Subah Infosolutions Ghana Limited is in the news again, this time in connection with a tender it won for the supply of motorbikes for a street-naming project in the country.
Although the government has defended the award of the contract to Subah, civil society groups have raised eyebrows, saying that it is difficult to understand how an IT company could be awarded a contract to supply motorbikes for a street-naming project.
President John Dramani Mahama gave a directive to all metropolitan, municipal and district assemblies (MMDAs) to name all streets and number all houses in their respective areas within 18 months.
Subah Infosolutions won the contract for the procurement of motorbikes for the street-naming exercise, while Street Naming Ghana Limited won the contract to supply computers, accessories and software for the project.
To facilitate the execution of the project, the Ministry of Local Government and Rural Development has ordered all MMDAs to pay for the street-naming equipment. Regional Ministers
An official communication from the ministry to all regional ministers dated April 30, 2014 informed all regional ministers to ask all MMDAs under them to issue two separate cheques for the payment of street-naming items being distributed by the ministry.
One of the two cheques is supposed to be paid to Subah Infosolutions for the procurement of motorbikes for the street-naming exercise.
The other cheque is to be paid to Street Naming Ghana, which is supposed to supply field equipment, accessories and software for the same exercise.
Defending the award of the contract to the two companies, the Deputy Minister of Local Government and Rural Development, Alhaji Baba Jamal, told Joy FM that the contract had gone through due competitive bidding before it was awarded.
According to him, the process of bidding was followed from the ministerial tender level to the central tender board before the contract was awarded to the two companies.
For some time now, an agreement between the Ghana Revenue Authority (GRA) and Subah had come under attack until a committee instituted by the government said the contract was valid.
While civil society groups are raising issues over the award of the street-naming contract to Subah, controversy over the agreement between the GRA and Subah to monitor the mobile call traffic of the telcos rages on. Different opinions
Whereas the Ghana Chamber of Telecommunications and IMANI Ghana are damning the report issued by the committee set up to investigate the deal, the government is defending the transaction.
The Telecoms Chamber punched holes into the report and said the committee had overlooked the issues it needed to address and also failed to follow the right procedure .
It said, for example, that the committee invited officials from Subah to sit on it but failed to invite officials of the chamber.
It also, among other things, questioned the veracity of information put in the public domain that the telcos denied Subah access to their respective physical nodes, saying the GRA did not introduce Subah to the telcos until after July 2013 when the Communications Service Tax (Amendment) Act, 2013 (Act 864) was passed.
IMANI Ghana, for its part, described the acceptance of the committee’s report by the government as ‘broad-daylight robbery’.
Its president, Mr Franklin Cudjoe, tasked the government to come clean and state on what grounds it concluded that the report issued by the committee was without reproach and that the Subah deal was legitimate.
He also threatened to drag the NCA to the Commission on Human Rights and Administrative Justice (CHRAJ) to unravel the legitimacy of the contract.
But the government has insisted that the deal is ‘spotless’, saying that it would not abrogate it but would enforce the terms agreed upon to ensure that mobile network operators paid into the government kitty the taxes due it.
In an interview with the Daily Graphic , the Minister of Information and Media Relations, Mr Mahama Ayariga, said there appeared to be a scheme by certain groups to ensure that the agreement was abrogated but that would not happen. The 14-member committee
Reacting to questions raised by the telcos about the membership of the committee established by the Ministry of Finance to investigate the contract between the GRA and Subah, Mr Ayariga said the three representatives of Subah were not members of the committee.
He said the committee was made up of representatives of the Finance Ministry, the GRA and the NCA and had as part of its terms of reference the renegotiation of the contract.
He explained that the three Subah officials were sent by their company to sit with the committee and renegotiate the terms of the contract.
‘Technically, they were not members of the committee. It is the report that mistakenly, in the list of committee members, mentioned the names of the three officials of the company. They were not part,’ he said
It was, therefore, not important to make officials of the chamber members of the committee.
As to why the telcos were not consulted, Mr Ayarigah said Subah’s main task, when its officials met the committee, was the renegotiation of its agreement with the GRA.
That, he said, had nothing to do with the telcos and, therefore, consulting them was not necessary.
He said the renegotiation was a task for the GRA, which was responsible for ascertaining exactly how much tax it should collect from a service provider. Why Subah was paid
Mr Ayariga said although Subah had not connected its systems to the nodes of the telcos, it had done some work per the terms of the contract.
As a result of the work the company had done, he said the GRA had witnessed an increase in taxes from the telcos.
According to him, connection to the physical nodes of the telcos formed only one per cent of the agreement, hence the conclusion by the committee that instead of 13.5 per cent fees to be paid to Subah, it should be paid 12.5 per cent because it had not yet connected its systems to the nodes.
He said the telcos had no business asking why the GRA had paid Subah when the company had not connected its systems into the physical nodes of the telcos.
‘It is the GRA which has signed a contract with Subah. It is the telcos which have frustrated the process of connection to their nodes by going to court and placing an injunction on the process,’ he said.
Mr Ayariga explained that in 2010, after the government had signed the agreement with Subah, the NCA, which did not have the infrastructure to monitor calls, contracted the Global Voices Group (GVG) to use its facilities to ascertain the duration of calls and determine how much tax should be paid.
But the telcos went to court to restrain the NCA from using the GVG, with the explanation that if the GVG plugged its machines into the systems of the telcos, it would be able to eavesdrop on calls.
As a result of that move, he said, the Communications Service Tax, 2007 had to be amended to allow the government to use its agents to plug their systems into the facilities of the telcos.
He pointed out that the NCA itself did not have the facilities to plug into the nodes of the telcos and added that that was the reason the NCA had sought the services of other entities to conduct that business on its behalf.
Mr Ayariga said he had paid a visit to Subah’s offices and seen the machines it had procured to connect to the physical nodes of the telcos.
He added that Subah was very capable of carrying out the task it had been given. Background
Some time in 2010, the GRA contracted Subah Infosolutions to electronically monitor domestic call data records (CDRs) of the telecommunication companies in the country on its behalf for the purpose of collecting appropriate taxes from the companies.
The move was in line with the Communication Services Tax (Amendment) Act, 2013 (Act 864) which imposes an obligation on telecommunication companies to grant the Minister of Finance physical access to their facilities to electronically monitor their CDRs for tax purposes.
The GRA, acting on behalf of the Minister of Finance, had contracted Subah to undertake that task, with an agreement to pay Subah 13.5 per cent of incremental revenue collected thereof.
Incremental revenue is the revenue collected in excess of what the GRA projects to collect within the year.
Following media publications pointing to the deal being shady, a technical committee was set up by the government to investigate the deal.
That committee described the deal as valid and could not be set aside.
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