Business

Shs43b at stake as procurement delays

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By FARIDAH KULABAKO

Posted  Monday, March 24   2014 at  02:00

In Summary

Slow. Telecom regulator delayed tendering process for firms.

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KAMPALA.
Delays in the Uganda Communications Commission (UCC) tendering process could cost the government Shs43 billion it had anticipated to get from the international call levy, Daily Monitor has learnt.
Although government tasked UCC to get a firm to provide technical solutions using the quality and revenue assurance system, a source who asked not to be named because of the sensitivity of the subject told this newspaper that that is yet to happen, barely three months to the end of the 2013/14 financial year.
The quality and revenue assurance monitors and accurately bills telecoms’ international call earnings to ensure that they (telecoms) pay the correct taxes.

International call levy
Government introduced a levy on all international incoming calls in the 2013/14 national budget where it hoped to raise about Shs43 billion in a move to raise more revenues to meet the tight resource envelope, currently at Shs13.1 trillion.
The quality and revenue assurance system was introduced because of allegations that telecoms were under declaring revenues from international calls, prompting the government to task UCC to seek services of an independent professional firm to monitor all telecoms’ international call revenues so that they are taxed accordingly.

Despite having been instructed to start the tendering process in time, it did not take off until November last year when UCC advertised, attracting bids from seven firms that included ZTE from China, Huawei Technology (China) Pro Logix (United Arabs Emirates), Voptecom (British Virgin Island), Global Voice Group (South Africa), Link Telecom (UAE) and Tel International.
The source, however, said all the seven firms were disqualified by the UCC procurement team on allegations of failure to meet the necessary criteria and requirements.

The telecommunications industry regulator re-advertised the tender in February and also asked the Public Procurement and Disposal of Public Assets Authority to relax the tight criteria for the tender since the process was behind schedule and government was losing money.

The bid notice attracted two additional firms that include Galaxtone from UAE and Delloitte Uganda, bringing the total number of received bids to nine.
UCC executive director Godfrey Mutabazi, however, said now that bids have already been received, the evaluation process will soon begin, hoping to complete it in a few months.

Calming fears that government is losing money, Mr Mutabazi said that even without a firm to monitor telecom companies’ international call earnings, government is already earning some revenue in form of excise duty from incoming international calls.

The Uganda Revenue Authority had no substantive comment about the matter as Mr Paul Kyeyune, the manager Public and Corporate Affairs said he couldn’t tell the impact the delayed tendering process would have on its collection targets at the moment.

three firms dropped
It has, however, emerged that three firms including Galaxtone, Voptecom and Global Voice Group have been disqualified for failing to provide security bid of $200,000 (about Shs499 billion) .

fkulabako@ug.nationmedia.com