Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on July 10, 2019

KUALA LUMPUR: YTL Communications Sdn Bhd yesterday accused the ministry of education (MoE) of making unfounded claims in rejecting the company’s bid to extend its service under the 1BestariNet project.

“YTL Communications is extremely disappointed that the press statement issued by the MoE on July 5, 2019 and statements made at the press conference on the same day have made us appear to have taken advantage of the government.

“As a business, we have always sought to resolve matters amicably. Nevertheless, we cannot allow our reputation to be sullied by unfounded claims. Hence, we have to set the record straight,” the company said in a statement.

YTL Communications reiterated that the MoE breached the contract after failing to follow the phased awarding process laid out in the contract. This includes “a joint review of the project performance, changes in technology, basic educational needs and price prior to the expiry of each phase and before parties reach agreement on the next phase.”

The company won the tender via an open tender in 2011 to provide Internet connectivity to 10,000 schools nationwide. It undertook phases one and two of the 15-year project, which ended end-June this year.

Meanwhile, the MoE announced in July last year that it would call for a fresh open tender this year for phase three — which was then postponed on grounds of lack of budget.

YTL Communications claimed the ministry did not respond to its offer for free service during a six-month interim period of July 2019 to December 2019, before the tender for phase three is called.

“But on June 27, without even responding to our letter offering free services for the [six-month] period, the ministry announced the award of Internet services for the interim period to Telekom Malaysia (Bhd), Celcom Axiata (Bhd) and Maxis Bhd.

“As no joint review was undertaken as required under the contract and no open tender called, we regard this as a breach of our contract,” YTL Communications said, adding that many of the concerns raised by the ministry could have been addressed via the joint review.

YTL Communications also rejected MoE’s statement that the company used telco towers linked to the project for other commercial uses, in justifying the ministry’s assertion that the company should pay RM41.88 million “hidden” electricity bill for the telco towers, as well as potential loss of RM32.58 million in rental revenue from the towers.

The assertion, YTL Communications said, was unfounded, and that the two matters were clearly deliberated in its contract agreement with MoE.

“There was nothing hidden about this (electricity) cost. The ministry was aware of this at all times. In our tender for the project, it was clearly stated that the price we offered was on the basis that the cost of electricity supply to the towers would be borne by the ministry. This was evaluated by the ministry and deemed the most cost-effective offer,” it said.

“The ministry had accepted this for both phase one and phase two. In fact, the phase two agreement was signed in 2016 [after review and taking into account the Auditor-General’s Report in 2013],” it said.

It added that it does not rent any part of the towers to other telecommunication companies, hence there is no commercialisation of the towers.

“It was agreed in our contract that the rental of the school sites would be determined by Department of the Director-General of Lands and Minies (JKPTG). There is no loss of income for the government and the estimate of RM32 million is purely speculative,” it added.

“During the [six-month] interim period all rental will similarly be determined by JKPTG and will be borne by YTL Communications so there is no loss to the government of potential rental,” it further said.

YTL Communications went on to slam the ministry’s claim of weaknesses in the implementation of phase two with regard to connection speed.

“All bandwidth specification under the contract was determined by the ministry and not by YTL Communications. Therefore, if the teachers are dissatisfied with the Internet speed, it would be because the bandwidth that the ministry specified does not satisfy the requirements of the schools,” the company said.

On the alleged cost for the usage of the FrogVLE platform under YTL Communications as opposed to MoE’s proposed replacement Google Classroom, the company said it has offered to provide both Internet services and the platform usage free of charge during the six-month period.

“If the ministry had accepted our offer for the free services during the interim period, the ministry would have: i) saved millions which it is now paying to the three Internet service providers; ii) avoided disruption to the schools in the middle of the school year; and iii) the time to conduct a tender exercise following which they would have a properly defined solution and price,” it said.

“As a company that has worked with the ministry over the past seven years implementing a world-class nationwide learning solution that the country should be proud of, we cannot help but be disappointed. We, however, remain committed to playing our part in improving education in the country,” it added.

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