Digital Migration: Financing hurdle cleared but country to miss deadline

The Chinese government has approved and signed the long-awaited loan facility agreement with the government of Ghana, paving the way for Ghana to complete its national digital terrestrial transmission project, B&FT has gathered.

The government of Ghana is now expected to countersign the loan agreement and submit it to parliament for ratification within the next few weeks, as any further delay will affect the country’s race to meet the international deadline of June 17, 2015 for all countries to migrate their broadcasting networks from analogue to digital.

Although the loan financing agreement, which has been a major hurdle in the digital switchover efforts, has been cleared, Ghana will most likely miss the international deadline set by the International Telecommunication Union (ITU) as the main contractor and supplier of the digital terrestrial equipment, Star Communication Network Technology (StarTimes) sets to fully finish the main capital cities by July, 2015.

According to the ITU, any country that fails to meet the deadline will not receive any protection from the Union should any country interfere in its broadcasting space.

Ghana’s attempt at digitalising its broadcasting networks is estimated to cost the country about US$95million, and lack of funding for the time-bound project is causing uneasiness in government circles and among broadcasting firms and consumers.

The government fixed a self-imposed deadline of December 2014 to complete migration from analogue to digital but failed to meet it, and is set to miss the global deadline too.

The Minister of Communication, Dr. Edward Omane Boamah, in a desperate-toned letter obtained by the B&FT to StarTimes expressed his frustration at the delay in the migration process and threatened to abrogate the agreement if the financing agreement and funding failed to reach his office by the end of November last year.

He stated: “We write to express concern on the long delay in the commencement of work on the digital terrestrial television project in Ghana.

“This project has delayed unduly as a result inaccessibility to funding from the Chinese Exim Bank.

“The effectiveness of the contract executed between the Ministry of Communications and StarTimes and subsequent implementation of this project is dependent on securing the necessary cabinet and parliamentary approval. The necessary constitutional approvals cannot be fully secured without the financing agreement.

“As you are aware, the migration from analogue to digital television broadcasting is a time-bound project and June 17, 2015 is the deadline. Accordingly, we write to indicate our intention to disengage if the financing agreement and funding does not reach us by Friday 28th November, 2014.”

However, StarTimes in response has exonerated itself from blame and cited government’s ineptitude for the delay in implementation of the digital project.

According to StarTimes — a Chinese firm — government has over the past couple of years laid back on the project after signing the digital terrestrial television contract.

The Chairman of StarTimes, Pang Xingxing explained that the government flouted an initial agreement that required imported equipment for the project to be tax-exempted for clearing at the ports.

“However, the government of Ghana through the Ministry of Finance could not fulfil its obligations as agreed, and therefore the equipment was abandoned at Tema Port for more than 24 months until we decided to mitigate our loses by shipping it to Nigeria where we have other projects.

“There were undue delays on the part of the Ministry of Finance in responding to queries from China Exim Bank. The China Exim Bank sent a query to the Ministry of Finance on 27th January, 2014 after initial review of the loan application.

“China Exim Bank sent a reminder to the Ministry on 7th May, 2014 referring to its request per letter dated 27th January, 2014.

“In the absence of any reply from the Ministry concerning the issues raised in its letter, the Bank per another letter dated 25th June, 2014 clarified its request per its letter of 27th January, 2014 for the Ministry to clarify or confirm the issues raised therein to the Bank.

“It was after all these letters from the Bank that the Ministry of Finance per letter dated 29th July, 2014 then responded to the letters from the Bank…It is clear from the foregoing that we have played our part in speeding-up implementation of the digital terrestrial television project,” he said.

According to StarTimes, the company is committed to executing the digitalisation project and has proposed to fully pre-finance the first phase of the project at no extra cost to government.

The company has also expressed commitment to establishing a set-top box plant in Ghana based on a public private partnership model to enable TV audiences that do not have High Definition (HD) Ready TV sets to receive digital signals through low-cost set-top boxes.

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