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Today's Topics:<br>
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1. Re: HP says laptop bid price changed to favour rival Olive<br>
(Adam Nelson)<br>
<br>
<br>
----------------------------------------------------------------------<br>
<br>
Message: 1<br>
Date: Wed, 19 Feb 2014 15:08:54 +0300<br>
From: Adam Nelson <<a href="mailto:adam@varud.com">adam@varud.com</a>><br>
To: Ali Hussein <<a href="mailto:ali@hussein.me.ke">ali@hussein.me.ke</a>><br>
Cc: KICTAnet ICT Policy Discussions <<a href="mailto:kictanet@lists.kictanet.or.ke">kictanet@lists.kictanet.or.ke</a>><br>
Subject: Re: [kictanet] HP says laptop bid price changed to favour<br>
rival Olive<br>
Message-ID:<br>
<CAGTm15=<a href="mailto:GXJOuuzomsJkDUScSx14KL3CpqeVA9LboUkkKnVBB7w@mail.gmail.com">GXJOuuzomsJkDUScSx14KL3CpqeVA9LboUkkKnVBB7w@mail.gmail.com</a>><br>
Content-Type: text/plain; charset="iso-8859-1"<br>
<br>
It's called mercantilism (<a href="http://en.wikipedia.org/wiki/Mercantilism" target="_blank">http://en.wikipedia.org/wiki/Mercantilism</a>) and it<br>
can actually work as pointed out with certain industries. I won't claim to<br>
be an economist but if a country wants to be more mercantilist, it needs to<br>
meet a few basic requirements:<br>
<br>
1. Very smart technocrat class making smart decisions about what industries<br>
to nurture.<br>
2. Consistency over time (i.e. 10-15 years).<br>
3. Limited focus (i.e. pick 3-4 industries, not 20).<br>
<br>
I just hope that Kenya doesn't choose to put its chips into a 20 year old<br>
industry that doesn't even exist here and has already plateaued globally,<br>
i.e. laptop assembly.<br>
<br>
<br>
--<br>
Kili - Cloud for Africa: <a href="http://kili.io" target="_blank">kili.io</a><br>
Musings: <a href="http://twitter.com/varud" target="_blank">twitter.com/varud</a> <<a href="https://twitter.com/varud" target="_blank">https://twitter.com/varud</a>><br>
More Musings: <a href="http://varud.com" target="_blank">varud.com</a><br>
About Adam: <a href="http://www.linkedin.com/in/adamcnelson" target="_blank">www.linkedin.com/in/adamcnelson</a><br>
<br>
<br>
On Wed, Feb 19, 2014 at 3:00 PM, Ali Hussein <<a href="mailto:ali@hussein.me.ke">ali@hussein.me.ke</a>> wrote:<br>
<br>
> Kivuva<br>
><br>
> Good point on the motor industry.<br>
><br>
> In my previous life :) I used to work in the motor industry at Lonrho<br>
> Motors as a Market Analyst.<br>
><br>
> The government then had a % (can't remember the act percentage) local<br>
> content mandatory rule for commercial vehicles. As a result there emerged a<br>
> local content industry that exists to date that did body work, upholstery,<br>
> shocks, nuts and bolts etc..The beginnings of what is know as OEM (Original<br>
> Equipment Manufacturers). A lot of that is now lost because of ill-informed<br>
> blanket free market reforms driven by the IMF. (trust me when I say that no<br>
> western or eastern country has blanket free market economies except<br>
> Africa!). This thinking in the motor industry is what informed the growth<br>
> of the Japanese Motor Industry through deliberate policy moves by their<br>
> MITI (Ministry of international Trade & Industry).<br>
><br>
> We in Africa have the opportunity to not allow ourselves to be encumbered<br>
> by legacy thinking of old school economic theories of comparative advantage<br>
> etc. We can learn and discard and ensure we get the best of both worlds.<br>
><br>
> Ali Hussein<br>
><br>
> +254 0770 906375 / 0713 601113<br>
><br>
> "I fear the day technology will surpass human interaction. The world will<br>
> have a generation of idiots". ~ Albert Einstein<br>
><br>
> Sent from my iPad<br>
><br>
> On Feb 19, 2014, at 12:52 PM, Kivuva <<a href="mailto:Kivuva@transworldafrica.com">Kivuva@transworldafrica.com</a>> wrote:<br>
><br>
> Thank you Machuhi, Lucy, Muraya and Ali for supporting that line of<br>
> thought.<br>
><br>
> Adam, take time I walk you round our shopping centres around the country.<br>
> You will find thousands of educated youths hanging around with nothing<br>
> todo. They would appreciate working in some plant than wasting their years.<br>
><br>
> And knowledge economy is good, but before we reach there what shall we be<br>
> doing?<br>
><br>
> Lets take a model African country doing manufacturing. Many of the major<br>
> multinational firms use South Africa to source components and assemble<br>
> vehicles for the local and international markets. The sector is one of<br>
> South Africa's most important, contributing at least 6% to the country's<br>
> GDP and accounting for almost 12% of South Africa's manufacturing exports,<br>
> making it a crucial cog in the economy. In 2010, 271 000 vehicles were<br>
> exported. More than 28 000 people are directly employed in automotive<br>
> manufacturing, with 65 000 employed in the component manufacturing<br>
> industry. About 200 000 are employed in retail and aftermarket activities,<br>
> with 6 600 employed in the tyre manufacturing industry. Read more:<br>
> <a href="http://www.southafrica.info/business/economy/sectors/automotive-overview.htm#.UwR7b_m9m7I#ixzz2tl8lPOrm" target="_blank">http://www.southafrica.info/business/economy/sectors/automotive-overview.htm#.UwR7b_m9m7I#ixzz2tl8lPOrm</a><br>
><br>
><br>
> Nobody should tell us we can only be mass consumer, we too, can add value<br>
> to the chain, and decide our own destiny.<br>
><br>
> ______________________<br>
> Mwendwa Kivuva, Nairobi, Kenya.<br>
> <a href="http://twitter.com/lordmwesh" target="_blank">twitter.com/lordmwesh</a><br>
> google ID | Skype ID: lordmwesh<br>
><br>
><br>
> On 19 February 2014 00:02, Lucy Kimani <<a href="mailto:lkimani@yahoo.com">lkimani@yahoo.com</a>> wrote:<br>
><br>
>> Murigi,<br>
>><br>
>> I am with you on this one, I seem to recall the University of Nairobi<br>
>> being challenged engage in capacity building, but if the <a href="http://go.ke" target="_blank">go.ke</a> does not<br>
>> provide an enabling environment then that will be for null. The more<br>
>> things change in Kenya the more they remain the same, the <a href="http://go.ke" target="_blank">go.ke</a> should<br>
>> be using all their bags of tricks to level the playing field, and create<br>
>> new jobs for the youth. I see this as a lost opportunity at building<br>
>> capacity and investing in an industrial manufacturing foundation be it for<br>
>> laptops or even tablets as has been stated severally. The most developed<br>
>> of countries aka USA still has young people working on assembly lines,<br>
>> this would definitely be preferable to being unemployed, ask the youth who<br>
>> cant find a job anywhere these days.<br>
>><br>
>> Very disappointed in The Ministry of Information and Communication who<br>
>> are MIA in this very important discussion, and many others as I have<br>
>> pointed out previously leaving a void as representatives of the digital<br>
>> <a href="http://go.ke" target="_blank">go.ke</a> your silence on this very important issue is deafening. I thought<br>
>> your mission was to and I quote "To develop Kenya as a globally<br>
>> competitive and prosperous nation by creating an enabling environment that<br>
>> encourages and enhances the development, expansion and use of Information<br>
>> Communications Technologies (ICTs)."<br>
>><br>
>> On Wednesday, February 19, 2014 9:44 AM, S.M. Muraya <<br>
>> <a href="mailto:murigi.muraya@gmail.com">murigi.muraya@gmail.com</a>> wrote:<br>
>> If Asians listened to Western doubts about their prospects and<br>
>> potential, they would not have the manufacturing capabilities they do today.<br>
>> China imports raw materials from Africa, and like them, we should not<br>
>> give our children a chance to learn to transform these into other products?<br>
>> First we build labs (mini factories) then...<br>
>> On Feb 19, 2014 9:00 AM, "Adam Nelson" <<a href="mailto:adam@varud.com">adam@varud.com</a>> wrote:<br>
>><br>
>> Keep in mind though that supporting industry and helping kids with a<br>
>> final product are two independent things. The more money that goes into<br>
>> spinning up a manufacturing capacity, the less money that goes into getting<br>
>> the technology to the kids. Kenya can't magically produce laptops cheaper<br>
>> than China can.<br>
>><br>
>> Kenya has no chance of having a meaningful laptop assembly capacity<br>
>> because it doesn't have the economies of scale that South East Asia has.<br>
>> Europe and the US are giving lots of technology to their children and none<br>
>> of that stuff is produced in-country because manufacturing plants can't<br>
>> exist in isolation.<br>
>><br>
>> A laptop assembly plant is just one of dozens of plants (chemical<br>
>> manufacturing, plastic-shaping, aluminum foundries, LED, etc...) needed in<br>
>> close proximity to eachother just to create the first laptop. Having a<br>
>> laptop assembly plant in Kenya and all the preceding plants stay in China<br>
>> isn't economically viable. And also, if the plant is only creating a few<br>
>> million laptops, it's doubly not viable. It has to produce more like<br>
>> 10M/year and in order to do that and so the plants would need to export<br>
>> those laptops. Where are these laptops going to be exported to and how?<br>
>> Is a typical Rwandan going to buy a Kenyan laptop over a Chinese one?<br>
>> Maybe, just maybe, with a solid $5-$10B of pure investment Kenya could get<br>
>> a real industry going but then to what end? Computer manufacturing has<br>
>> already plateaued (currently one computer produced for every 20 people each<br>
>> year) and it's agreed that future growth will happen in tablets and mobiles<br>
>> where most of the value is in commodities and intellectual property, not<br>
>> assembly line labor. Tablet sales are already 60% of computer sales and<br>
>> the industry is seeing 50% YoY growth.<br>
>><br>
>> Kenya has all the raw ingredients to leapfrog manufacturing and go<br>
>> straight to a knowledge economy - it just needs to invest deeply in its<br>
>> children through strong, universal education. Having young people working<br>
>> on assembly lines is not a way to empower youth.<br>
>><br>
>><br>
>><br>
>> --<br>
>> Kili - Cloud for Africa: <a href="http://kili.io" target="_blank">kili.io</a><br>
>> Musings: <a href="http://twitter.com/varud" target="_blank">twitter.com/varud</a> <<a href="https://twitter.com/varud" target="_blank">https://twitter.com/varud</a>><br>
>> More Musings: <a href="http://varud.com" target="_blank">varud.com</a><br>
>> About Adam: <a href="http://www.linkedin.com/in/adamcnelson" target="_blank">www.linkedin.com/in/adamcnelson</a><br>
>><br>
>><br>
>> On Tue, Feb 18, 2014 at 10:12 PM, S.M. Muraya <<a href="mailto:murigi.muraya@gmail.com">murigi.muraya@gmail.com</a>>wrote:<br>
>><br>
>> They are taking electricity to thousands of schools to make this project<br>
>> work.<br>
>><br>
>><br>
>> <a href="http://mobile.nation.co.ke/News/Electricity+and+stores+pledge+in+laptops+plan/-/1950946/1978754/-/format/xhtml/-/adm3ge/-/index.html" target="_blank">http://mobile.nation.co.ke/News/Electricity+and+stores+pledge+in+laptops+plan/-/1950946/1978754/-/format/xhtml/-/adm3ge/-/index.html</a><br>
>><br>
>> Have noted in the past, the ecosystem effects are significant, even if<br>
>> the laptops fail to increase interactive learning.<br>
>><br>
>> The power of Go.Ke to demand electronic assembling plants has also<br>
>> significantly increased.<br>
>><br>
>> Regards<br>
>><br>
>> Murigi / Stanley Muraya<br>
>><br>
>> *"Better a patient person than a warrior, one with self-control than one<br>
>> who takes a city." Prov 16:32*<br>
>><br>
>><br>
>> On Tue, Feb 18, 2014 at 8:24 PM, Sean Moroney <<a href="mailto:seanm@aitecafrica.com">seanm@aitecafrica.com</a>>wrote:<br>
>><br>
>> Here, here, Adam.<br>
>><br>
>> The entire project is garbage, from beginning to end, but unfortunately<br>
>> rational thought and action are not given priority in politics.<br>
>><br>
>> Imagine what could have been achieved if the laptop budget had been<br>
>> allocated to capacity building for teachers, and developing secure<br>
>> solar-powered computer labs for all school years to use.<br>
>><br>
>> Sean Moroney<br>
>> *Chairman*<br>
>> *AITEC Africa*<br>
>><br>
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>> begin_of_the_skype_highlighting +233(0)57-0445059 FREE<br>
>> end_of_the_skype_highlighting*<br>
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>><br>
>> *From:* kictanet [mailto:<a href="mailto:kictanet-bounces%2Bseanm">kictanet-bounces+seanm</a>=<br>
>> <a href="mailto:aitecafrica.com@lists.kictanet.or.ke">aitecafrica.com@lists.kictanet.or.ke</a>] *On Behalf Of *Adam Nelson<br>
>> *Sent:* 18 February 2014 15:00<br>
>> *To:* Sean Moroney<br>
>> *Cc:* KICTAnet ICT Policy Discussions<br>
>> *Subject:* Re: [kictanet] HP says laptop bid price changed to favour<br>
>> rival Olive<br>
>><br>
>> We're ignoring the elephant in the room. Both vendor's laptops are<br>
>> going to be garbage.<br>
>><br>
>> With that kind of budget, tablets are the only way to go. Anyway,<br>
>> tablets are so much more sensible from a pedagogical point of view as well<br>
>> as a battery life (10 hours vs 1) and durability standpoint (you can drop a<br>
>> tablet on a cement floor from 2 feet and the screen might crack but it can<br>
>> be taped up and works fine).<br>
>><br>
>> Even Apple iPads are only $300 retail nowadays and surely the<br>
>> government could get them for $200 or even $150 since Apple's CSR team<br>
>> would be all over themselves to make the sale. No ICT support would be<br>
>> required and everything would 'just work' as long as the theft and breakage<br>
>> rate is kept reasonable.<br>
>><br>
>> If anybody in the government could do anything innovative with this<br>
>> thing, it would catapult their career to the national and international<br>
>> stage.<br>
>><br>
>> --<br>
>> Kili - Cloud for Africa: <a href="http://kili.io" target="_blank">kili.io</a><br>
>> Musings: <a href="http://twitter.com/varud" target="_blank">twitter.com/varud</a> <<a href="https://twitter.com/varud" target="_blank">https://twitter.com/varud</a>><br>
>> More Musings: <a href="http://varud.com" target="_blank">varud.com</a><br>
>> About Adam: <a href="http://www.linkedin.com/in/adamcnelson" target="_blank">www.linkedin.com/in/adamcnelson</a><br>
>><br>
>> On Tue, Feb 18, 2014 at 5:36 PM, Ngigi Waithaka <<a href="mailto:ngigi@at.co.ke">ngigi@at.co.ke</a>> wrote:<br>
>> If this line is true,<br>
>><br>
>> "*...The technology firm further says it was invited through a letter<br>
>> dated December 6, but which was delivered on the morning of negotiations,<br>
>> allowing them no time to prepare...*."<br>
>><br>
>> Then you know HP is being played for sucker, and I think they are....<br>
>> The only option on the table, prepare themselves for a Judicial Review<br>
>> (Takes about a year to conclude), PPARB decisions IMO are not based on<br>
>> substance, and if they are, its of a different kind!<br>
>> Waithaka Ngigi<br>
>><br>
>> On Tue, Feb 18, 2014 at 5:21 PM, S.M. Muraya <<a href="mailto:murigi.muraya@gmail.com">murigi.muraya@gmail.com</a>><br>
>> wrote:<br>
>><br>
>> What did Olive Telcom offer in terms of local assembly/support,<br>
>> maintenance and connectivity?<br>
>><br>
>> <a href="http://www.businessdailyafrica.com/HP-says-tender-team-rigged-pricing-of-laptops-for-rival/-/539546/2210772/-/view/printVersion/-/4t0eatz/-/index.html" target="_blank">http://www.businessdailyafrica.com/HP-says-tender-team-rigged-pricing-of-laptops-for-rival/-/539546/2210772/-/view/printVersion/-/4t0eatz/-/index.html</a><br>
>> HP says laptop bid price changed to favour rival Olive<br>
>> IN SUMMARY<br>
>> * HP says Olive Telecommunications had on December 13 quoted a price of<br>
>> Sh23.1 billion as its final offer.<br>
>> * Computer maker also claims Olive and Haier are associates that should<br>
>> not have been allowed to place separate bids.<br>
>> * The allegations add to the controversy that has stalked procurement<br>
>> of laptops for primary schools.<br>
>> Senior government officials colluded with executives of an Indian company<br>
>> to inflate prices for the controversial laptops tender by as much as Sh1.4<br>
>> billion after the final bids were made, it has emerged.<br>
>> American computer maker Hewlett Packard (HP) says Olive<br>
>> Telecommunications -- the Indian company that won the tender to supply the<br>
>> laptops -- had on December 13 quoted a price of Sh23.1 billion ($268,899,<br>
>> 669) as its final offer.<br>
>> But Education secretary Jacob Kaimenyi later announced that Olive<br>
>> Telecommunications had won the tender to supply the laptops at a price of<br>
>> 24.5 billion ($284,814,957) without reference to the alterations.<br>
>> "It is clear from the foregoing that the procuring entity amended the<br>
>> total price quoted by the successful bidder and which was read out at the<br>
>> opening of BAFO (Best and Final Offer) and awarded it (Olive) the sum of<br>
>> $15,914,288 (Sh1.4 billion) more than it had actually quoted," says HP in<br>
>> documents filed Thursday before the Public Procurement Administrative<br>
>> Review Board (PPARB).<br>
>> HP also alleges that Olive and rival bidder Haier, which was among the<br>
>> three shortlisted bidders for the supply of 1.3 million laptops, are<br>
>> related companies that should never have been allowed to submit competing<br>
>> bids meant to lock out rivals.<br>
>> According to HP, the tender committee should have disqualified Olive and<br>
>> Haier Group's applications on grounds that the two companies are related<br>
>> and could not place separate bids.<br>
>> "To the procuring entity's knowledge the said two companies had<br>
>> previously entered into a joint venture to form Haier Telkom (India), a<br>
>> company that is still active," says HP.<br>
>> The allegations add to the controversy that has stalked procurement of<br>
>> laptops for primary schools.<br>
>> HP accuses the tender committee of colluding with Olive Communications to<br>
>> undermine rival bidders.<br>
>> The American firm claims that Ministry of Education officials allowed<br>
>> Olive to submit an incomplete price list that left room for price<br>
>> manipulation and enabled the Indian firm to overtake it [HP] as the lowest<br>
>> bidder.<br>
>> In an application filed through Nairobi law firm Iseme Kamau and Maema<br>
>> Advocates, HP says procurement of the laptops has been shrouded in secrecy<br>
>> that has irredeemably compromised the award.<br>
>> HP accuses the tender evaluation committee of disclosing the price quoted<br>
>> by the bidders and in effect allowing price comparison and undercutting -- a<br>
>> claim that if proved will cast doubt on the entire process.<br>
>> The American company says it was the lowest bidder when the financial<br>
>> offers were opened on December 6, having offered to supply the 1.28 million<br>
>> laptops for Sh25 billion compared to Haier Electrical's Sh27.2 billion and<br>
>> Olive Communications' Sh27.2 billion.<br>
>> All prices were subject to further negotiations.<br>
>> HP claims that the tender committee used every opportunity to release<br>
>> confidential information in the bid documents to competing firms it says<br>
>> were sister companies used to undercut its offer.<br>
>> "Release of the said information created the very mischief sought to be<br>
>> prevented by Section 44 of the (Public Procurement and disposal) Act," HP<br>
>> says, adding that rival bidders used the unit prices to undercut the<br>
>> applicant.<br>
>> Meyrin Branch, who oversees HP's corporate accounts, says in an affidavit<br>
>> that only his company's application should have been subjected to further<br>
>> evaluation, including price negotiations, and that the tender committee<br>
>> should only have engaged rival bidders in the event that the talks<br>
>> collapsed.<br>
>> Instead, the tender committee invited all bidders to price negotiations<br>
>> on December 10 at Windsor Golf Club against HP's expectation.<br>
>> The technology firm further says it was invited through a letter dated<br>
>> December 6, but which was delivered on the morning of negotiations,<br>
>> allowing them no time to prepare.<br>
>> Each firm held separate negotiations with the tender committee during<br>
>> which they were asked to reveal their BAFO.<br>
>> "The mode of negotiation adopted made it very possible for information of<br>
>> a particular bidder to be disclosed to others with the aim of sabotaging<br>
>> certain bidders," says HP.<br>
>> Ministry of Education officials are alleged to have failed to define the<br>
>> scope of negotiations to participating bidders and instead confronted them<br>
>> with questions at the meeting.<br>
>> The tender committee is also accused of refusing to supply HP with the<br>
>> minutes of the negotiations or even a summary of what transpired.<br>
>> The information was needed for purposes of filing the appeal.<br>
>> HP later learnt on December 13 that following the price negotiations,<br>
>> Olive had dislodged it from top position with an offer of Sh23.1 billion, a<br>
>> reduction of Sh4.1 billion from its initial offer of Sh27.2 billion.<br>
>> The American computer maker was then left in the second lowest bidder's<br>
>> position with a price of Sh24.8 billion while Haier was last with a final<br>
>> offer of Sh25 billion.<br>
>> "It was therefore surprising when on February 7, 2014... Prof Jacob<br>
>> Kaimenyi announced that Olive Telecommunication had been awarded the tender<br>
>> at Sh24.6 billion," says HP.<br>
>> HP also claims that the committee declined to consider its offer to<br>
>> provide value-added services to the tune of Sh4.4 billion free of charge.<br>
>> It says the tender committee should have disqualified Olive and Haier<br>
>> Group's application on grounds that the two companies are related and<br>
>> should not have placed separate bids.<br>
>> The details emerged even as the parliamentary committee investigating the<br>
>> laptops for schools tender called on the government to suspend signing of<br>
>> the contract.<br>
>> The MPs argued that Olive is a small company that partnered with another<br>
>> firm called CMC to tender for the laptop and that it is not an original<br>
>> equipment manufacturer (OEM).<br>
>> The MPs' claims give credence to HP's argument that the committee<br>
>> breached one of the requirements that limited bidding to OEMs.<br>
>> The parliamentary committee has accused Prof Kaimenyi of awarding the<br>
>> tender even before the due diligence report on the winning company is<br>
>> scrutinised.<br>
>> MPs are expected to independently investigate the matter and produce a<br>
>> report.<br>
>> Ministry of Education officials are also accused of rejecting HP's bid<br>
>> for the supply of projectors on grounds that it is not an OEM for<br>
>> projectors even as it accepted Olive's bid for laptops.<br>
>> "Since the requirement that bidders must be OEMs was specifically set out<br>
>> in the tender documents, HP accepted the decision (to reject its bid for<br>
>> projectors) and reasonably expected that similar criteria would be used in<br>
>> respect of other bidders," HP says.<br>
>> The government in October re-advertised for the supply of laptops,<br>
>> printers and projectors to public schools in fulfilment of Jubilee<br>
>> alliance's campaign manifesto.<br>
>><br>
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>><br>
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>><br>
>> *Wait**haka Ngigi*<br>
>> Chief Executive Officer | Alliance Technologies | MCK Nairobi Synod<br>
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>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform<br>
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>><br>
>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform<br>
>> for people and institutions interested and involved in ICT policy and<br>
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>><br>
>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform<br>
>> for people and institutions interested and involved in ICT policy and<br>
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>> sector in support of the national aim of ICT enabled growth and development.<br>
>><br>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors<br>
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>> share knowledge, don't flame or abuse or personalize, respect privacy, do<br>
>> not spam, do not market your wares or qualifications.<br>
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>><br>
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>> sector in support of the national aim of ICT enabled growth and development.<br>
>><br>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors<br>
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>> share knowledge, don't flame or abuse or personalize, respect privacy, do<br>
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><br>
><br>
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><br>
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><br>
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><br>
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</blockquote></div><br><br clear="all"><br>-- <br>Regards,<br><br>Yusuf. Tajbhai
</div>