Last week, we began a discussion of the Government’s ICT programme which effectively commenced in 2010. There are three major components, namely: (a) the laying of 560 kilometers of fibre optic cables from Georgetown to Lethem; (b) the installation of the wireless and terrestrial network system from Moleson Creek to Anna Regina; and (c) the acquisition and distribution of 90,000 laptops to families in need of them. These components are interconnected since the objective is for high-speed internet access to flow from Brazil via the fibre optic cables and distributed along the coast through the network. This is to facilitate, among others, connectivity with government offices as well as with the laptops that would have been distributed. As stated by the former President in 2010, the intention was not to compete with GT&T which at the time was launching its own fibre optic cable out of Suriname and Trinidad.
The entire funding of $13.827 billion for the programme, equivalent to US$69.133 million, would have been exhausted as at 31 December 2014. However, there is no connectivity out of Brazil and therefore the objective of advancing “fully into e-government mode, hooking up our schools and our hospitals and our police stations and everything else so that we can deploy technology in the service of our people”, has not been achieved. Media reports have indicated that the laying of the terrestrial fibre optic cables encountered several problems because of the terrain and the type of soil along the Linden-Lethem road as well as allegations of substandard work performed by local contractors.
In February 2014, the Prime Minister acknowledged that there was improper handling and installation of the cables that led to some amount of damage in addition to problems encountered as a result of the construction works on the East Bank Demerara road. He, however, did not mention the role of those responsible for overseeing the implementation of the project on behalf of the Government, and hence the taxpayers. Should they not also be held to account for this costly failure? The Prime Minister indicated that an independent third party expert was requested to review the decision to lay the cables along the Linden-Lethem road. One could logically ask: Why was this not done before the works commenced, and was it not a case of placing the cart before the horse?
The Prime Minister also stated that the project was using local contractors and that since this was the first project of its kind for Guyana, it has encountered some challenges. The decision to use contractors with little or no experience in laying fibre optic cables is an unfortunate one and indeed a costly mistake, considering the delicate nature of these cables and the huge expenditure involved. Another consideration is whether the correct specifications of the cables and related equipment were acquired and used in the project and whether international competitive procedures were followed to ensure that the best value for money was achieved from these acquisitions. We were told that the National Procurement and Tender Administration Board (NPTAB) was handling the matter, but this is all the information that is publicly available. How independent is the NPTAB when the Minister of Finance has wide discretionary powers in relation to the appointment of its members? The NPTAB also has a reporting relationship with the Minister.
We are now not only left with a non-functioning system but also a large debt burden for future generations to repay. Some US$32.8 million was borrowed from the China Export Import Bank to be repaid over a 15-year period commencing 2017. Any remedial work on the fibre optic cables is likely to consume significant financial resources, whether by way of an additional loan or central government financing. A thorough review and analysis will therefore have to be carried out to assess whether it is economically feasible to salvage the project, perhaps in some reformulated way.
Acquisition of laptops
According to the Auditor General, amounts totalling $1.558 billion were expended in 2011 in the acquisition of 27,000 laptops, and as at September 2012, 9,133 laptops were still on hand while 103 were reported stolen. This suggests that 17,764 laptops were distributed. In 2012, the Auditor General reported that an amount of $1.252 billion was expended on the acquisition of another 27,000 laptops. At the time of the audit in July 2013, 4,149 were distributed. However, 2,649 were damaged while 2,011 were returned to the supplier due to defects. This gives a balance of 18,191 laptops in stock. The report, however, made no reference to the balance of 9,133 laptops on the earlier shipment. It is also not clear what action was taken in relation to the damaged computers and whether the defective laptops were replaced.
In his budget speech for 2013, the Minister stated that in 2012, $1.6 billion was spent for the acquisition of 28,000 laptops resulting in a total of 56,000 laptops, compared with 54,000 reported by the Auditor General. In addition, according to the Auditor General, 21,893 laptops were distributed as of July 2013 whereas the Minister’s statement indicated that as of March 2013, 26,832 laptops were distributed. Obviously, a lesser number of laptops could not have been issued three months later! These discrepancies need to be resolved.
The 2013 Auditor General’s report is not yet publicly available because of the prorogation of Parliament. However, according to the Minister’s budget presentation, the sum of $2 billion was provided in 2013 for the acquisition of 34,000 laptops. Using the Minister’s figure, this will complete the acquisition of 90,000 laptops at a cost of $5.2 billion or US$26 million, or US$289 per laptop. We, however, have no idea about make and technical specifications of these laptops to ascertain the reasonableness of the price paid. Recently, I bought a Lenovo Think Pad X140e with all the latest features for just US$260 while a Dell New Inspiron 15 laptop currently goes for US$249.
In his 2014 budget presentation, the Minister stated that 9,050 laptops were distributed in 2013 resulting in a total distribution as of March 2014 of 35,884 laptops. Therefore, as of this date, 54,116 laptops were still in stock, which implies that 20,116 laptops relating to the acquisitions made in 2012 were still to be distributed. The undue delay in distributing the laptops could result in deterioration due to possible improper storage; the risk of further theft; and the possibility of the laptops becoming outdated.
The Minister also stated that the One Laptop Per Family initiative would be re-launched and re-invigorated and that an amount of $2 billion was allocated in 2014 for the acquisition of a third batch of laptops, of which 17,948 were scheduled to be distributed in 2014. Using a unit cost of US$289, a total of 124,602 laptops would have been acquired as at 31 December 2014 at a cost of $7.2 billion, equivalent to US$36 million.
It would have been more appropriate if the laptops had been purchased after a fully functional network system is in place. However, political expediency over sound managerial decision-making took precedence in the run up to the November 2011 elections. We are now in 2015, and most probably the laptops would have been purchased based on a contract entered into in 2011. Those acquired in 2011 and 2012 would have been three years old and may need to be replaced. Many are still to be distributed. Without a functional network system, recipients of the laptops would have been forced to acquire the expensive services of commercial internet service providers, which was precisely what the Government’s ICT programme was seeking to avoid.
The way forward
In view of the various concerns expressed in this and last week’s articles, I believe that whenever it reconvenes, the National Assembly should request that the Government’s ICT programme be placed on hold until such time that both a forensic audit and a value-for-money assessment are carried out and the results made available. The former is to ascertain whether any financial impropriety has taken place. The latter is to assess the extent to which; (a) the financial resources made available to the programme have been utilized in an economical, efficient and effective manner; and (b) actual outputs, outcomes and impact are commensurate with those intended.
It is public knowledge that the Audit Office has neither the capacity not the competence to undertake these highly skilled assignments. It also lacks the desired degree of independence from the Executive, free of government interference. In the circumstances, the Public Accounts Committee should request the Auditor General to contract out these assignments based on a system of international tendering, and the related reports tabled in the National Assembly. Only then should a decision be made about the future of the Government’s ICT programme.
