available, courtesy of the undersea fibre optic cables.

Thus, BPO operators were to buy bandwidth at subsidised prices of about $500 per megabyte per second (Mbps).

Operators pay Sh456,000 per one Mbps, but this is projected to significantly go down to as low as Sh16,900 per one Mbps once the undersea fibre optic cable is operational.

So far, the Kenya Information and Communication Technology (ICT) Board has only dispatched about Sh38 million of the total amount and only a handful of operators have benefited.

However, BPO players blame the current low use of the fund to rigid condition required by the Government before it releases the fund. They term the information required by the Government as "intrusion" rather than a request to show that a BPO centre was genuine and sustainable. This made many of the operators shy away from applying and hence the low uptake of the subsidy.

Confidential information

"Many operators are not comfortable with how their confidential information will be treated by ICT Board," said Ms Gilda Odera chairperson of the Kenya BPO and Contact Centre Society. She adds that the board denied deserving operators and call centers the funding without genuine reasons.

"Some are disgruntled by how other deserving cases have been handled and not approved. Many applications were rejected, some for wrong assumptions made by the auditors, others for lack of proper data," she said.

The subsidy becomes irrelevant once the country gets cheap and fast Internet expected after the commercial launch of the undersea cables, which according to Information and Communication PS Bitange Ndemo should take a maximum of 60 days from the day of landing to go live. And while questions abound as to where the money will be channeled to, failure to absorb the grant in the first place might be a signal that the industry is yet to get its footing.

Mr Paul Kukubo, chief executive ICT Board said the board is in talks with the World Bank to use some of the money in upping the capacity of operators and enhance their competitiveness.