‘Spy machine’ to roll out this month

By Gregory Gondwe, Blantyre, Malawi

The Malawi Regulatory Authority (Macra) has disclosed that the implementation of the Consolidated ICT Regulatory Management System (Cirms) famed as ‘spy machine’ would start by the end of this month.

Macra procured the Cirms in 2010 for the purposes of fulfilling its statutory monitoring mandate to provide quality services, revenue assurance and fraud management among others.

The roll out of the so-called spy machine was delayed due to the legal battle, but last year, the court ruled in favour of Macra, allowing it to start implementing the system.

Speaking during a press briefing in Lilongwe, Minister of Information, Civic Education and Tourism, Kondwani Nankhumwa, confirmed that Macra would roll out the new system before the end of this month.

“We could be ready to roll out the system by the end of February but again what we are saying is that the machine will improve the quality of services in as far as our operators are concerned,” said Nankhumwa. Nankhumwa said in the absence of the monitoring machine, Macra was losing a lot of revenues.

In his remarks, Macra, Director General, Andrew Kumbatira, said Malawians should embrace the implementation of the system because it would benefit them.

Macra bought Cirms from US-based, Agilis International, at a cost of about 6.8 million US dollars, but since its procurement, operators in the country have been protesting its installation saying it would infringe of the right to privacy, a concern which Macra clarified, saying that the system will only track operators to deliver quality services.

Kumbatira explained that when the system was being designed in 2009, Malawi had around 2 million mobile phone subscribers. Currently the number has risen to 6 million.

“This increase in number of subscribers demands new computer servers with higher capacity, bigger probes to collect data from the operators and new software with high processing and storage capacity,” he said.

The original supplier Kumbatira said proposed that the upgrade will cost Macra an additional US$17m and this would bring the total project cost to US$17m. Since this project is unique with no off shgelf alternative to verify on this pricing, Macra engaged another supplier who came second when Macra was awarding the contract to the original supplier in 2010. The alternative supplier advised MACRA that it would cost US$14 million to install and commission a project of this nature.

“This gave Macra a basis of negotiating with the original supplier. Negotiations took almost two months and an amount of US$7.8 million for the upgrade was finally agreed bringing the total contract price to US$13.9 million.

Based on these calculations Macra says the change in price proposed by the original supplier will nonetheless benefit the country from utilising the system and that the cost outweigh the anticipated costs.

He said one of the main reasons of bringing Cirms was to conduct revenue assurance and it was agreed that the payment for the cost of the machine will come out of the introduction of international call termination fees.

“Due to the delays in commissioning Cirms, Macra proceeded to introduce international call termination fees without the system on understanding that once it became operational it would be used to check validity of the amount claimed by the operators,” he said.

Kumbatira said the system is not only beneficial to Macra on revenue assurance but other governing agencies as well like the Malawi Revenue Authority (MRA), and National Gaming Board (NGB).

“MRA collects Value Added Tax (VAT) of 16.5 percent on airtime but has no mechanism of verifying the amount which has been collected by operators while NGB is supposed to collect levy on any proceeds from competitions run by operators but they too have no means of verifying how much the operators have collected as fee for NGB,” he explained.

He therefore said the savings which these two institutions will make out of this system is expected to be significantly high and will go a long way in improving revenue collections from the two government bodies.

Kumbatira also said the introduction of the international call termination fees have already started to manifest as for the first time in its history, Macra was able to remit K2.2 billion as excess funds to government in the 2013-2014 financial year.

“The projections are that in the current year we shoukd bve able to remit around K3.5 billion and this should be compared to only K300 million which was remitted in 2012 – 2013 financial year,” he said.   

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