Tuesday, November 3, 2009

Zambia: Mwembeshi Earth Station to be part of Zamtel sale

By Chiwoyu Sinyangwe
Fri 23 Oct. 2009, MARAVI

MWEMBESHI earth station, the country's avenue to the International gateway, is set for privatisation as eight foreign firms eye Zamtel, Zambia Development Agency (ZDA) director general Andrew Chipwende disclosed yesterday.

And Chipwende has asserted that the sale of Zamtel is above government interference, playing down concerns by most Zambians that the controversial processes would be marred by irregularities and corrupt tendencies emanating from government influence.

The eight companies that have prequalified to participate in the purchase of between 51 per cent to 75 per cent of Zamtel included South Africa's Telkom, Africa's biggest fixed-line operator, a consortium of Libya's LAP Greencom and LAP Green Networks, two Indian state-run telecoms companies, Mahanagar Telephone Nigam (MTNL) and Bharat Sanchar Nigam Ltd.

Others are a consortium of Russia's second-biggest mobile phone operator Vimpelcom and Altimo, the telecoms arm of Russia's Alfa Group; a consortium of Egypt's Orascom Telecom and its subsidiary Telecel Globe; Angola's Unitel - a consortium of Unitel S.A and Angola Cables S.A; Portugal Telecom.
In an interview after ZDA officially announced the eight companies, Chipwende said all the assets of Zamtel would be sold.

He said the only property under the control of Zamtel which would be excluded from the privatisation process was the International Gateway as it was a regulatory issue controlled by the Communications Authority (CA).

“What we are selling are shares, which means all obligations and all assets and all liabilities of Zamtel remain with Zamtel,” Chipwende said. “Nothing is broken up…nothing is being broken up and all the assets…be, motor vehicles, if it's the satellites, optic fibre, the mobile operations, the fixed lines, the employees and everything remains with Zamtel. All contracts that they (Zamtel) have entered into…borrowings, remains with Zamtel. Nothing is being taken out.”
And Chipwende parried the widespread fears and misgivings that the privatisation of Zamtel was likely to be marred in gross irregularities, a semblance of what has happened with the post-privatisation era of Ghana Telecom.

The post-privatisation era of Ghana Telecom had been embroiled in politically-motivated mud-slinging and alleged corrupt activities with leaked reports accusing Vodafone of underpaying for its stake and the new government of John Atta Mills claiming that Ghanaian people did not get value for money.
But Chipwende claimed the privatisation of Zamtel would be done purely within the ZDA Act, devoid of government interference in the process where RP Capital of the Cayman Islands are the official transaction advisors.

“The ZDA board remains in charge of the process. They will select who will be the winning bidder, select who to enter into negotiations with. The law provides that ZDA board itself appoints the negotiating team,” Chipwende said. “There is nowhere in the Act where you find the mention of government. When the process has been negotiations, all we will do is to send final terms of negotiated to the Minister of Finance and again the ZDA Act is quite clear …it doesn't even say the Minister of Finance may sign or may not approve of what we have given to him. The law is very clear, it says the Minister of Finance' shall announce.”
Chipwende said ZDA had enough legal protection entrenched in the Act to shield the Agency from political interference.

“…I can confidently walk to the Minister of Finance's office with the final agreements after they have been approved by the Attorney General, of course, and order him to sign and he is going to sign because I have got the law to back me up,” Chipwende said. “The ZDA Act, in our case, we have a provision that requires us to publish in the government gazette the names and the prices of each and every bidder. And because people don't read gazette, we publish all the details in the press because people read the press.”

Chipwende also ZDA would announce the reason for the preferred company as required by law on the selection of the winning bidder.

“We don't have to justify why we rejected somebody but we have to justify why we selected a particular bidder and have that gazetted and announced as well,” said Chipwende. “So, it is a very transparent process that you are going to see and there are laws that provide for that. So, we are not too concerned with what is happening in other countries because if you look at the Zambian case, probably in terms of the legal and regulatory framework governing privatisation, it is among the best in the world.”

The long-planned privatisation of Zamtel has been criticised by opposition politicians, who say Zambians should hold a bigger stake in the company.
Zamtel's revenue for the year to end-December was US $100 million. It is Zambia's only licensed fixed-line provider of voice and data communications.