Zamtel sale ridiculous, says Kavindele

Zamtel sale ridiculous, says Kavindele
By Ndinawe Simpelwe
Sat 29 Oct. 2011, 14:00 CAT

ENOCH Kavindele says Zamtel was sold at a ridiculous low price. And Zesco officials have revealed that the MMD government forced management to sign an agreement with Zamtel for the use of the optic fibre to benefit new owners of the telecommunications company.

Making a submission to the inquiry set up to investigate the controversial sale of Zamtel's 75 per cent shares to LapGreen of Libya by Rupiah Banda's regime, Kavindele described the sale of 75 per cent shares of Zamtel to Lapgreen as ridiculous. Kavindele said the US$257 million paid for Zamtel was a giveaway price.

He said independent evaluations showed that the company was supposed to be sold for at least US$3 billion.

"US$257 million is what MTN paid to get a licence in Nigeria and how can you compare a licence to a whole company?" Kavindele asked.

He said the government broke four acts of parliament in the process of selling the telecommunications company.

Kavindele said the Zambia Development Agency (ZDA), the Citizens Economic Empowerment Commission (CEEC), the Information and Communication Technology and the competition and fair trading Acts were breached in the process by a statutory instrument number 111 of 2009.

The statutory instrument states that from November 11, 2009, there shall be no entry allowed in the provision of public telecommunications services including mobile services for five years.

"A statutory instrument cannot override laws that are made by parliament. But however for purposes of protecting it would only benefit Zamtel.

Mubembe said the Indefeasible Right of Use (IRU) contract was only set up to ensure that Zamtel derived full benefits from Zesco's resources.

He was making a submission to the inquiry set up by President Michael Sata to investigate the controversial sell of Zamtel to Lapgreen of Libya.

"The IRU contract was imposed on Zesco by Zamtel, some officials from ZDA and the government of Zambia and it was done under extreme pressure. There was an impression created that Zesco signed this agreement willingly. We did not sign this agreement willingly for various reasons," Mubembe said.

He said the terms of the IRU contract were very unfair to Zesco because it gave Zamtel all the advantages.

Mubembe said the contract allowed Zamtel to use Zesco's fiber without putting the latter into consideration.

"Zesco would be compelled under the contract to hand over all commercial customers to Zamtel. We currently have over 20 commercial customers and we are not allowed to carry out any commercial ventures on the optic fiber. The contract also allows Zamtel to keep 80 per cent of the earnings from the fibre and Zesco would only get 20 per cent," he said.

Mubembe further disclosed that the contract had no time frame but was in perpetuity.

He said Zesco was obligated to fund all future expansions of the fibre optic while Zamtel would not contribute anything.

Mubembe said the whole idea of the Zesco/Zamtel agreement was to empower the buyer.

"In one way they (Zamtel) are using taxpayers money from Zesco to run a private owned company. We feel that the agreement we were made to sign has been disadvantageous to Zesco and the Zambian people," he said.

Asked whether the agreement meant that Zesco was subsidizing a privately owned company, Mubembe said that was essentially the whole point.

Mubembe said Zesco signed the agreement under extreme duress.

And Zesco senior manager for legal services Mbile Wina Vukovic said the only solution was to walk away from the contract because it was not mutually beneficial.

Mbile said Zesco had a raw deal and was ready to terminate the contract.