China Development Bank provides $178.5 million loan for Safe City Project

In January 2013, Government of Zambia’s Ministry of Home Affairs and ZTE Corporation signed a $210 million commercial contract for the Safe City Project (also known as Phase III of the Public Security Network Project). Then, in September 2013, the then Minister of Home Affairs Edgar Lungu was forced to cancel the $210 million tender awarded to ZTE Corporation to install closed circuit television (CCTV) cameras on the streets of Lusaka after public outcry and allegations of corruption in the bidding process (including potential kickbacks to Patriotic Front officials). Lungu the referred the case to the Anti-Corruption Commission and the Auditor General at the Ministry of Justice for further investigation. Then, on April 14, 2015, Zambia’s Deputy Minister of Home Affairs Colonel Gerry Chanda announced that the Government of Zambia decided to ‘re-table’ the bid. Nearly 18 months later, in October 2016, China Development Bank (CDB) and the Government of Zambia signed a $178.5 million loan agreement for the Safe City Project. The borrowing terms of the loan are unknown. However, it is known that the borrower was expected to use the proceeds of the loan to partially finance a commercial contract between the Government of Zambia’s Ministry of Home Affairs and ZTE Corporation, which was signed in 2016. The purpose of this project is to install CCTV cameras in various public places — such as streets, highways and bus stations — to enhance the monitoring of events within the city of Lusaka in order to curb crime. ZTE is the general (EPC) contractor responsible for project implementation. Construction started in December 2017. However, according to a report from the Government of Zambia's Parliamentary Committee on National Security and Foreign Affairs, this project was only in the initial implementation stages as of June 2019. The project was originally expected to reach completion by November 2020. However, as of February 2022, AidData had not identified any evidence of project completion. The African Parliaments Network against Corruption (APNAC) accused the ministry of unfair bidding practices. APNAC reported that ZTE had received the contract without having gone through the bidding process. They urged the Ministry to explain their choice of ZTE; claiming that other bidders had lower costs (1). In September 2013; the Ministry terminated the contract based on these accusations of corruption. Ministry of Home Affairs Minister Edgar Lungu referred the incident to the Anti-Corruption Commission and the Auditor General at the Ministry of Justice for further investigations (2). Although this controversy initially stopped the project; the project was later revived through the provision of financing in 2016.

Additional details

1. This project is also known as Phase III of the Public Security Network Project. The Chinese project title is 安全城市项目 or 赞比亚安全城市项目. 2. In 2017, the Government of Zambia also contracted a $78.6 million USD loan from Citi Bank UK Branch for the Safe City Project.

Number of official sources

7

Number of total sources

18