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04.06.2018 Press Release

MOC Statement To Parliament On Kelni/GVG Scandal-Bunch Of Contradiction, Ignorance And Dishonesty

By Institute of Social Research and Development
MOC Statement To Parliament On Kelni/GVG Scandal-Bunch Of Contradiction, Ignorance And Dishonesty
LISTEN JUN 4, 2018

The verbose and lengthy statement presented before parliament by the minister of communications on Kelni/ GVG scandal has established beyond all doubts that the Government, the MOC and the NCA have designed a complicated scheme with a predetermined entity to advance selfish personal and/or parochial interest rather than to promote national interest.

The said statement has again reminded critical minds of the adage that that has been attributed to Abraham Lincoln or Mark Twain; Better to remain silent and be thought a fool than to speak out to remove all doubt.

The little doubts surrounding the scandal has been cleared by the said statement and it would have served the minister better if she had remained quiet.

Before I expose the duplicity of the statement, I wish to indulge readers to take a little time to take you through definitions of basic terms contained in the statement to confuse the General public;

International Gateway; Any facility through which voice, data and video can be exchange between domestic and international networks.

Sim Box; A mechanism where international calls are terminated as locals. Such mechanism allows the international calls to bypass the international gateway leading to loss of revenue to the state.

Common Platform; A single central platform for monitoring real time traffic of Telcos for revenue assurance.

Interconnect Clearing House (ICH); A centralized platform for local and international voice transit traffic to and from Telcos. Transit traffic refers to cross network traffic such as Mtn to Vodafone calls.

Restricted Tendering; it is a means which allows a procurement entity for reasons of economy and efficiency to engage a limited number of suppliers or contractors.

GVG; Global Voice Group (An international IT company) with alleged doubtful and dubious records.

Kelni; A local Ghanaian company registered in 2017 with little or no knowledge of ownership.

Revenue Assurance; a process or software solution that enables Communications Service Provider to capture revenue accurately for services rendered.

Tax Assurance; A process to ensure true tax figures are accurately reported as they should be.

CST; Communications Service Tax (6% Levy user or Supplier of Electronic Communications Service)

Connecting Entity; Communication Service Providers (CSP)such as MTN, TIGO, VODAFONE, GLO, ETC, determined by the NCA to be connected to the ICH

VAS providers; Value Added Service Providers such as videotext, teletext, tele-action etc

The Minister’s claim that $2.6 million was been paid Subah and Afriwave by NCA prior to her assuming office is incorrect and incongruous. It is on record that Subah’s Contract was terminated as far back as 2017 and no penny had been paid Subah ever since. The minister even alluded to several correspondences between Subah and the NCA regarding the termination and instructions to seize providing any service for the NCA.

Again, the contract of Afriwave had been amended as far back as 2017 leading to the cessation of payment to the entity. This implies that prior to the signing of the controversial Common Platform Monitoring (CMP) contract, No amount of many was been paid by the state.

It is therefore not true that an amount of $2.6 million was been paid on monthly basis before the introduction of KelniGVG into the equation.

Therefore the government started from zero cost to the state to $1.49m monthly payment to KelniGVG for no work done.

The reasonable question to ask is who has been monitoring the MNOs for the pass one year and how much revenue is lost to the state? No vender has been engaged in the past year and consequently no payment by government to justify any claim of savings. This fraudulent contract has rather committed the state to a monthly payment of $1.49 million monthly for ten years. It is sad to note that payment for the service which is yet to commence has already started in earnestwhere in the world can one imagine that a state will start payment for a contract that the contractor has failed to implement in accordance with the terms?

The statement of the minister further stated that the three previous attempts to implement Act 864 had not been successful due to non-compliance on the part of Mobile Network Operators (MNO). This statement by the minister is an admission that the inability of Subah and Afriwave to implement to the letter of Act 864 is not as a result of their failures but purely of the inability of the NCA and the Government to enforce its own regulation. How then do you justify the termination of the contract of the companies involved when you only just needed to enforce the laws of the state? The decision of the minister to bring in a different company with cloudy background and foreign in nature to replace Ghanaian companies in an attempt to address a problem of the regulator is either a mark of stupidity or fraud or both. The simple intelligent action would have been just to enforce the Law for the Ghanaian companies to effectively do live monitoring, but to decide to ignore enforcement but rather bring in a new company raises serious concerns. Note that the minister’s statement to parliament contained a warning to network service providers to comply with Act 864. This directive ought to have preceded the award of the contract to GVG. What we see is an award and payment for a contract the minister is well aware could not be implemented under the existing conditions and payments effected for same; if this does not constitute financial loss to the state what else could?

For the avoidance of doubt, Act 864 refers to the Communications Service Tax (Amendments) Act 2013, and it serves to ensure, amongst others, the establishment of Common Monitoring Platform (CMP) for the purpose of monitoring revenues accruing to GRA and NCA.

Another related and equally important Act is the Electronic Communications (Amendments) Act 2016, Act 910 which provides the legal basis for the ICH to maintain the capacity to connect and route national and international traffic to all Mobile Network Operators (MNOs).

In addition to Act 910, a Legislative Instrument (LI) 2234, 2016, Regulation 9(B) states that “a Connecting Entity (CE) shall connect to an ICH for transit of traffic”. By this regulation, all existing CE (MNOs & VAS providers) and also new CE must be connected to the ICH. The Electronic Communications (Amendments) Act 2016, Act 910 and LI 2234, 2016 is currently being violated by existing Connecting Entities and to my utter dismay, the ministerial directive to the network providers has ignored this equally important law.

In the minister’s address to parliament she stated, “This function currently is not operational…” in reference to the ICH. This discriminatory posture of the minister in respect of the two most important Acts, Act 864 and Act 910 further goes to support the view that personal and parochial interests are the drivers of this contract rather than National Interest.

The minister must equally direct all Network service providers to comply with Act 910. Is it that the minster and her cohorts do not have any personal interest in Afriwave that is making her overlook the violation of Act 910 but rather focusing on Act 864? Is the focus on Act 864 because it involves KelniGVG?

This view is also supported by the observation that when Subah and Afriwave contracts required just the enforcement of Act 864, no action was forthcoming from the minister but the moment the company changed to KelniGVG a renewed vim has been discovered by the ministry and NCA to push for the enforcement of Act 864. Citizens of the republic of Ghana can read in between the lines and draw conclusions.

Another interesting dimension emerged in the MOC press release on the 18th May 2018 in which the Minister of Communications, who is lawyer and ought to be conversant with the principle of a legal entity in company law, stated that the contract was awarded to a Ghanaian company in December 2017, duly registered under the laws of the Republic of Ghana called KelniGVG Limited. This was without a hyphen implying a single entity. But in her subsequent address to the Plenary of parliament on the 31/05/2018, KelniGVG Limited metamorphosed into Kelni-GVG as a joint venture. The question that arises is whether we are dealing with KelniGVG (Ghanaian company) or Kelni-GVG (a joint venture between Kelni and GVG SA). This duplicity serves to further confuse discerning Citizens and provides further support to the argument of dishonesty and deceit on the part of the minister and her allies.

Given that a statement to parliament is weightier than a press release, I will lean on the side of the parliamentary statement and accept that what is under discussion is a joint Venture Company. In the light of Article 181(5) of the constitution of Ghana and the Supreme Court ruling on the Balkan Energy case, the contract has all the ingredients of an international transaction and parliamentary approval is required.

We are all aware that no prior approval was sought and/or obtained in the award of this contract which shows that the contract is an illegality and should be declared null and void. It is in the business interest of the owners of the Joint Venture, if they exist, to insist on the right things to safeguard their investment if any. I know for a fact that the company will not take any action on this since a simple statement to clear their soiled image in the international and local media has not been issued talk less of a demanding appropriate legal processes.

Again, in the same press release also Minister stated, “up until now, there has not been any realtime capturing of traffic volumes either by GVG, Subah, or Afriwave Ghana Limited”. The reason for this state of affairs according Minister was lack of cooperation from the MNOs. This is clearly a problem of enforcement not new contract embarked by the MOC. The minister proceed to accuse Subah and Afriwave of been paid for no work done and conveniently shielded their newly found “baby” (GVG) which is being paid higher for doing equally nothing as we speak..

Another assertion by the minister in her address to parliament is;” this is not a duplication of any existing contract”. This is not factual because there would be about 20%-25% duplication of the ICH traffic if it goes live. The ICH is to provide a common platform for real time traffic for all OFF NET domestic and international (transit) traffic for all MNOs. This is just similar to the Mobile Money interoperability being implemented by the Bank of Ghana. That is why the CMP intends to monitor only OFF NET mobile money transactions to avoid duplication, but conveniently and/or ignorantly duplicates what the ICH is legally enjoined to implement. This duplicated data (20%-25%) could be available free to NCA and there is absolutely no need adding it the CMP contract.

Restricted Tendering;
Restricted tendering is a procurement method that limits the request for tenders to a select number of suppliers, contractors or service providers.

This method of procurement is also called: Limited Bidding and Selective Tendering. Although considered a competitive procurement method, competition is limited to only firms shortlisted or invited by the procuring entity.

A process should be in place for arriving at the number and specific firms that will be invited; that number however is dependent on the stipulations of the public procurement legal framework.

Any decision to use the Restricted Tendering procurement method must conform to the policies and procedures governing the procurement system.

Considering the above definition for restricted tendering, one would expect a transparent restricted tendering process to state the number of companies that were invited in the process and the scores of each bidder that led to the selection of KelniGVG. The minister again states before parliament that the company was selected through restricted tendering process without indicating other companies that were part of the process. The minister is enjoined to make known the other parties that were involved in the restricted tendering process or risked being described as a liar since all checks indicate that KelniGVG was handpicked because of the company’s relationship with highly placed persons within the Government.

Many other interested parties including a strong coalition of Civil Society Organisations have made valid observations that establishes that it makes little economic sense to invest about $174 million in pursuit of an additional revenue of less than $100 million.

Economic theory provides good reasons for state to rake in revenue in her contractual agreements with private companies. But the current contractual relation between the Government of Ghana and GVG and the implementation of its resultant policy is so structured to inure to the benefit of individuals rather than to the state. The legal and political background of the company involved in this deal requires serious scrutiny with a view to establishing the status of each partner in the proclaimed joint venture.

It is evident that when this deal was contemplated, stakeholders focused on personal gain rather than National interest. In the relationship between Government and the Electorate, it is expected that decisions will be taken to help promote prosperity of the electorate, however, most actions of the current government with particular reference to GVG deal are designed to impoverish the masses whilst enriching the elected few.

It is my sincere expectation that voices of reason both locally and globally will echo the cry of the masses as they wallow under excruciating poverty.

When one ponders over the matter within the context of George Orwell’s words that says “A people that elect corrupt politicians are not victims but accomplices.” one is left wondering who to put the blame on; the corrupt elected leadership or the masses.

A word to the wise is enough. Thanks for your time.

Dr. Mawia Zakaria
Executive Director
Institute of Social Research and Development