IMANI Alert: Afriwave’s ICT Licence FRAUDULENT

GHANA

When the Ministry of Communications announced the decision to introduce an Interconnect Clearing House platform, IMANI was one of the early sceptics. Documents available to IMANI have strongly vindicated our position.

On the 2^nd of December 2014, the National Communication Authority (NCA) invited applications for the grant of a license to enable service providers to establish, maintain and operate clearinghouse services in Ghana’s telecommunication industry.

The NCA claims that the Clearinghouse is aimed at providing a common platform for routing, switching, billing and settlement of interconnect traffic as well as other important services for both current and future operators in Ghana.

By the 17^th of December 2014, which was the deadline of the hurriedly arranged tender application process, a total of 5 applications had been received according to the Application Evaluation Panel (AEP) report. The applicants were: Afriwave Telecom Ghana Limited, Subah Infosolutions, Prodigy International Limited, TCMS-GVG Consortium Limited and Channel IT Ghana Limited.

The 8-member AEP (under the Chairmanship of Albert E. Enninful) submitted its report on the 29^th of January 2015, and it was promptly endorsed by the Chairman of the NCA, the next day, on the 30^th of January.

In fact, as is customary with such processes, no review of the Panel’s report was done by the NCA and the indecent haste in which the endorsement was issued clearly betrayed the scheme’s parochial intentions. But this was the least of the tender’s problems.

Below we list the factors that combined to produce the fraudulent outcome.

1. For such a complex undertaking, the 21 day timeframe used to review detailed technical and financial submissions from 5 companies competing to manage such a mission critical system as a monopoly interconnect clearing house system was not merely ridiculous, it was farcical.
2. The Evaluation Panel itself admit in its report that no pre-qualification was done. So in addition to the NCA never having reviewed the report of the Evaluation Panel, the panel also had no prior guidance whatsoever from the NCA’s technical staff to assist it in its work.
3. There were no visits whatsoever to any of the applicants’ operational locations or premises to ascertain their existing capacity.
4. There were no client references or testimonials of previous work done in the clearing and general telecom intermediation space. In fact, there were no references of any kind at all.
5. Some of the criteria were blunt instruments of no real relevance to the assessment. For instance, the Panel’s idea of preventing ‘conflict of interest’ was to penalise any applicant who may already have a license with the NCA without regard to the broad range of licenses issued by the NCA. How could someone with a radio broadcasting license for instance be conflicted in providing ICH services?
6. Now the real meat. The Panel manipulated its own scoring scheme to ensure that Afriwave came on top, regardless of the actual results, and they did so with a brazenness that is almost farcical.
7. Afriwave was awarded 5 marks in a section where the total available marks were ‘1’. This is the part where the applicants were to show that their ‘operational support team’ for the planned undertaking is up to scratch by presenting their CVs.
8. This is on top of the fact that Subah having won all the two points available in the ‘Project Implementation Team’ subscore, compared to Afriwave’s score of 1, it was highly irregular for Afriwave to have been declared as having a superior ‘operational support team’ given how interlinked the two requirements are.
9. It is weird that the panel purported to evaluate the company’s ‘Switch and Routing Platform’ and Fraud Management System, when Afriwave to date has been involved solely in the mast erection space. Which Switch, Routing and Anti-Fraud systems exactly were reviewed? Our understanding is that this evaluation was carried out on diagrams submitted by the parties.
10. Despite the ‘equipment identity register’ subscore having a maximum score of 1, Afriwave was awarded 4 marks against Subah’s 1.
11. Despite evidence of Telco Interconnections having a maximum subscore of 2, Afriwave was awarded 4 marks.
12. Despite ‘topology scalability’ having a maximum subscore of 1, Afriwave was awarded 2 marks.
13. Likewise, the requirement to provide a critical bill of quantity could only be scored a maximum of 1, yet, here too, Afriwave was given 2 marks.
14. Afriwave was thus given as much as 11 extra points for technical performance it could not have demonstrated, as the ratings were above the maximum allowed. I.e. the scoring was a mathematical impossibility.
15. If these strangely awarded points are subtracted from Afriwave’s actual score, it should obtain 67.2 points, and not 78.2 points, and consequently should have lost out to Subah in the tender.

That this whole process was rigged to guarantee a perverted outcome can be seen from the remarks of the panel in various parts of the report. In various comments, as if to pre-empt future investigations and dodge blame, the panel laments the low quality of the submissions. It nevertheless went ahead not only to manipulate the raw scores to enable Afriwave to emerge as the winner of the bid but also to recommend the granting of a monopoly license to the same company.

Interestingly, all eight members of the AEP were asked to sign a Non-Disclosure Agreement covering the evaluation of the applications for the NCA.  This elicited howls of protest from the likes of Occupy Ghana and IMANI President Franklin Cudjoe who described the entire process as “political” and “illegal” since the process had the benefit neither of transparency, nor of stakeholder buy-in.

The evidence below substantiates and justifies these concerns.

Analysis of the AEP report

A summary of the findings above is presented in the table below.

Table 1                  EVALUATION OF TECHNICAL CAPABILITIES OF THE APPLICANTS

Source: Application Evaluation Panel (AEP) Report

Table 1 clearly demonstrates that whereas Subah’s scores were consistent with the maximum attainable, Afriwave’s scores exceeded the maximum possible for the mentioned criteria. Assuming that Afriwave had the maximum attainable for the criteria in Table 1, it should attain a total score of 6. Rather it obtained an additional 11 points culminating in a total of 17 points. Thus, subtracting the fictitious 11 points from the total score of 78.2 reported for Afriwave Telecom Ghana Limited leaves the final score at 67.2, which is lower than the reported score of 72.7 for Subah Infosolutions.

There are many other questions which come up at this stage.

A few are:

• In view of the committee’s claim of insufficiency of information for making informed judgements about the financials of most of the tenders, what informed the total points awarded under debt and equity?
• With a score of 0 on equity, how did Afriwave score more than 75% of the points available on debt equity ratio?
• Why was the final report of the committee not vetted by the NCA for accuracy and consistency of the computations and conclusions arrived at?
• What could have been the sufficient financial information requested, that bidders couldn’t provide, given the experience and record of the business entities?

Conclusion & Way Forward

Now that there is ample documentary evidence of fraudulent manipulation of the tender results, IMANI feels highly justified in resurrecting its campaign against the current ICH policy, and to reiterate its two demands:

1. There is completely no basis to impose a monopoly clearinghouse on the telecom industry. The Ministry should re-open the tender and provide adequate time for best practices to be followed in the evaluation of bids. It should then award three licenses for providers of interconnect clearance house services.
2. The telecom industry should then be free to decide which clearinghouse provider to patronise and whether to patronise any at all, at least for the next 5 years whilst the clearinghouses build track record and capacity.

These two approaches are consistent with the goals of ensuring maximum redundancy in the network, eliminating bottlenecks, enhancing resilience, and promoting efficiency and excellence. Furthermore, it will enable the private sector to conduct due diligence on providers of such services and verify their accreditations and certifications to ensure compliance with international standards.

Foisting untested monopolies on the private sector shall add little value and destroy a vital industry.

The President and the Minister of Communications should act NOW to redeem the credibility of this whole process!

This ‘alert’ was brought to you by IMANI: The Center for Policy & Education