The Federal Government has conceded the $470million National Public Security Communication Systems (NPSCS) of the Nigeria Police to a private firm, in what appears to be a threat to national security.
The concession is also believed to be in contradiction of the recommendation of an inter-ministerial panel set up by government itself, sources knowledgeable about the deal said yesterday.
The six-man panel comprising Police Affairs Minister Jelili Adesiyan and Communication Minister Omobola Johnson, it was gathered, had opposed any such concession on the ground that it would compromise national security.
The panel was set up by Vice- President Namadi Sambo.
The concession to Messrs. Openskys Services Limited is also unlikely to go down well with the Chinese government which provided the bulk of the funds for the project through the China Export-Import (EXIM) Bank. Investigation revealed that the concession was made without input from the Bureau of Public Enterprises (BPE) and the Federal Executive Council (FEC).
The conveyance of concession was contained in a letter to the Managing Director of Openskys Services Limited by the Permanent Secretary, Ministry of Police Affairs, Dr. James N. Obiegbu in which he conveyed “ the approval of His Excellency, Mr. President and Commander-In-Chief of the Armed Forces, Dr Goodluck Ebele Jonathan, GCFR for your company Messrs. Nigeria Satellite Communications (NigComSat) to partner and form a Special Purpose Vehicle (SPV) that will operationalize and commercialize the National Public Security Communications System (NPSCS) network of the Nigeria Police Force.” Details of the deal, according to Dr. Obiegbu, are:
•the Equity of the SPV shall be held at the ratio of 82% by OpenSkys Services Ltd and 18% by the Federal Government;
•the Federal Government’s investment in the Project so far is to constitute the 18% Equity of Government;
•upon its formation, the SPV shall assume the assets and agreed liabilities of the Federal Government in the project, except the reimbursement of Messr. ZTE Corporation in respect of cost incurred in the maintenance of the network prior to this take-over;
•the Government is not making any further investment in the network while the SPV shall undertake the repayment of the agreed portion of the China EXIM Bank liabilities through the Federal Ministry of Finance. A copy of the Financing Agreement containing the repayment schedule is herewith attached;
•consequent upon the above, the SPV will be required to execute a Memorandum of Understanding (MoU) with the Federal Ministry of Finance and the Ministry of Police Affairs on the repayment of the agreed portion of the loan obligation; and
•the Nigerian Police Force shall operate on the network using the 500,000 subscriber lines at no extra cost to Government.
It is expected that government will hand over the assets and agreed liabilities of the NPSCS to Messrs. Openskys Services Limited once it avails the authorities with the details of the SPV.
Of the US$470million spent on the project the Federal Government contributed $85million (15%) through the Ministry of Police Affairs, while the balance of $399.5m (85%) came from a concessionary off-shore long term loan facility from China Export-Import (EXIM) Bank. The project was certified substantially completed by the Nigeria Police in December, 2012.
Upon the completion, NigComSat entered into a Memorandum of Understanding (MoU) with the Ministries of Finance and Police Affairs on December 18, 2012 to “partner in the implementation of the NPSCS and the commercialization of the excess capacity on the network in order to repay the USD399.5m China Exim Bank credit facility and support the sustainability of the network.”
It was learnt that dispute over the sharing of the same 450 MH7 frequency with OpenSkys and the non-provision of the take-off funds had hampered the operational deployment of the NPSCS. While the nation was sourcing for funds, the Technical Contractor, ZTE operated the system up to December, 2013 at the cost of N3.2 billion.
But since 2013, the system has been “largely underutilized which has been the source of concern, especially in the face of the present security challenges.”
It was gathered that the government was faced with three options including a joint venture between NigComSat Ltd and OpenSkys Services; sourcing funds to sustain NPSCS; and outright sale which was considered dangerous.
There had been tension in government over the fate of the NPSCS. But the six-man Inter-Ministerial Panel, raised by Vice President Namadi Sambo, rejected proposal to sell or concession the nation’s security network.
Members of the panel apart from Adesiyan and Johnson were Mr. Obiegbu (Permanent Secretary, Ministry of Police Affairs); Mr. Abba Kassim (Senior Special Assistant, Research and Statistics, Office of the Vice President); Ms. Abimbola Alale (Managing Director, NigComsat) and Mrs. Nuratu Batagarawa (Director, Police Services, Ministry of Police Affairs).
The committee, in its report, was of the view that “The NPSCS network is viable as the Central Bank of Nigeria has expressed the desire to roll its nationwide cashless policy thereon for a fee and additionally some security agencies have expressed interest to operate on the network.
“The operation take-off fund required by Messrs NigComSat Limited could be sourced from the funds for the Nigeria Police Force Reform Programme and in respect of which a provision should be made from the 2014 funds.
“In the light of the above, the meeting is of the view that greater value for money outcome would be achieved by raising the required take-off funding for Messrs NigComSat Limited to run and operate the network rather than its outright sale to a third party to whom payment for the use of the services there from would again be made (round tripping).
“Accordingly, the Interim Implementation Committee on Police Reform Programme is requested to consider providing the required take-off funding for the project.”
The panel said the proposal by Messrs Openskys Services Limited (OSL) “to absorb the NPSCS, a network ab initio dedicated to national security service, to provide for an independent, private and secure communication platform for the police and other security agencies is considered to be a compromise.
“Messrs OSL only proposed to absorb funds expended by the Federal Government subject to its own assets valuation. Hence the obligation to pay the balance of the EXIMBank loan will again fall on government.
“The National Telecommunications and Industrial Policies specifically preclude foreign companies’ participation in telecommunication matters relating to defence and security of the nation. Accordingly, the proposal of Messrs Openskys Services Limited (OSL) with heavy foreign participation would also appear a compromise of the policy.
“A colossal resource of the Nigeria Police Force was committed to the implementation of the NPSCS project. Hence the proposal which now requires annual payment for the use of the same network by the Nigeria Police Force will indeed disadvantage the Force.
“That in consideration of overriding national interest, the approval granted Messrs OSL for the 450MHz Frequency Band ‘A’ be withdrawn at no cost to and assigned to the NPSCS project. “That consequent upon above, Messrs OSL should be migrated to Band ‘L’ of the 450MHz Band to deploy its network.”
The concession is also believed to be in contradiction of the recommendation of an inter-ministerial panel set up by government itself, sources knowledgeable about the deal said yesterday.
The six-man panel comprising Police Affairs Minister Jelili Adesiyan and Communication Minister Omobola Johnson, it was gathered, had opposed any such concession on the ground that it would compromise national security.
The panel was set up by Vice- President Namadi Sambo.
The concession to Messrs. Openskys Services Limited is also unlikely to go down well with the Chinese government which provided the bulk of the funds for the project through the China Export-Import (EXIM) Bank. Investigation revealed that the concession was made without input from the Bureau of Public Enterprises (BPE) and the Federal Executive Council (FEC).
The conveyance of concession was contained in a letter to the Managing Director of Openskys Services Limited by the Permanent Secretary, Ministry of Police Affairs, Dr. James N. Obiegbu in which he conveyed “ the approval of His Excellency, Mr. President and Commander-In-Chief of the Armed Forces, Dr Goodluck Ebele Jonathan, GCFR for your company Messrs. Nigeria Satellite Communications (NigComSat) to partner and form a Special Purpose Vehicle (SPV) that will operationalize and commercialize the National Public Security Communications System (NPSCS) network of the Nigeria Police Force.” Details of the deal, according to Dr. Obiegbu, are:
•the Equity of the SPV shall be held at the ratio of 82% by OpenSkys Services Ltd and 18% by the Federal Government;
•the Federal Government’s investment in the Project so far is to constitute the 18% Equity of Government;
•upon its formation, the SPV shall assume the assets and agreed liabilities of the Federal Government in the project, except the reimbursement of Messr. ZTE Corporation in respect of cost incurred in the maintenance of the network prior to this take-over;
•the Government is not making any further investment in the network while the SPV shall undertake the repayment of the agreed portion of the China EXIM Bank liabilities through the Federal Ministry of Finance. A copy of the Financing Agreement containing the repayment schedule is herewith attached;
•consequent upon the above, the SPV will be required to execute a Memorandum of Understanding (MoU) with the Federal Ministry of Finance and the Ministry of Police Affairs on the repayment of the agreed portion of the loan obligation; and
•the Nigerian Police Force shall operate on the network using the 500,000 subscriber lines at no extra cost to Government.
It is expected that government will hand over the assets and agreed liabilities of the NPSCS to Messrs. Openskys Services Limited once it avails the authorities with the details of the SPV.
Of the US$470million spent on the project the Federal Government contributed $85million (15%) through the Ministry of Police Affairs, while the balance of $399.5m (85%) came from a concessionary off-shore long term loan facility from China Export-Import (EXIM) Bank. The project was certified substantially completed by the Nigeria Police in December, 2012.
It was learnt that dispute over the sharing of the same 450 MH7 frequency with OpenSkys and the non-provision of the take-off funds had hampered the operational deployment of the NPSCS. While the nation was sourcing for funds, the Technical Contractor, ZTE operated the system up to December, 2013 at the cost of N3.2 billion.
But since 2013, the system has been “largely underutilized which has been the source of concern, especially in the face of the present security challenges.”
It was gathered that the government was faced with three options including a joint venture between NigComSat Ltd and OpenSkys Services; sourcing funds to sustain NPSCS; and outright sale which was considered dangerous.
There had been tension in government over the fate of the NPSCS. But the six-man Inter-Ministerial Panel, raised by Vice President Namadi Sambo, rejected proposal to sell or concession the nation’s security network.
Members of the panel apart from Adesiyan and Johnson were Mr. Obiegbu (Permanent Secretary, Ministry of Police Affairs); Mr. Abba Kassim (Senior Special Assistant, Research and Statistics, Office of the Vice President); Ms. Abimbola Alale (Managing Director, NigComsat) and Mrs. Nuratu Batagarawa (Director, Police Services, Ministry of Police Affairs).
The committee, in its report, was of the view that “The NPSCS network is viable as the Central Bank of Nigeria has expressed the desire to roll its nationwide cashless policy thereon for a fee and additionally some security agencies have expressed interest to operate on the network.
“The operation take-off fund required by Messrs NigComSat Limited could be sourced from the funds for the Nigeria Police Force Reform Programme and in respect of which a provision should be made from the 2014 funds.
“In the light of the above, the meeting is of the view that greater value for money outcome would be achieved by raising the required take-off funding for Messrs NigComSat Limited to run and operate the network rather than its outright sale to a third party to whom payment for the use of the services there from would again be made (round tripping).
“Accordingly, the Interim Implementation Committee on Police Reform Programme is requested to consider providing the required take-off funding for the project.”
The panel said the proposal by Messrs Openskys Services Limited (OSL) “to absorb the NPSCS, a network ab initio dedicated to national security service, to provide for an independent, private and secure communication platform for the police and other security agencies is considered to be a compromise.
“Messrs OSL only proposed to absorb funds expended by the Federal Government subject to its own assets valuation. Hence the obligation to pay the balance of the EXIMBank loan will again fall on government.
“The National Telecommunications and Industrial Policies specifically preclude foreign companies’ participation in telecommunication matters relating to defence and security of the nation. Accordingly, the proposal of Messrs Openskys Services Limited (OSL) with heavy foreign participation would also appear a compromise of the policy.
“A colossal resource of the Nigeria Police Force was committed to the implementation of the NPSCS project. Hence the proposal which now requires annual payment for the use of the same network by the Nigeria Police Force will indeed disadvantage the Force.
“That in consideration of overriding national interest, the approval granted Messrs OSL for the 450MHz Frequency Band ‘A’ be withdrawn at no cost to and assigned to the NPSCS project. “That consequent upon above, Messrs OSL should be migrated to Band ‘L’ of the 450MHz Band to deploy its network.”
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