YTL claims education ministry breached 1BestariNet contract

This article first appeared in The Edge Financial Daily, on July 4, 2019.
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KUALA LUMPUR: YTL Communications Sdn Bhd has claimed the ministry of education breached contractual obligations pertaining to the supply of Internet connectivity to 10,000 schools nationwide following its appointment of Telekom Malaysia Bhd (TM), Celcom Axiata Bhd and Maxis Bhd as providers of interim Internet services for the second half of the year (2H19).

Under the ministry’s June 27 announcement, the three telecommunication companies (telcos) will replace YTL Communications for the period July 1 to Dec 31, 2019.

After investing more than RM4 billion building up the infrastructure in the schools for the 15-year project, YTL Communications maintained it was its “legitimate expectation” that it would be given an extension of the contract into the next phase.

“We view the ministry’s actions as being in breach of their contractual obligations to us. Disappointingly, they have not acted in good faith in respect of what we have been informed and what has actually been implemented,” the 60%-owned subsidiary of YTL Power International Bhd said in a statement yesterday.

It cautioned changing the (teaching) platform “will set the entire education system backwards years.”

According to YTL Communications, the ministry had requested for free Internet services for 10,000 schools operating a virtual learning environment (VLE), as it was “not ready for a tender for implementation on July 1” when phase 2 of the contract with YTL Communications would expire.

YTL Communications said this was communicated during a meeting on April 23 between the ministry, TM, Celcom Axiata and Maxis as well as other Internet service providers (ISPs) over Phase 3 of the 1BestariNet project.

“The ministry requested that we provide free Internet services as the government ‘did not have the budget’ to pay for these services.”

In response, the telco wrote to Education Minister Dr Maszlee Malik on May 31 confirming that it would provide a complete solution of free Internet services as well as the Frog VLE for the interim period until the tender was called and awarded.

“Our primary concern was to ensure teaching in schools was not disrupted in the middle of the school year. Unfortunately, we did not receive any response to our offer,” YTL Communications said, adding it had come as a complete surprise to hear its rivals had been appointed instead.

“The ministry had excluded YTL Communications, reneged on its statement to call an open tender and agreed to pay for the Internet services to the three appointed ISPs, although we had offered the services for free.”

The 1BestariNet project was awarded to YTL Communications in 2011 after an open tender for a 15-year service contract to be implemented in phases. The scope of work included providing a total learning solution comprising Internet connectivity, security and the Frog VLE.

In July last year, the ministry announced it would call a fresh tender for the learning solutions. YTL Communications claimed the ministry confirmed the company would not be excluded from the tender.

Abandoning Frog VLE in favour of Google Classrooms would lead to disruptions as years of teaching content has been created on the platform, YTL Communications asserted, and as entire schools have become acculturated to using the platform.

“Having successfully completed Phases 1 and 2, Phase 3 would have seen the full adoption of digital teaching and learning in classrooms January 2020.

“Changing the platform and starting all over again will set the entire education system backwards years,” YTL Communications warned.

However, YTL Communications said it will continue to make the Frog VLE available and to allow teachers to retain the smartphones provisioned with teacher data plans to prove its commitment to serve the nation. “This would prevent disruption and would allow teaching and learning to continue in classrooms and at home.”