THE REPUBLIC OF UGANDA

BRIEF TO PARLIAMENT

THE PROPOSAL TO BORROW UP TO USD 104.0 MILLION FROM

STANDARD CHARTERED BANK TO FINANCE THE NATIONAL CCTV
NETWORK EXPANSION PROJECT

PURPOSE

1 This brief is for the purpose of seeking authorization of Parliament and

as required under Article 159 of the Constitution, to allow the
Government to borrow up to Euro 104.0 Million from Standard
Chartered Bank to finance the National CCTV Network Expansion
Project.

INTRODUCTION

2 Rt. Hon. Speaker, following the wave of crimes repofted in the city
and outskirts of Kampala due to the high population growth and high
rate of urbanization registered in the country, it has become necessary
to beef up security and reduce crime through the purchase and
installation of security equipment. It is for this reason that government

designed the "National CCTV Network Expansion Project" to

develop capacity to track criminals, money launderers, tax evaders,
traffic management and other economic and social crimes by cameras
and other means.

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3 Thls will improve tourism and investments; promote economlc and
social development; and build confidence in the public thereby
improving on the Growth Domestic Product (GDP) of the country.

4 Under the project, government intends to undertake the following

activities:

a. Design and build the main Command and Control centre, mobile
command and control centres and regional command and control
centres;
b. Video surveillance through the Installation of CCTV cameras
across the country;
c. Installation of integrated communication platforms;
d. Integrated case management systems (AFIS, face recognition
software, DNA, other systems);
e. Development of data centre with disaster recovery sites;
f. Installation of the required network infrastructure;
g. Training of staff in all the relevant systems (capacity building);
and
h. Operation and maintenance of the system.

5 Rt. Hon. Speaker, government requires a total of USD t26,I78,723.86

to implement the project. Out of which government intends to borrow
704,022,277 from Standard Chartered Bank (SCB). Government
contribution amount is USD 22,t56,446.86.

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6 The project will be implemented in a period of 25 months in two
phases; Phase one will cover the Kampala Metropolitan areas and
phase two will cover the whole nation. Ministry of Internal Affairs will

be the Project Executing Agenry and Ms. Huawei Technologies

(Uganda) Co. Ltd, the contractor, while the Ministry of Information,
Communications Technology and National Guidance and the National
Information Technology Authority - Uganda (NITA -U) has been
tasked to provide quality assurance and supervision of the project.

7 The project shall build onto the government network available and
considerations have been made to make savings from future rollout of
ICT projects through the installation of spare ducts, thus saving
Government overSlbn in the long term, use of excess capacity on
sections where it shall exist for the delivery of e-government services,
the use of existing Data Centres for the purposes of disaster recovery
of the CCTV Project and existing expertise within the ICT sector to
provide support to the project.

8 The project has undertaken a harmonization process and it is agreed

that a data Centre shall be built under the project but use the existing
Disaster Recovery site under the National Information Technology
Authority.

BACKROUND

9 Rt. Hon. Speaker, as you are aware, the current population growth
and rapld urbanization in Uganda has led to an increase in economic
activities, motor fleet, traffic jam, population mobility and
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 infrastructure development. This development has resulted in to major
challenges in crime prevention, monitoring and apprehension of
criminals. Law enforcement has become difficult to the law
enforcement agencies.

10. Over the past few years, the few cameras and CCTV system installed
by government and private individuals, has greatly improved
investigations. From 2015 to date, the CCTV camera evidence has
helped in investigation and prosecution of some cases as indicated in
the table below:

Table 1: Showing number of cases investigated and

rosecuted usin CCTV camera foota es
Cameras as per Quantity Cases Handled
the Institution 2015 20t6 20L7 2018
Pohce t2L 00 10 25 77
Private Various 30 44 60 34

11. The table above shows that the cases suppofted by CCTV camera
analytics increased annually. A lot has been achieved by the currently
operating cameras through; securing the city and its surroundings
through surveillance, Traffic management, and Securing vltal
installations.

t2. With the increasing crime and traffic incidences in the city,
municipalities and highways, the need and importance of this project
cannot be underestimated.

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THE PROJECT AND COUNTRY STRATEGY

13. The project is in line with the Uganda Vision 2040 and the National
Development Plan II (2015i16 - 2019120). NDP II chapter 3

paragraph 316, states that scientific, technological and innovation

advancement is a critical precursor for industrialization and therefore
development. It enables the creation of new firms and/or industries
that act as avenues for commercializing new products and processes.
This stabilizes the technology balance of payments through net
exportation of Research and Development outcomes and production
ready technologies. With technological innovation and absorption,
countries now have the ability to industrialize faster and more cheaply
than before,

STATEMENT OF THE PROBLEM

t4. Hon. Colleagues, Uganda is a metropolitan state carrying out various

activities which include commercial activities, tourism, among others
which bring about congestion and attract crimes. Other urban centres
are also growing fast and with a lot of economic activities across the
country. The city and municipalities face a challenge of traffic
management and crime intelligence gathering and investigations that
affect business opportunities and safety of the population therein.

15. There is also a rise in road traffic crashes along all the highways in the
country leading to loss of lives and injuries that result into loss of
revenue. There is also a rise in highway robberies which results in loss

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 of lives and property thereby impacting economic development. If
these challenges are not dealt with there is likely to be an increase in
crime rates and levels and also unmanageable traffic congestion in the
city.

16. Police management currently depends much on information brought in

by human beings in the management of crime and public order. This
sometimes has flaws whereby the informant can use it as a way to
divert attention. With this project, intelligence gathering,
investigations, operations and traffic management are expected to
greatly improve thus resulting into reduced cnme rates and public
disorder.

JUSTIFICATION FOR THE PROJECT

t7. The increased crime rate in Uganda calls for use of technology to help
in crime prevention and investigations. The video surveillance network
is one of the remedies for crime prevention. A criminal may think twice

before he/she commits a crime in an area where a camera is installed

because cameras do not tire like a human being and they work 2417.
Use of the camera system to identiff a suspect in a million people by

face is faster than using human beings. Identifying a wanted vehicle in

numerous cars by number plate is easier than if it's the human being
making a follow up by counting the cars. The Closed Circuit Television
(CfiV) network brings in a functionality of linking camera together
and all work together to link a suspect and is able to be traced by
face,

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18. Crime prevention and policing require dependable and informed
decisions among the commanders. Scientific evidences are
undisputable in courts of laws. The video surveillance comes with real
time feeds that help commanders to make decisions that are based on
the real time situations, and this builds confidence to the public.

19. Over the years, on average the Police investigates about 100,000
cases per year and the cost of investigating one criminal case like
murder or robbery is at least shs.6,000,000. This translates to a

shs.600bn funding requirement per year. With the CCW system in

place, this cost will reduce dramatically with an estimated Shs.
2,000,000 investigation cost per case.

20. With this project, intelligence gathering, investigations, operations and

traffic management are expected to greatly improve thus resulting into
reduced crime rates and public disorder.

THE PROJECT AND COUNTRY STRATEGY

2T, The Justice Law and Order Sector (JLOS) is responsible for
administering justice, maintaining law and order as well as promoting
and protecting human rights. In its objectives to enhance access to
JLOS services, particularly for vulnerable persons, the UPF is set to
introduce measures to enhance JLOS capacity to prevent and respond
to crime in accordance with constitutional and human rights standards.

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27. H. E the President also gave out 23 Presidential directlves directly
emphasizing modernization of policing by employing scientific methods
in policing to control and fight crimes. Physical security is our first
point of defence; so today the most impoftant aspect of physical
security is the CCTV cameras. Placement of surveillance cameras is

crucial to Kampala Metropolitan, municipalities, major towns and

highways to secure life and property. In brief, the CCTV systems will

enhance the following:

a) Crime prevention,
b) Provision of real time evidence in criminal arrests,
c) Simplification of policing based on a 2417 monitoring,
d) Proper decision making during personnel deployment basing
on situations,
e) Response to incidents in real time since the activities are
monitored is high,

0 Complement modern policing concepts.

23. Currently the CCTV coverage in KMP is as indicated in the table below:

Table 2r Showing the current CCTV coverage in Kampala

Metropolitan Policing Area.
CCTV Nehruork Segment vtz Fixed Total
Cameras Cameras
Police Headquarters 10 28 38
City Streets Surveil lance 19 32 51
Directorate of Forensrcs 0 7 7
Force Mechanrcal Workshop 2 23 25
Mobile Surveillance (Vans) 3 1 4
Total 33 9 ,-24

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24. A number of camera sites will be installed in collaboration with the
Police Command structures/ offices basing on the following factors:

i) Distance from the NBI (Government optic fibre cable)

ii) Presence of electric power,
iii) Crime density,
iv) Security opportunities in place,
v) Presence of private CCW cameras/ownership,
vi) Presence of telecommunications infrastructure other than optic
fibre,
vii) Geographical coordinates,
viii) Development status,
ix) Presence of speed limit signs,
x) Line of view of the camera,
xi) Strategic and high points along highways,
xii) Development rate.
THE PROJECT

25. Objective: To develop capacity to track criminals, money launderers,

tax evaders, traffic management and other economic and social crimes
by cameras and other means hence improving tourism and
investments; promoting economic and social development; and
building confidence in the public thereby improving on GroMh
Domestic Product (GDP) of the country.

26. Project Location: The project will be implemented in the Kampala

Metropolitan Area in the first phase of the project and thereafter will
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 be rolled out to the whole country under the Second phase of the
project.

PROJECT DESCRIPTION

27. The following activities will be undertaken once the project is

implemented. The activities are highlighted in the table below;

Table 1: Estimated Costs of the Project

Phase Summary of Activities Estimated Cost
(usD $)
Phase I a. Design and build the main Command and Control
(Kam pala centre, mobile command and control centres and
Metropolitan regional command and control centres, 82,756,809.10
Area) b. Video surveillance (installation of CCTV cameras)
across the country,
c. Installation of integrated communication platforms,
d. Integrated case management systems (AFIS, face
recognition software, DNA, CRMS),
e. Development of data centre with disaster recovery
sites,
f. Installation of the required network infrastructure,
g. Training of staff in all the relevant systems,
(capacity building),
h. Operation and marntenance of the system.

Phase II a. Design and build the regional and district

(Highways, command and control centres,
municipalities b. Video surveillance (installation of CCTV cameras)
, major across the country, 37,502,876.83
towns) c. Installation ofthe required network infrastructure,
d. Trainrng of staff in all the relevant systems
(capacity building),
e. Operatron and maintenance of the system.

Additional Ducts for future expansion of e-Government 1,320,000.00

Project system
Costs
Premium 15% SINOSURE Premium to be covered by GoU 7,379,034.25
Taxes 18% VAT on local materials to be covered by GoU 3,220,002.78
Total Project Funding L26,L78,723.86
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 PROJECT COST AND FINANCING

28, The total cost of the project is estimated at US$ 126.2 Million. The
amount to be financed by a loan from the Standard Chartered Bank is
US$ 104.0 Million. The expected counterpaft contribution from
Government of Uganda will cater for taxes; premium; ducts for future
expansion of e-government system; and an upfront payment of US$

USD 16.23 million which has already been paid to the contractor. The
upfront payment fee was required for the contractor to commence
works under the project.

Loan Terms and Conditions

29. The Credit facility will have the following terms:

a) Loan Amount US$ 104.0 million

b) Maturity Period 12 years including a grace period of 3 years

c) Interest Rate 6 months USD Libor + margin of 27o

d) Upfront Fee L.4o/o of the loan amount
e) Commitment Fee 0.3% p.a. on undisbursed Loan amounts
f) Agenry Fee USD 200,000 (upfront payment)
g) Insurance Fee 8.8% of the loan amount (of which 85o/o will be
paid from the loan and 15olo by Government).

Notes:
" 6 month USD Libor rate at August 1, 2018 is 2,53363"/". The Libor has been
capped at 3.8%" Jor this loan.

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Conditions Precedent to Loan Effectiveness

30. In addition to entry into force of the loan agreement by submission to

the Lenders of the Attorney General's legal Opinion on the legal
validity of the loan documentation to the Government, the following
conditions are attached to loan:

a) A copy of a duly passed Resolution of Parliament of Uganda

approving and borrowing.

b) An evidence of authority for the person(s) who will make,

sign and deliver documents necessary for the implementation
of the Loan Agreement, together with an authenticated
specimen signature of each such person.

c) Evidence that the drawdown of the facility will not breach any
borrowing limit or any limit binding on the borrower.

d) A ceftified copy of the contract duly executed between the

final beneficiary and contractor.

JUSTIFICATION OF THE SOURCE OF FINANCING

31. Rt. Hon. Speaker, as you are ware/ the project is needed urgently and
therefore there was need to urgently secure funding and affordable
financing. My ministry went on the market and requested for
expression of interest from a number of financiers including but not

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 Standard Chartered Bank, Uganda Bank of Africa, and China Exim
Bank. The Standard Chartered Bank returned to us with interest in

financing the project with the terms indicated above. We found their
terms and conditions favourable compared to the market rates
available.

32. The terms of other possible potential funders were extremely

unfavorable in the range of 6.5olo p.a and above. Furthermore, from
past experience Standard Chartered bank provides fast and quick
financing. You may wish to note that that the process and procedures
for financing from Exim Bank concessional window takes longer on
average two years and will delay implementation of the project.

33, In view of the above my ministry decided to engage Standard

Chaftered Bank for financing. The financing is commercial but still very
favourable according to the market rates available.

PROJECT IMPLEMENTATION

34. The project will be implemented by the Ministry of Internal Affairs

through Uganda Police Force and the contractors M/s Huawei
Technologies (Uganda) Co. Ltd.

THE LOAN AND THE CURRENT DEBT SITUATION OF THE COUNTRY

35. As at end March 2018, the outstanding total public debt, including
publicly guaranteed debt, amounted to USD 10.5 billion. Nominal debt
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 as a per cent of GDP was 38.1o/o, of which domestlc debt was 72.1o/o
and external debt 26%. This number is important because it clearly
highlights the proportion of the country's debt to its income. Source:
Directorate of Debt and Cash Poliry, MoFPED.

CONCLUSION

36. In light of the above, I request Hon. Members to:-

a) Note the need to acquire financing for the National CCTV

Network Expansion Project;

b) Endorse the request by Government to borrow up to USD

104.0 Million from the Standard Chaftered Bank (SCB) to

finance the National CCTV Network Expansion Project; and

c) Authorize the Government by passing a Resolution in line

with the requirements of Article 159 of the Constitution, to
borrow up to USD 104.0 million from the Standard
Chaftered Bank (SCB) to finance the National CCTV
Network Expansion Project, for the purposes and upon the
terms and conditions here above stated.

Ministry of Finance, Planning and Economic Development

P. O. BOX 8147
KAMPALA

September,2018
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