Controversial Free Wi-Fi Contract: Former Minister NAPO and Successor Adutwum Under Scrutiny
Controversial Free Wi-Fi Contract: Former Minister NAPO and Successor Adutwum Under Scrutiny
Although Busy Internet appears not qualified to win a contract in Ghana, the then Minister of Education, Dr Matthew Opoku Prempeh, wrote to the PPA to approve a single source Wi-Fi contract of GHS84 million for it. This came with a monthly cost of GHS6.3m for maintenance. In May 2023 however, the current Minister of Education, Dr Yaw Osei Adutwum, wrote to the PPA to increase the monthly cost to GHS11.5m, citing inflation, VAT, and galloping exchange rate. The PPA also approved the contract transfer to another unqualified company, Lifted Logistics.
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Free Wi-Fi saga: How PPA approved GHS84m contract to an unqualified company
In 2018, Busy Internet was a company in dire straits. As an internet service provider, it competed against industry giants but achieved little success. Revenue had dipped, and liabilities were increasing along with staff discontent.
To cap it all, the company owed millions of cedis in unpaid taxes and social security contributions. At this point, when it seemed that the company was ripe for shutdown, it was announced to staff that Busy Internet had been acquired by a company called Lifted Logistics. A few weeks later, staff were even more amazed and delighted with another announcement that Busy Internet had won a major government contract to supply Wi-Fi services to secondary schools and offices of the Ghana Education Service throughout the country.
It was a contract Busy Internet was not eligible to even think about bidding for. With its huge tax liabilities and hefty arrears in unpaid social security contributions, the company could not have had tax and Social Security and National Insurance Trust (SSNIT) clearance certificates, which are mandatory requirements for any company bidding for a government contract. Despite these clear ineligibility, Busy Internet was not only able to secure a multi-million government contract; it was awarded the contract on a sole-sourcing arrangement.
“What I know for sure is that during that time we did not have a SSNIT clearance certificate neither did we have a GRA tax clearance certificate,” a former staff of Busy Internet, who has intimate knowledge of the contract but asked not to be named, told The Fourth Estate.
Following SSNIT’s legal proceedings against Busy Internet, the company drew a payment plan to clear all outstanding arrears from December 2018
Apart from those statutory requirements the company failed to meet, Busy Internet was not registered with the PPA as a supplier, contrary to the PPA’s procurement rules, according to searches conducted on the Public Procurement Authority’s (PPA) website.
The five-year contract was also awarded to Busy Internet without parliamentary approval as required by Ghana’s Public Financial Management Act.
“It was good news,” says a former employee of Busy Internet who wishes to remain anonymous for fear of victimisation. “At the end, we were all of this conviction that the MOE [Wi-Fi] contract was going to end the woes of Busy Internet. We were sinking as a company and salaries were not being paid.”
Horpe Omotayo-Ojo, CEO, Aguila Holdings, parent company of Busy Internet and Lifted Logistics
The Chief Executive of Aguila Holdings, which acquired Busy Internet, Horpe Omotayo-Ojo, in announcing the contract award to staff, also promised that their jobs were safe and every effort was going to be made to pay off Busy Internet’s debts and put it on the path to profitability. But that was not to be. Workers’ hopes were dashed and many laid off as the company started installing internet connectivity devices in senior high schools across the country.
Busy Internet was considered way more suitable beyond industry leaders, MTN, which had just been licensed to provide 4G internet services and Surfline Ghana Limited, another 4G internet service provider.
When The Fourth Estate asked why the government did not consider any of these companies for the contract, the Free Senior High School Coordinator, William Darkwa, said the big players were not interested in the project because they were wary of delays in receiving payments from the government.
But just after winning the contract, Busy Internet contracted MTN Ghana and AirtelTigo to provide the services it had contracted with the government to provide for secondary schools and education offices across the country.
Initially, the Wi-Fi system worked and the internet was available in some schools. Within a short period, however, the schools started losing connectivity one after another. The Fourth Estate visited 50 schools in 2023 to check if they were still connected to the internet. Out of the 50 schools, 48 of them had been without internet connection for several months. Most of them lamented that complaints to Busy Internet’s customer service unit had not been addressed, leaving them frustrated and angry. Our bid to further investigate why the schools had been disconnected raised more questions than answers, mostly about how an unqualified company was listed as a sole-source candidate for a government contract of such magnitude.
In the initial contract between Busy Internet and the Ministry of Education, the project cost was pegged at GHS84.4 million. The Education Ministry was also obliged to pay a monthly recurrent cost of GHS6.4 million for internet connectivity to the schools and educational offices.
The Wi-Fi for schools projects fulfilled a 2016 manifesto promise by the governing New Patriotic Party to collaborate “with the private sector [to] provide free Wi-Fi coverage for senior secondary and tertiary institutions nationwide, dedicated to learning, administration and enhancing the capacity to do research.”
The contract with Busy Internet resulted in the connection of over 1,000 institutions to the Internet as of February 2024.
The Fourth Estate’s investigations have revealed that though internet services to these schools and offices have been patchy at best, with many of them going without internet services for several months, the Ministry of Education paid GHS56 million, according to financial records submitted to Parliament, for internet services which were barely provided.
PPA approves Contract to unlicensed company, doubling of monthly charge
This new approval from the PPA pegs the monthly recurring cost of the contract at GHS11.5 million from an initial GHS 6.3 million
Further investigations revealed that the PPA in a letter dated 22nd May 2023 to the Ministry of Education, approved a request for a “change of company’s name from Busy Internet to Lifted Logistics Ghana.” At that time, however, Lifted Logistics was not even a licensed internet service provider, raising questions about how and why the PPA agreed to substitute the name “Busy Internet” in its records for “Lifted Logistics”, which only obtained a conditional ISP license in February 2024 – 10 months after the PPA approved the request for a change in the contractor’s name.
All these seemed like it was Busy Internet, now under the management of Aguila Holdings which had changed its name. But what was happening was that a new contractor (or company), without an ISP license, was taking over the project.
Though the Ministry of Education’s records submitted to parliament said they paid GHC56 million to Lifted Logistics in 2023, a leaked report by the Economic and Organised Crime Office suggests that between December 30, 2019, and December 19, 2022, the ministry paid GHC63.7 million to the company.
From its website, Lifted Logistics offers solutions for “project management, cybersecurity, banking and finance technology, and other technological solutions.” The company’s owner, Horpe Omotolayo-Ojo, a Nigerian, also owns a chain of businesses in Ghana.
When former employees raised concerns about Mr Omotolayo-Ojo’s attempt to transfer Busy Internet’s license to a different entity, the NCA responded in March 2023 that Busy Internet’s license “has not been transferred, [nor] reassigned.”
Mr Sarpong also said that sub-contracting an internet connectivity project to a company that was not even a registered internet service provider with the NCA makes the whole arrangement even more questionable
Procurement Consultant, Collins Agyemang Sarpong, says it may not be out of place to sub-contract part of a contract to another entity. But what is uncommon is that an entity like Busy Internet cannot give a contract it has won from the Ministry of Education to another company as appears to have happened with Lifted Logistics, until May 2023 when the PPA approved for Lifted Logistics to replace Busy Internet in the contract with the Ministry of Education.
Mr Sarpong also said that sub-contracting an internet connectivity project to a company that was not even a registered internet service provider with the NCA when the contract was purportedly transferred makes the whole arrangement even more questionable.
“If it is a joint venture and there is a new entity borne out of this joint venture, you need to have the mandatory requirements,” Mr Sarpong said. “There is a clause that if you are subcontracting any portion of this contract, you need to inform the principal so that due diligence is done on the subcontractor to check if everything of theirs is good.”
Increment
In the same letter approving the name (or contractor) change, the PPA approved an increase in the monthly recurring service charge from GHC6.5 million to GHS11.5million, almost doubling what the government was supposed to be paying for a service that was hardly ever being delivered.
The Fourth Estate contacted the PPA to find out why it approved a multi-million contract for an unqualified company and also approved a doubling of the monthly recurring costs, but we got no response from the authority.
Read more here: https://thefourthestategh.com/2024/06/10/free-wi-fi-rot-how-ppa-approved-ghs84m-contract-to-an-unqualified-company/
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