State House wants Zesco’s optical fibre network sold with Zamtel

State House wants Zesco’s optical fibre network sold with Zamtel
By George Chellah
Wed 28 Oct. 2009, 04:00 CAT

STATE House is exerting pressure on Zesco management to have the power utility company's optical fibre network, which was installed at the cost of about US $13 million sold as part of Zamtel assets.

President Rupiah Banda's son Henry introduced RP Capital to the government and RP Capital is currently the financial advisor in the privatisation of Zamtel.

Well-placed government sources yesterday disclosed that President Banda, through his two named advisors who include his legal advisor Joseph Jalasi, engaged Zesco over its optical fibre network.

“It appears this Zamtel and RP Capital Partners scandal is one that will never end. And it's clear that the architects of this saga are unrepentant and are determined to bring down a number of state institutions just to satisfy themselves.

Can you believe that right now as we are talking, Zesco's top management is under extreme pressure from State House to let go of their optical fibre network to enable these guys sell it together with Zamtel assets?” the source revealed.

“So far President Banda's advisors Jalasi and one of his colleagues from State House including Mr. Chipwende from ZDA have been on the Zesco management's door step over the same issue. The Zesco optical fibre network project is being done in phases at a huge cost. You may wish to know that in the first phase, Zesco laid its optical fibre network from Sesheke up to Lumwana in Solwezi at a cost of about US $13 million. This network is linked to the international gateway in Namibia.

“Therefore, it runs from Namibia into Sesheke up to Lumwana. The second phase is the one that is coming to cover the whole country and the projections are that this project is likely to gobble about US $30 million. So it's quite some costly and ambitious project and it's embarrassing to see State House being heavily involved and in the forefront to have such an installation sold together with Zamtel. Actually, RP Capital are even insisting that Zesco starts working on the second phase of this project.

They want to up the value of Zamtel by getting the Zesco network, which will automatically translate in an increase in their fees or commission when Zamtel is sold at a higher value.”

The sources disclosed that the Zamtel optical fibre network project flopped.
“One thing you also need to know is that the Communications Authority gave Zesco what is called 'A Carrier of Carriers' license in about 2006. But I think it only became operational in 2007,” the source said.

“Zamtel… the same company they want Zesco to give its optical fibre network tried to install its own network and they failed. They have even abandoned that project right now as we are talking.”

The sources said there was an ad hoc committee, which has been set up to deal with the issue of the Zesco network.

“The people that are in this committee include the acting Zesco managing director Cyprian Chitundu, energy permanent secretary Peter Mumba, a Mr Sakala from ZDA, a representative of RP Capital and a director from the Ministry of Energy among others,” the source said.

The source emphasised the importance of the Zesco network and listed some of its functions.

“It can act as a powerline carrier network, mobile (VHF and HF) radio network, private telephone network, microwave radio network and optical fibre network. And there are a number of local companies and mobile service providers that are using this network,” the source said.

When contacted for comment, State House special assistant to the President for legal, Joseph Jalasi responded: “No! No! I don't deal with those issues… am at the funeral.”

And Peter Mumba said the fact that he was sitting on the committee did not mean that he was planted by State House.

“No! That's not correct. How? The government has a vision and the vision is to move things forward. Of course, I worked for Post and Telecommunications Company (PTC) for 13 years and later on Zamtel.

I do appreciate the operations of the institution fairly well. And perhaps when the secretary to the Cabinet looked at my CV, he probably felt that I will be useful,” Mumba said. “The government took into consideration my vast experience and also I have been in government for some time now. So there is no truth in whatever they are saying.”

Asked about the intentions to get the Zesco optical fibre network to enhance the value of Zamtel, Mumba responded: “I have no idea about that.”

And according to a recent circular issued by Zamtel managing director Mukela Muyunda, Zamtel would implement retrenchments or redundancies.

“As part of this important partial privatization process and with permission from ZDA, management wishes to announce that Zamtel inevitably will be implementing conditional retrenchments/redundancies in line with the collective agreement. Zamtel management and the union entered into negotiations on 9th October 2009 relating to the redundancies/retrenchments.

I wish to announce that management and the union completed these negotiations on 22nd October 2009,” read Muyunda's circular No.6 of 2009 in part. “The agreed package for unionised members of staff is as follows; (a) three months pay for each year served, (b) two months pay for repatriation; and (c) one month pay in lieu of Notice.

Other details of these redundancies/retrenchments including the meaning of conditional redundancies/retrenchments will be shared with all staff as follows; (a) Following this circular, all directors, managers and supervisors will be provided with relevant details regarding the form and nature of the redundancies/retrenchments; (b) in the coming week, all directors, managers and supervisors will then share with their staff the relevant details regarding the form and nature of the redundancies/retrenchments; (c) the union will also play a critical role in information dissemination regarding this matter.”

He urged all Zamtel employees to acknowledge the effort of management and the union negotiating teams for coming up with a reasonable package under very challenging circumstances.

“All Zamtel employees should note that the redundancies/retrenchments are dependant upon the successful completion of the privatisation process. This being the case it is extremely important that all staff remain focused and work extremely hard to ensure a fluent and successful Zamtel privatisation,” Muyunda stated.

“Like was stated in circular No.4 it is still critically important to observe confidentiality throughout the process of privatisation. All information about Zamtel and the privatization of Zamtel to all external stakeholders will be issued by the Zambia Development Agency. Management will keep staff informed about this important process as it progresses.”