KPMG values $490m Fed Govt security investment at $17m
Members of the House of Representatives were stunned yesterday when it was revealed that a $490 million Federal Government project to improve security was valued at just $17 million after an audit by KPMG.
This was on the second day of a two-day investigative hepmgaring by the House ad-hoc committee to investigate the governing lease of Federal Government owned assets.
The investment, which is network of about 700 base stations, is called the National Public Securities Communications Systems (NPSCS) and was started around 2008 and commissioned in 2012.
Its objective was to make provide advanced communications capabilities for the police and other security agencies.
Members of the committee led by Daniel Asuquo could not hold their shock as Director for Projects of MTS Technologies, who are to run the project through a concession agreement, Mathew Udanogh, disclosed this during the investigative hearing.
Udanogh said by the agreement they are to manage the network for 33 years of which the first three years would be to get it up and running before operating for profit.
He said the concession agreement calls for is a minimum investment of $100 million towards a rehabilitation of the network.
“It is a security network, a telecommunications network that was built and commissioned approximately 2012. It was built with a technology called CDMA. The sponsoring Ministry is the Ministry of Police Affairs. It is a network of about 700 base stations and towers built around the country,” he said.
He said the original intention was that the network would be operated using government subventions and allocations from the National Assembly, but the government decided that was not going to be feasible and decided to concession it.
He said the concession process started in 2014 which they won and got the necessary approvals.
He said: “So thereafter they appointed a committee to select one of the top four accounting companies, KPMG, to do a nationwide audit of all the assets associated with this NPSCS. They conducted that audit and the conclusion of that audit, that led us to a full business case using the ICIC process and all of that information was resubmitted to the FEC and gave its approval for it to be entered to. This was in December 2020. In January 2021, the concession agreement was signed.
“Our job is to rehabilitate a network with this investment and make services available to the police and other security agencies so they can have advanced communications capabilities. We provide the services to the police but also provide it in a more limited way to commercial customers.
“An audit was performed on that network to bring up what is its current value today and it came to approximately $17 million. This network was not used so all the base stations have to be totally replaced and it cannot be used for any other thing.”