Completed Development AidData Chinese Aid

China Development Bank provides USD 178.5 million loan for Safe City Project

$178.5M USD

Funder	China Development Bank (CDB)
Recipient Organization	Government of Zambia
Country	Zambia
Start Date	Oct 01, 2016
End Date	Sep 01, 2026
Duration	3,622 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`57033`

Grant Description

China Development Bank provides USD 178.5 million loan for Safe City Project On January 31 2013, Government of Zambia’s Ministry of Home Affairs and ZTE Corporation signed a $210 million commercial contract for the Safe City Project (also known as Phase III of the Public Security Network Project).

Then, in September 2013, the then Minister of Home Affairs Edgar Lungu was forced to cancel the $210 million tender awarded to ZTE Corporation to install closed circuit television (CCTV) cameras on the streets of Lusaka after public outcry and allegations of corruption in the bidding process (including potential kickbacks to Patriotic Front officials).

Lungu the referred the case to the Anti-Corruption Commission and the Auditor General at the Ministry of Justice for further investigation.

Then, on April 14, 2015, Zambia’s Deputy Minister of Home Affairs Colonel Gerry Chanda announced that the Government of Zambia decided to ‘re-table’ the bid.

Nearly 18 months later, in October 2016, China Development Bank (CDB) and the Government of Zambia signed a $178.5 million loan agreement for the Safe City Project.

📋 Loan / Grant Terms

💰 Loan Amountare unknown

However, it is known that the borrower was expected to use the proceeds of the loan to partially finance a commercial contract between the Government of Zambia’s Ministry of Home Affairs and ZTE Corporation, which was signed in 2016.

The scope of the project included four components: (1) construction of a national command center in Lusaka, (2) construction of eleven regional command centers in Kabwe, Choma, Livingstone, Ndola, Kitwe, Solwezi, Chinsali, Kasama, Mongu, Chipata and Mansa, (3) construction of thirty-six communication towers nationwide, and (4) installation of a radio communication system in 116 districts and a video surveillance system (consisting of CCTV cameras) in Lusaka, Ndola, Kitwe, and Livingstone Provinces.

The ultimate project objective was to curb crime and enhance real-time monitoring of events in various public places, such as streets, highways and bus stations. ZTE Corporation was the general (EPC) contractor responsible for project implementation. Construction started in December 2017.

However, according to a report from the Government of Zambia's Parliamentary Committee on National Security and Foreign Affairs, the project was only in the initial implementation stages as of June 2019. The project was originally expected to reach completion by November 2020. However, its handover (completion) ceremony did not take place until August 30, 2022.

Chinese Minister Counselor Lai Bo and Zambian Minister of Interior Jacob Jack Mwiimbu attended the handover ceremony. By 31 December 2023, the outstanding balance was $178.5 million.

In the Zambia's Office of the Auditor General 2023 Audit Report, there were multiple issues identified in the Safe City project, including: ZTE Corporation's failure to remit unspent funds, improper management and transfer of IT infrastructure, lack of insurance coverage for Safe City assets, failure to maintain asset register, unauthorised Sharing of Personal Information with Road Transport Safety Agency (RTSA), and more.

Many of these issues show non-compliance with Zambian law.

📋 Staff Comments

This project is also known as Phase III of the Public Security Network Project. The Chinese project title is 安全城市项目 or 赞比亚安全城市项目 or 赞比亚平安城市项目.
In 2017, the Government of Zambia also contracted a $78.6 million USD loan from Citi Bank UK Branch for the Safe City Project.
The African Parliaments Network against Corruption (APNAC) accused the Ministry of Home Affairs of unfair bidding practices. APNAC reported that ZTE Corporation had received the contract without having gone through the bidding process. They urged the Ministry of Home Affairs to explain their choice of ZTE, claiming that other bidders had lower costs. In September 2013, the Ministry of Home Affairs terminated the contract based on these accusations of corruption.
According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 4.3254-years in 2016. AidData estimates the grace period of the CDB loan that supported the Safe City Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 16.0126-years in 2016. AidData estimates the maturity of the CDB loan that supported the Safe City Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 6. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 3.4612% in 2016. AidData estimates the interest rate of the CDB loan that supported the Safe City Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0

📚 Sources & References

Government Resurrects Controversial Project to install CCTV cameras on Lusaka streets
REPUBLIC OF ZAMBIA REPORT OF THE COMMITTEE ON NATIONAL SECURITY AND FOREIGN AFFAIRS FOR THE THIRD SESSION OF THE TWELFTH NATIONAL ASSEMBLY
DAILY PARLIAMENTARY DEBATES FOR THE THIRD SESSION OF THE ELEVENTH ASSEMBLY Friday 27th September, 2013, 2019 National Economy Report
Speech at the Commissioning and Handing over of Para Military Police Housing Units in Lilayi
Huawei
Africa and the global reach of surveillance technology
PF cancels CCTV deal after Daily Nation exposé
China's Digital Silk Road is Looking More Like an Iron Curtain
Zambia veering toward Chinese model oppression
李杰大使在内政部保障房项目lilayi地块住房交接仪式上的讲话
How Chikwanda borrowed over US$9 billion for Zambia
ANNUAL ECONOMIC REPORT 2016
中国对外承包工程国别（地区）市场报告2019-2020.pdf
China Loans to Africa
Zambia cancels ZTE CCTV deal over alleged irregularities
Irregularities in the award of multimillion-dollar telecommunications contracts to two Chinese companies lead to their cancellation
ZTE’s Record of Worldwide Misconduct
Zambia: Corruption Concerns Over ZTE's No-Bid Contract in Lusaka
赖波公参出席平安城市项目移交仪式
MATTERS OF URGENT PUBLIC IMPORTANCE
Minister Counsellor Lai Bo Attends the Commissioning Ceremony of the Safe City Project
Audit Report of the Republic for the Financial Year ended 31st December 2023 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Government of Zambia

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