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

Project narrative

On January 31 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 exact 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 scope of the project included four components: (1) construction of a national command center in Lusaka, (2) construction of eleven regional command centers in Kabwe, Choma, Livingstone, Ndola, Kitwe, Solwezi, Chinsali, Kasama, Mongu, Chipata and Mansa, (3) construction of thirty-six communication towers nationwide, and (4) installation of a radio communication system in 116 districts and a video surveillance system (consisting of CCTV cameras) in Lusaka, Ndola, Kitwe, and Livingstone Provinces. The ultimate project objective was to curb crime and enhance real-time monitoring of events in various public places, such as streets, highways and bus stations. ZTE Corporation was 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, the project was only in the initial implementation stages as of June 2019. The project was originally expected to reach completion by November 2020. However, its handover (completion) ceremony did not take place until August 30, 2022. Chinese Minister Counselor Lai Bo and Zambian Minister of Interior Jacob Jack Mwiimbu attended the handover ceremony. By 31 December 2023, the outstanding balance was $178.5 million. In the Zambia's Office of the Auditor General 2023 Audit Report, there were multiple issues identified in the Safe City project, including: ZTE Corporation's failure to remit unspent funds, improper management and transfer of IT infrastructure, lack of insurance coverage for Safe City assets, failure to maintain asset register, unauthorised Sharing of Personal Information with Road Transport Safety Agency (RTSA), and more. Many of these issues show non-compliance with Zambian law.