The Ministry of Information on December 22, 2015 threw caution to the wind and signed a working agreement with a Chinese firm Star Times Technologies Ltd ignoring its own task force disapproval to work with the firm, Weekend Nation can reveal.
The deal involves the Ministry of Information working together with Star Times Technologies to roll out the digital migration project for MBC radio and TV which has stalled twice.
Star Times chief executive officer Andy Wang confirmed to Weekend Nation before flying out to China on February 1 this month that the deal went through.
“Of course, we signed the documents, but I am not able to divulge more details at this point since I am at the airport leaving for China. I will be able to shed more light when I come back in two weeks,” he said.
Documents that Weekend Nation has seen show that a task force from the ministry earlier tasked to scrutinise the agreement questioned the financial viability of the deal which, among other things, will see the formation of a joint venture company between the Chinese company and Malawi Broadcasting Corporation (MBC).
A report the task force from the Ministry of Information prepared in 2015 after a visit to China by former Information minister Kondwani Nankhumwa and several senior officials from the ministry, Malawi Communications Regulatory Authority (Macra) and MBC was non-affirmative to the deal.
Reads the report in part: ‘‘Having considered several issues, it is hereby recommended that: Government should not enter into a Joint Venture arrangement with Star Times a subsidiary of Software Technologies Ltd as this seems to compromise the operations of MBC as a national broadcaster.
‘‘Star Times has received no kind words from some countries because of its failure to uphold agreements.’’
The firm is indeed present in Tanzania, Kenya and Rwanda, among other African countries, but its reputation is not good due to poor performance, according to the report.
The report also stated that there was a huge sense of dissatisfaction over the southern African region with regard to the company’s overall performance.
The task force also disapproved that the Malawi Government gets a loan for $132 million from Exim Bank of China to roll out the project.
Said the task force: ‘‘Additionally, the loan that Star Times wants Malawi to get benefits their company. The economic benefit of the proposed US$96.4 loan to be repaid in 25 years was not viable.’’
The task force also made a comparative analysis into the investment made by other local private television broadcasters who have gone digital at a much less investment.
It reasoned that the deal would mean that government would pay twice as much the value of the loan by the end of 25 years in which Star Times would be making $5.6 million in profits every year at the same time.
Terms of the loan say that it would be repaid over a period of 20 years with five years grace period at two percent which would be used for the digitalisation of the terminal products, the digitalisation of MBC and construction of Star-MBC base and a national TV and broadcasting transmission network that would have 15 transmission sites.
The team, therefore, implored the Malawi Government to channel its resources to support the efforts and initiatives of the Malawi Digital Broadcasting Network Limited (MDBNL) apart from assessing challenges at MBC to establish how much the State broadcaster requires in resource boost.
Star Times have also received bad press in Ghana where the government cancelled out a similar contract due to the failure by the company to secure funding from Exim Bank of China.
Information Minister Jappie Mhango did not respond to our questionnaire since Monday.
Malawi last year failed to fully migrate to Digital Terrestrial Television (DTT) due to, among other reasons, the inadequacy of equipment and personnel—where the country only registered 55 percent digital signal coverage.
The decision to migrate was made by the International Telecommunications Union in Geneva in 2006.