When I joined the Ministry of Information and Communications, there was an initiative to provide high-speed connectivity and lower the cost of accessing the Internet by linking East Africa to the rest of the world through a fiber optic cable. More significantly, the cable was expected to bring closer the dream of having universal broadband connectivity.
For six years, the 22-country project had remained at the planning stage. The amount of money countries had spent in meetings almost surpassed the actual cost of building the infrastructure. Clearly, some of the countries were resistant to the project.
Ultimately, after numerous discussions, it became clear that forging ahead with the project successfully was going to require a unilateral approach. Our Ministry decided to abandon the regional initiative in favour of a Kenyan-led project—a difficult decision to make in light of the politics (local and regional) as well as the vested interests.
The long process from multilateralism to unilateralism started with convincing of our minister, Mutahi Kagwe, of the need to abandon the common initiative, which was characterized by political machinations. Next, the minister convinced the then-Minister for Finance, Amos Kimunya. Three of us met with the president and convinced him that the decision we had taken was good for the country. Within three days, we developed a temporary policy document and a cabinet memorandum (the first step in any policymaking in Kenya).
We then sought the direct intervention of President Kibaki, who, having concurred with our assessment, agreed to search quickly for a partnership to develop an alternative to the regional initiative.
We faced a policy challenge. In 2008, Kenya did not have a policy to govern public–private partnerships. Yet, such a policy was necessary to convince stakeholders that Kenya would lead the project. To save time, we proceeded to get Etisalat Telecommunications Corporation in the United Arab Emirates as a junior partner (15 %). Once we had secured this initial deal, we came back and mobilized local operators to invest in the remaining 85 % of the project. I was sure to modify the original cabinet memo to reflect the partnerships.
Once more we approached the president, and his intervention enabled us to obtain financial allocation from the government for the initial investments in the TEAMS project. To fast-track the project through the rigid procurement procedures, I had incorporated a provision in the cabinet memo allowing for the creation of a steering committee.
This committee included Esther Koimett, the investment secretary who in Kenya is responsible for overseeing government investments and public enterprise, John Waweru (representing the Communication Commission of Kenya [CCK], the telecommunications regulator), and Robert Hunja (director-general of the Public Procurement Oversight Authority, the entity that oversees public procurement in Kenya). The committee also included Samuel Kirui (the then-CEO of Telkom Kenya).
With this team mobilized, we quickly developed a memorandum of understanding with Etisalat of United Arab Emirates and sought price quotations to survey the cable route from the two principal global operators, Tyco and Alcatel. Tyco won the USD3 million and immediately started work. Tyco’s timely implementation of the project won the confidence of the local operators that we wanted to partner with.
Ordinarily, tenders of such magnitude are published internationally for a period of 28 days, and the whole procurement process can take up to six months. It took us one month. Director General Hunja, seconded by the World Bank to the Kenya government, quickly understood the project’s benefits and appreciated our high level of commitment. A forward-looking Hunja guided the committee in navigating through the 2005 Procurement Act, Kenya’s newly launched procurement law.
There were still policy challenges around this public–private partnership project. To calm investors, I created a board consisting of all of those who had expressed interest in being part of the process—largely local telecommunication companies. And with that TEAMS was born. The TEAMS board created an escrow account to use as a vehicle to mobilize the resources required to build the cable. This enabled us to proceed with the tender to construct the cable. Technically, TEAMS was a government outfit that was subject to procurement rules, but the project was new, and some of the procurement processes of building undersea cables had not been anticipated in our laws. This forced us to rely on the United Arab Emirates’ procurement processes as per agreement with Etisalat and eventually with Alcatel, which became the contractor.
The process moved at a remarkable speed, but not without challenges. By the time the local media were beginning to question the logic of abandoning a regional initiative, we were close to starting the actual construction. We encountered hostile media. Around that time, the government had introduced a Media Bill requiring self-regulation of the media industry. Because the media perceived it as an attempt by the state to control media, we concluded that this was main reason for the media hostility.
In addition, the Eastern Africa Submarine Cable System, the regional cable we had abandoned, and another private initiative put pressure on us to abandon the initiative. The media accused us of flouting procurement rules. This prompted the Ethics and Anti-Corruption Commission, the African Center for Open Governance (Africog), the Efficiency Monitoring Unit, the auditor general’s office, and a host of other civil society investigative agencies to start probing the project.
Adding to the challenges was the post-election violence in Kenya after the disputed presidential elections of 2007. From my 11th-floor office at Teleposta Towers, I watched anti-riot police patrol Nairobi’s streets. The project contractor, Alcatel, wanted legal and financial guarantees in order to start the work. And Parliament, which approves such guarantees, was not in session.
I consulted Joseph Kinyua, my counterpart at the Treasury Department and an optimist like me who shared the dream of bringing ICT to Kenya. He suggested that I approach the CCK, the then industry regulator, or Kenya’s biggest telcom, Safaricom. Both these entities had the financial capability to provide a guarantee.
Michael Joseph, Safaricom’s CEO at the time, was sympathetic to my request but said it would require Safaricom board approval. I concluded that selling the idea to the Safaricom board would be a tall order and decided to pursue other means. I approached John Waweru, the director-general of CCK. Here too we needed board approval. I pushed the agenda through, because I was a board member at CCK. That evening, I lobbied the board members one by one, and by the time the board met, I had sufficient support, and they approved the provision of the guarantee. This did not go down well with Patrick Musimba (now the member of Parliament for Kibwezi) who, shortly thereafter, resigned from his board position. Permanent Secretary Kinyua then gave confirmation to CCK’s bankers about the deal, Citibank, which needed confirmation from the Treasury before it could give the guarantee.
We secured the guarantee a few days before the March 2008 signing of the National Peace Accord, which brought peace to Kenya, and within days Alcatel moved ships to the United Arab Emirates to begin laying cable.
At the time, many political changes were occurring. My very supportive minister, Mutahi Kagwe, had lost the local election. Unlike today, under Kenya’s old constitution this meant that he could not be appointed as a cabinet minister. President Kibaki appointed Samuel Poghisio as the new minister and retained me in the same position as permanent secretary. The new minister, Samuel Poghisio, was a former university teacher like me, and we developed a good working relationship.
Criticism against the project was unrelenting. More than seven different investigative agencies demanded information. The majority of the investigators had little knowledge of the undersea fiber optic cable. One investigator demanded, “Do you really think the entire country is foolish enough to believe that a 5000 kilometer wire can be laid under the sea?” Africog had hired expert investigators whose sound and objective analysis was invaluable in helping us explain the project. I convened a press conference and stated that I would take full responsibility for any impropriety in the project. This reassured the public, but it is noteworthy that we spent close to USD1 million dollars making copies of everything, including thousands of A2-size marine survey documents for transmission to the phalanx of investigators.
Just as we were beginning to see progress, the Privatization Commission was created to provide a legal framework for public–private partnerships and other privatization projects. TEAMS had been a shell company registered as a government entity, which came with a number of repercussions. In order to meet the tight deadlines of the commission, we had to allocate shares to investors. This meant hiring an accounting firm to value the “assets,” a highly bureaucratic task. The investors grew agitated as I argued that the law could not be applied retrospectively while maintaining that it was useless to bring in an accounting firm when we had been making payments through a jointly owned escrow account, of which all members of the consortia were signatories. Fortunately, some commissioners began to understand my case. The chairman of the Commission was a professor of economics and a colleague from the university who explained the intricacies of the matter to his commissioners, and they eventually approved the partnership.
The benefits of the cable were felt from the start in 2009. Eric Hersman, for example, an American-Kenyan tech enthusiast, asked me to provide at least 40 megabits for an open space he was developing to enable young people to access broadband for free. I embarked on establishing subsidized connectivity to the space, which was later known as the iHub. I gave directives that Telkom Kenya, one of the operators that had been acquired by Orange, a French conglomerate, was to provide the needed broadband. As I waited to hear the good news that iHub had been connected, Telkom sent me an invoice for USD200,000—money my ministry did not have. Clearly, few people had understood the concept of subsidized broadband to stimulate innovation.
Hersman later secured development assistance and raised capital to deliver broadband to iHub, which later became a hotbed of innovation. Kenya’s journey as a center for tech start-ups had begun.
The experience of developing TEAMS was a turning point in the development of the current public–private partnership policies and legal frameworks that are now used in implementing ICT policies in Kenya. Its dynamic policy development process enabled the project to be realized in a timely manner. Other aspects that led to the success of the project were having the courage to take entrepreneurial risks and, even more important, collaborating with industry through an online policy dialogue platform known as the Kenya ICT Action Network KICTANet, which has a global membership that shares best practices and seeks to have them implemented locally.