By Eliaser Ndeyanale
STATE broadcaster, Namibia Broadcasting Corporation (NBC) is struggling to pay Chinese ICT giant Huawei Technologies N$78 million it used for its Digital Terrestrial Television (DTT) rollout.
In 2011 NBC and Huawei signed a five year contract; the contract entailed migration all analogue TV stations to digital (DTT) and the construction of new stations to increase the total coverage from 59 percent to 92.8 percent DTT coverage on the completion of the project.
Responding to questions from Mike Kavekotora of the Rally for Democracy and Progress (RDP) in the National Assembly, last week deputy minister of information Stanley Simataa revealed that NBC owes Huawei N$78 million in frequency modulation (FM) and television transmitters equipment already manufactured and delivered but awaiting payment.
“The NBC owes Huawei money for decoders and equipment calculated at exchange rate of U$1.0=N$14.00, in the financial year NBC owes N$78 361 369.00 for FM and TV transmitters equipment already manufactured and delivered but awaiting payment.
“There is a consignment of 20 000 decoders ordered, the payment amount for this consignment is N$29 887 200. 50 percent of this amount is payable to during 2016/17 and the balance during 2017/18 financial year,” he said, adding that although the decoders have been ordered, production could only commence once the down payment has been made.
He has also revealed that for the coming financial year the state broadcaster will owe Huawei N$7.2 million for equipment already manufactured but awaiting payment before delivery.
He further said that NBC entered into a contract with Huawei when the exchange rate was U$1/N$6.80, adding that this negatively affected NBC’s ability to complete the project within projected budget.
According to him, NBC which also gets budget allocation from Government, purchased the first batch of 80 000 decoders whose delivery cost for each decoder was N$1 500 and sold to the viewers at N$199 and made a loss of N$104 million in this exercise. Their supplier made revenue of N$120 million.
Ironically, NBC has also run out of decoders and cannot supply any decoders to the residents. This affects thousands of families especially those in rural areas where a complete switchover from analogue to digital was done as they face complete blackout on both TV and radio through the NBC terrestrial network.
NBC has also delayed the rollout of the remaining DTT transmitters and proposed new sites due to financial constrain resulting from finalisation of the DTT policy and frequency allocation and the cut on government expenditure, which affected the Ministry of Information and thus NBC.
Approached for comment, NBC board chairperson Sven Thieme said NBC owes Huawei N$56 million but refused to go into detail, saying NBC director general Stanley Similo was the right person to comment on the matter.
Asked if it makes business when NBC pays N$1500 for delivery cost of each decorder and sells them for N$199 Similo answered “the context here is that GRN is part of ITU and as a member, Namibia agreed to introduce DTT to its people so as to ensure picture quality from a television side and equally to bring radio services to most of the people living inside Namibia. It is against this background that GRN decided to subsidize the DTT decoder and make it affordable while ensuring access to information to the Namibian people.”
He added that “at the initial phase of DTT roll out, the cost of purchasing a decoder was standing at about N$ 700.00 however this price tag changed due to the fluctuation of the U$D exchange rate.”
Last month Parliamentary Standing Committee pointed to financial irregularities at NBC. The committee found an unaccounted amount of N$24 million.
“No creditors reconciliation was performed on the foreign creditor amount of Huawei Technologies Ltd. The balance as per the creditors agreeing indicated a debit balance amounting to $651,377,” read the Committee’s report.
The NBC has been a target of public and parliamentary criticism in recent years due to poor financial results, which have seen several directors general and board members
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