Alcatel-Lucent Shanghai Bell (ASB) provides $77.5 million supplier credit for Phase 1 of the National Rural Telephony Project (NRPT) (Linked to Project ID#61422)

On June 5, 2002, Alcatel-Lucent Shanghai Bell (ASB) entered into a commercial contract with the Government of Nigeria for Phase 1 of the National Rural Telephony Project (NRPT). Then, on July 5, 2002, ASB signed a $77,579,034.40 supplier credit agreement with the Government of Nigeria for Phase 1 of the National Rural Telephony Project (NRPT). This loan carried the following terms: 11 year maturity, 3 year grace period, and a 3.5% interest rate. The final maturity date of the loan was June 20, 2013, and according to the Government of Nigeria’s Debt Management Office (DMO), the loan was fully repaid by the end of 2013. In order to finance its supplier credit agreement with the Government of Nigeria, ASB secured an export seller’s credit from China Eximbank. The purpose of this project was to provide telecommunication (including phone, fax, and internet) services to 108 of the country’s 774 Local Government Areas (LGAs) in 36 states. It was envisaged that the project would install 636,256 Code Division Multiple Access (CDMA) lines. ASB was originally the sole contractor responsible for project implementation. However, on April 4, 2003, the commercial contract for this project was amended and assigned to a consortium including ASB and China National Machinery and Equipment Import and Export Corporation (CMEC). This consortium, in turn, hired Alcatel-Lucent Nigeria Ltd (ALU Nigeria) and other subcontractors to support the implementation of the project. Phase 1 was plagued by various problems and controversies. As of 2011, the project had still not successfully installed a single CDMA line. Then, in 2012, a top official of Nigeria’s Ministry of Communications Technology announced that “[t]he telecom industry is fully liberalised, there is very little government involvement and, therefore, we believe that the National Rural Telephony Project is better implemented and managed outside of government. So these six rural telephony exchanges are being concessioned to companies that have paid for them and our role is to monitor the implementation and delivery of services to rural areas. In a sense, we are getting out of the rural telephony.” Then, on February 21, 2013, the Nigerian anticorruption authorities launched an investigation regarding the alleged mismanagement of the National Rural Telephony Project, which focused specifically on the role of Alcatel-Lucent Nigeria Ltd (ALU Nigeria) and other vendors that supported the project.

Additional details

1. This project is also known as Phase 1 of the ALCATEL Nigerian Local Government Rural Telephony Project and the Nigeria National Rural Network Project. The Chinese project title is 尼日利亚农网一期项目 or 尼日利亚全国农网项目 or 农网电话项目 or 了尼农话网一期项目. 2. On December 27, 2006, ASB and CMEC entered into a contract with the Government of Nigeria for Phase 2 of the NRPT, and ASB’s portion of the contract was later assigned to CMEC on February 1, 2007. Phase II of the project was never undertaken due to a lack of financing. 3. See Project ID#61422 for a separate supplier credit from ZTE for Phase 1 of the National Rural Telephony Project (NRPT).

Number of official sources

12

Number of total sources

15