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An APAC Country e-Government Project Alcatel Shanghai Bell 25 Jan, 2005.

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1 An APAC Country e-Government Project Alcatel Shanghai Bell 25 Jan, 2005

2 All rights reserved © 2004, Alcatel Shanghai Bell - 2 - Contents > Method of Project Scoping > Project Business Case Studies > Alcatel’s Integration Capacity > Summary

3 All rights reserved © 2004, Alcatel Shanghai Bell - 3 - Chronicles > June 2003 – Alcatel meeting with APAC Country Min of Comms Initial idea of using Chinese financing for e-gov development > Dec 2003 – Presentation to APAC Country Cabinet Subcommittee for Investment; MU signed between ASB and Min of Comms > Feb 2004 – kick-off of E-gov conceptual framework development > March-May 2004 – detail survey of government applications requirements > June 2004 Completion of Feasibility Report > Sept 2004 Approval of FR by Min Comm, and approval to raise loan application to Chinese government

4 All rights reserved © 2004, Alcatel Shanghai Bell - 4 - Chronicles (cont.) > Oct-Dec 2004 – Detail project scoping and costing > Currently – pending budget allocations and final approval

5 All rights reserved © 2004, Alcatel Shanghai Bell - 5 - A joint planning team Project Planning Committee ASB Gov of APAC Country Integration and Services Cabinet Sub-Cmt M.Comm MoF Other Min. Set up / appoint Project Planning Team Project Plan - Min Comms - Gov CIO - Min Finance - Pub. Svr. Comm. -Prime Min Off. -- … - E-governance - Business analyst - Applications - IT platform - Communications

6 All rights reserved © 2004, Alcatel Shanghai Bell - 6 - Key Concepts for the Project Scoping > Totality Treat three core necessary elements of E-Government development together as a whole > Application-Driven Use the E-Government Applications to drive the overall development and rollout. Ultimately, the spending of public funds should be justifiable through applications, economic returns, and general contribution to the wealth of the society. > Sustainability To position development as a means to create significant demand to sustain the development of local competences in ICT industry.

7 All rights reserved © 2004, Alcatel Shanghai Bell - 7 - e-Government System Architecture > Three essential elements e-Gov Applications: application and services software components IT Platform: data center, application servers and storage Government Info-communications Infrastructure (GII): physical network components GII IT Platform e-Gov Applications

8 All rights reserved © 2004, Alcatel Shanghai Bell - 8 - e-Government Applications Strategy Think Big, Start Small, Scale Fast Strategy: Think Big, Start Small, Scale Fast Companies Office System Government to Government Government to Business Government to Citizen Titles Office System Visitor Permit Extension System TCP Management System E-Filing of tax returns System TradeNet System Licence Registration System GII IT Platform … …… …

9 All rights reserved © 2004, Alcatel Shanghai Bell - 9 - Applications Main Selection Criteria > Revenue generating or capture lost revenues > Improvement in service delivery and productivity Promote public sector “Service Excellence” > Contributing to economic growth/ private investment Improve overall business climate Reduce business cost Attract more investors and businesses > Cost savings Paperless Convergence of voice and data Redeployment of personnel to high-end value-added work

10 All rights reserved © 2004, Alcatel Shanghai Bell - 10 - Project Services Evaluation

11 All rights reserved © 2004, Alcatel Shanghai Bell - 11 - Project Services Evaluation

12 All rights reserved © 2004, Alcatel Shanghai Bell - 12 - Project Proposed e-Services-1 Application of proposed reserve company nameApplication of proposed reserve company name New registration (Sole Proprietorship/Partnership/Limited Company)New registration (Sole Proprietorship/Partnership/Limited Company) Change of Particular (Sole Proprietorship/Partnership/Limited Company)Change of Particular (Sole Proprietorship/Partnership/Limited Company) Return of Allotment of Shares (Limited Company)Return of Allotment of Shares (Limited Company) Increase in Capital (Limited Company)Increase in Capital (Limited Company) De-registration (Sole Proprietorship/Partnership/Limited Company)De-registration (Sole Proprietorship/Partnership/Limited Company) General Search (Sole Proprietorship/Partnership/Limited Company)General Search (Sole Proprietorship/Partnership/Limited Company) Application of proposed reserve company nameApplication of proposed reserve company name New registration (Sole Proprietorship/Partnership/Limited Company)New registration (Sole Proprietorship/Partnership/Limited Company) Change of Particular (Sole Proprietorship/Partnership/Limited Company)Change of Particular (Sole Proprietorship/Partnership/Limited Company) Return of Allotment of Shares (Limited Company)Return of Allotment of Shares (Limited Company) Increase in Capital (Limited Company)Increase in Capital (Limited Company) De-registration (Sole Proprietorship/Partnership/Limited Company)De-registration (Sole Proprietorship/Partnership/Limited Company) General Search (Sole Proprietorship/Partnership/Limited Company)General Search (Sole Proprietorship/Partnership/Limited Company) Companies Office System (G2B) (G2B)

13 All rights reserved © 2004, Alcatel Shanghai Bell - 13 - Project Proposed e-Services-2 Online application of Permit / visa forOnline application of Permit / visa for Visitors (business and leisure)Visitors (business and leisure) Work PermitWork Permit StudentStudent InvestorInvestor Assured IncomeAssured Income Can be done overseas at the visitor’s home country Online extension of Visitor Entry Permit / Work Permit / Visa forOnline extension of Visitor Entry Permit / Work Permit / Visa for Visitors (business and leisure) - allow maximum 2 times online application After which requires to come to Immigration office for interview to assess suitability.Visitors (business and leisure) - allow maximum 2 times online application After which requires to come to Immigration office for interview to assess suitability. Work PermitWork Permit StudentStudent InvestorInvestor Assured IncomeAssured Income Online application of Permit / visa forOnline application of Permit / visa for Visitors (business and leisure)Visitors (business and leisure) Work PermitWork Permit StudentStudent InvestorInvestor Assured IncomeAssured Income Can be done overseas at the visitor’s home country Online extension of Visitor Entry Permit / Work Permit / Visa forOnline extension of Visitor Entry Permit / Work Permit / Visa for Visitors (business and leisure) - allow maximum 2 times online application After which requires to come to Immigration office for interview to assess suitability.Visitors (business and leisure) - allow maximum 2 times online application After which requires to come to Immigration office for interview to assess suitability. Work PermitWork Permit StudentStudent InvestorInvestor Assured IncomeAssured Income Visa/Permit/Extension(G2C)Visa/Permit/Extension(G2C)

14 All rights reserved © 2004, Alcatel Shanghai Bell - 14 - Project Proposed e-Services-3 Application registration of Radio Frequency LicenseApplication registration of Radio Frequency License Renewal of Radio Frequency LicenseRenewal of Radio Frequency License Application registration of Radio Frequency LicenseApplication registration of Radio Frequency License Renewal of Radio Frequency LicenseRenewal of Radio Frequency License Frequency Management System (G2B) (G2B) Ship Registration & Service Fees (G2B) (G2B) Online new registration for ShipOnline new registration for Ship Online renewal for ShipOnline renewal for Ship Online payment for Tonnage FeeOnline payment for Tonnage Fee Online Application for Survey and payment coveringOnline Application for Survey and payment covering Initial SurveyInitial Survey Technical SurveyTechnical Survey Special SurveySpecial Survey Loadline SurveyLoadline Survey Incaling SurveyIncaling Survey Compass CaliberationCompass Caliberation Lifeboat SurveyLifeboat Survey Light Dues FeeLight Dues Fee Online new registration for ShipOnline new registration for Ship Online renewal for ShipOnline renewal for Ship Online payment for Tonnage FeeOnline payment for Tonnage Fee Online Application for Survey and payment coveringOnline Application for Survey and payment covering Initial SurveyInitial Survey Technical SurveyTechnical Survey Special SurveySpecial Survey Loadline SurveyLoadline Survey Incaling SurveyIncaling Survey Compass CaliberationCompass Caliberation Lifeboat SurveyLifeboat Survey Light Dues FeeLight Dues Fee

15 All rights reserved © 2004, Alcatel Shanghai Bell - 15 - Project Proposed e-Services-4 Licensing for Weights & Measurement (G2B) (G2B) Online new registration for Weight & Measurement instrumentOnline new registration for Weight & Measurement instrument Online renewal for Weight & Measurement instrumentOnline renewal for Weight & Measurement instrument Online new registration for Weight & Measurement instrumentOnline new registration for Weight & Measurement instrument Online renewal for Weight & Measurement instrumentOnline renewal for Weight & Measurement instrument

16 All rights reserved © 2004, Alcatel Shanghai Bell - 16 - Project e-Services Benefit For the Ministry of Comms For the Ministry of Comms – Improve productivity – less paper handling – less verification, less data entry – recover delayed revenue – deploy manpower for value added service and complex tasks – Consolidated and consistent data – data accuracy – easy availability For companies/individual For companies/individual – Save time – transacting over Internet – faster and assured turnaround time For Country For Country – attract more companies/tourists – generate more private investment – generate revenue/increase GDP – more employment – more visitor increase spending, multiplier effects – new investment approval process

17 All rights reserved © 2004, Alcatel Shanghai Bell - 17 - e-Government Applications Solutions People Hub EstablishmentHub VehicleHub IndustryHub e-Government Infrastructure Solution G2BG2C G2G I n t e r n e t I n t r a n e t Search My e-Government AuthenticationAlertNews PORTALCONNECT Portal Service Portal Service Application Services / Product & Applications E-Payment Gateway Report Management Forms Generator Workflow System EMail System Directory Services Content Management System Language Translation Authentication/SecurityEmail Session Services Data Integration Document Management System E|GOVTCONSULTING e-HealthCareSolution e-EducationSolution e-TransportationSolution E-TradingSolution e-TelecommunicationsSolution e-UtilitySolution e-Homeland Security Solution e-TaxationSolution e-Land & Property Solution e-LibrarySolution

18 All rights reserved © 2004, Alcatel Shanghai Bell - 18 - e-Government IT Platform Strategy Intranet portal zone – Database / Exchange Servers – Application Servers – Document & Content Management Servers – FTP Servers Restricted zone – Internet Gateway – Web Servers Internet public zone – Intranet Web Servers – E-mail Web Servers – Personal Computers Build a stable, secure, reliable IT platform Key idea: Build a stable, secure, reliable IT platform

19 All rights reserved © 2004, Alcatel Shanghai Bell - 19 - e-Government IT Platform - Planning > Review of the current Data Center infrastructure need to be done: Server Consolidation – Review all the servers that are currently in the data centers E-Gov Storage – Consider storage needs for E-Gov applications E-Gov Backup – Implementing an e-Gov backup is the next logical step E-Gov Applications & Services Continuity – Applications and service continuity is also a consideration, considering backup data centers Network Connectivity System Monitoring E-mail – Streamline Government E-mail system for all departments

20 All rights reserved © 2004, Alcatel Shanghai Bell - 20 - e-Government IT Platform - Target > The E-Government IT platform must be built in a reliable and secure manner, below is what we recommend for IT Platform: Two geographically separate data centre Disaster Recovery, and government operations continuity for critical operations and applications Physical as well data security, virus and Spam prevention and re-action should be considered in the IT platform development Using the extranet (E-Gov Applications/Services) to drive the intranet development Data center MBN Storage&backup Database Server Application Server Web server Network PKI SERVER Firewall Storage&backup Backup data center

21 All rights reserved © 2004, Alcatel Shanghai Bell - 21 - Project Proposed Network Infrastructure (Data Center) A suitable Disaster Recovery Center (DRC), satisfying nodal and geographical redundancy.

22 All rights reserved © 2004, Alcatel Shanghai Bell - 22 - Proposed Improvement (Data Center Infrastructure) > High availability System Improved Performance & Resiliency Scalability Improved Service Level to users > Network Security Network / Host Intrusion Detection System for critical segments; 2-tier firewall structure Remote firewall at each Government site Segregation of network zones base on functionality – Public, DMZ, User, Application, Database, management, Intra-Govt > Network Management Ease of management and troubleshooting

23 All rights reserved © 2004, Alcatel Shanghai Bell - 23 - e-Government Info-communications Infrastructure (GII) > Key concepts: GII should avoid duplicated investment From industry development point of view, should leverage on the development of the GII to be consolidated Network connectivity of government offices and data centers Deploy e-Gov hubs in remote community centers (connectivity to be built under GII program using suitable technologies such as wireless) Introducing Voice and Data convergence to optimize resource utilization and save operational cost

24 All rights reserved © 2004, Alcatel Shanghai Bell - 24 - Project Design Principle for the GII (1/2) > Principles: quality of service, reliability and secure > To build a Broadband Data Backbone for fast switching of Data and Voice traffics. The choice of Ethernet and IP is based on the domination of IP traffic due to the Internet and the ease of building software over an IP network. > To build a data center to accommodate a selection of database, Web, E-mail servers to lay the groundwork for e-Government software applications. Such choice of equipment shall be heavily dependant on the use of the government services that will is subject to this project. > To build a reliable and cost effective voice network. Design of Software to automate work and information flow among government departments firstly, then citizens, businesses and international access.

25 All rights reserved © 2004, Alcatel Shanghai Bell - 25 - Project Design Principle for the GII (2/2) > Leverage on current telecom infrastructure when economically so > In town’s CBD area, interconnect numerous departments by broadband wireless (eg. LMDS) to cut down LL rental cost > Cabling fiber, UTP lines between buildings in the town > Wireless LAN can be considered if some buildings/sites are not suitable for cabling > Long distance data backbone (inter-region) continue to leverage on MW and Optical Fiber Cable > Build virtual PBXs using reliable ATM/TDM/VoIP technology > Set up a high performance network core based on advanced router/switch to support convergence of data and multimedia applications > Through PBX and VoIP devices to provide convenient telephony service

26 All rights reserved © 2004, Alcatel Shanghai Bell - 26 - > Current Status Individual departments/offices subscribe standard phone services for voice/fax communications, which amounting to a substantial OPEX > Solution The solution is to use the same GII to carry intra government voice traffic by introducing a PABX system that supports VoIP > Benefits After making use of VoIP technology and GII, the OPEX cost can be greatly reduced Advanced voice features could be provided on the PABX to improve productivity E-Government GII – Voice & Data Convergence

27 All rights reserved © 2004, Alcatel Shanghai Bell - 27 - E-Government GII – Voice & Data Convergence Intra Government office voice communication over GII

28 All rights reserved © 2004, Alcatel Shanghai Bell - 28 - Contents > Method of Project Scoping > Project Business Case Studies > Alcatel’s Integration Capacity > Summary

29 All rights reserved © 2004, Alcatel Shanghai Bell - 29 - e-Gov Project Benefits Analysis CitizenBusinessGovernment Social Benefit Economic Benefit

30 All rights reserved © 2004, Alcatel Shanghai Bell - 30 - e-Gov Project Social Benefits > Internal Benefits Increasing government efficiency Developing government image Improve government staff ability and productivity Data security Internal communication with online tools > External Benefits Convenience to citizens and visitors Serving the citizen conveniently, 24x7 access to government system without any time limit Improving quality of life Narrowing “digital divide” Contribution to increased GDP and creation of new skills based employment

31 All rights reserved © 2004, Alcatel Shanghai Bell - 31 - e-Gov Project Economic Benefits > e-Gov Project Direct Economic benefits Reduce internal administrative expenses Capturing lost income Reduction in annual telecom expenses More … … > e-Gov Project benefit to GDP growth Benefit to related industry, with indirect positive impact to other related service sectors Creating new industry/service activities in ICT domain: trading, support, service and training Facilitate foreign investments and export thus advancing the total economical activities

32 All rights reserved © 2004, Alcatel Shanghai Bell - 32 - e-Gov Project Business Case - Example Financial Analysis: Key Value Financial Analysis: Key Value > Application 5 applications Voice Communication Improvement > Total Cost: 29,625K$ Total CAPEX: 20,000K$ Total OPEX: 9,625K$ 81,894K$ > Total Benefits: 81,894K$ 27,578K$ ** > NPV: 27,578K$ ** 38.52% > IRR: 38.52% 4 years > Payback Period: 4 years > Time to Positive Cash Flow: 1 year **: Discount Rate is 12% PA

33 All rights reserved © 2004, Alcatel Shanghai Bell - 33 - e-Gov Project Business Case - Example Financial Analysis: Payback Time and Cumulated Net Cash Flow

34 All rights reserved © 2004, Alcatel Shanghai Bell - 34 - e-Gov Project Business Case - Example Financial Analysis: Sensitivity Analysis 1/2

35 All rights reserved © 2004, Alcatel Shanghai Bell - 35 - e-Gov Project Business Case - Example Financial Analysis: Sensitivity Analysis 2/2 > Even if we err on the wrong side, the results are acceptable: OPEX+ (increased by 30%)-- NPV: 25.5 MUSD, IRR: 27.1% Revenue- (reduced by 30%)-- NPV: 11.3 MUSD, IRR: 22.9% Revenue- (reduced by 30%)-- NPV: 11.3 MUSD, IRR: 22.9% > All payback periods remain within 5 years. > Conclusion:The project is highly viable with > Conclusion: The project is highly viable with NPV: 27.5 million USD; IRR: 38.5% NPV: 27.5 million USD; IRR: 38.5%

36 All rights reserved © 2004, Alcatel Shanghai Bell - 36 - e-Gov Project Business Case - Example – Benefit to Investment 1/2

37 All rights reserved © 2004, Alcatel Shanghai Bell - 37 - e-Gov Project Business Case - Example – Benefit to Investment 2/2

38 All rights reserved © 2004, Alcatel Shanghai Bell - 38 - e-Gov Project Business Case – Example – Benefit to Export 1/2

39 All rights reserved © 2004, Alcatel Shanghai Bell - 39 - e-Gov Project Business Case – Example – Benefit to Export 2/2

40 All rights reserved © 2004, Alcatel Shanghai Bell - 40 - e-Gov Project Business Case – Example – Benefit to employment (1/2)

41 All rights reserved © 2004, Alcatel Shanghai Bell - 41 - > Improving of job quality IT does not make existing civil servants redundant It only frees up them from routine, mundane tasks Allow them to be trained for mastering better skills and to tackle higher value-add tasks Provide them an alternative career perspectives in the private sector once they have mastered good IT skills > Attract and retain IT talents e-Gov Project Business Case – Example – Benefit to employment (2/2)

42 All rights reserved © 2004, Alcatel Shanghai Bell - 42 - > e-Gov Project Direct Benefits to IT Industry Create IT consumable wholesale and Retail Industry, such as: PC, software, etc. Create IT training service industry, furthermore the training service also can be exported to other countries. Creating more job opportunities in IT sectors. Create a call center service industry which could be further developed to reap economic benefits from catering to the markets such as Australian and New Zealand and beyond. This is feasible because of the maturity of the information and communication technology and the decline in the cost of such technology. Create a software service industry which could be further groomed to reap economic benefits from catering to the regional markets. This is feasible because software services is relatively easy to be exported. > e-Gov Project Indirect Benefits to IT Industry Improve the IT literacy and competency to support and sustain economic growth in the IT related sectors. E-Gov Project Benefit to IT Industry

43 All rights reserved © 2004, Alcatel Shanghai Bell - 43 - Contents > Method of Project Scoping > Project Business Case Studies > Alcatel’s Integration Capacity > Summary

44 All rights reserved © 2004, Alcatel Shanghai Bell - 44 - Planning Business and Technical Deploy & Integrate Build - Integration Installation - Commissioning Operate & Maintain Managed Services Design & Engineering Full Service Turnkey Broadband Alcatel’s Turnkey Services... > Turnkey service can help…

45 All rights reserved © 2004, Alcatel Shanghai Bell - 45 - Services Integrated, multi-vendor, communication solutions Applications Infrastructure Alcatel offer e-Gov Project Integration Capacity Engineering Procurement Integration Installation Maintenance Project Management Engineering Procurement Integration Installation Maintenance Project Management ASB Third Parties ASB Third Parties ASB Third Parties ASB Third Parties Complete Solution ASB offers e-Gov project integrator & Engineering Services

46 All rights reserved © 2004, Alcatel Shanghai Bell - 46 - Partnership with NCS: A leader for e-Government Nurturing Public Service Innovation Thought Leadership & Research in eGovernment

47 All rights reserved © 2004, Alcatel Shanghai Bell - 47 -  Sri Lankan eGovernment Blueprint  Thailand eCitizen Portal Blueprint  Hong Kong SAR Government Agencies’ IT Masterplan  Singapore Intelligent Island : IT2000 Masterplan  Mauritius Government IT Plan  Malaysia’s Sarawak State Government IT planning  Broadband Infrastructure for Government, Singapore  Singapore Government – Public Service Infrastructure E-Government & Government ICT Planning

48 All rights reserved © 2004, Alcatel Shanghai Bell - 48 - > Status of e-Govt initiatives in 9 Asian economies: Brunei, China, Hong Kong, India, S Korea, Malaysia, Singapore, Taiwan & Thailand > Scope of coverage: vision, strategies, plans, maturity indicators, programmes, etc. > Sharing new perspectives, insights & leading practices on e-Government > Published by Times Media (August 2003) “e-Government in Asia” book

49 All rights reserved © 2004, Alcatel Shanghai Bell - 49 - Contents > Method of Project Scoping > Project Business Case Studies > Alcatel’s Integration Capacity > Summary

50 All rights reserved © 2004, Alcatel Shanghai Bell - 50 - ASB e-Gov Project’s Value ICT technology leader Alcatel’s Products and solutions has global competitiveness in Government networks Global Experience Deep understanding and long-term participation and experience on E-Government and City informatization Consulting Provide professional e-Gov project Strategy & Planning consultation Full range of services The capability to be your prime contractor for full turnkey deployments

51 All rights reserved © 2004, Alcatel Shanghai Bell - 51 - Summary > Both economic and technical analysis show that Asia Pacific Country’s e-government project is feasible, with strong social and economy benefits: > Creating higher efficiency > Offering a versatile variety of services > Reduce cost and capturing a significant range of lost income

52 www.alcatel-sbell.com.cn Thank You!

53 Next Steps 2005-1-27

54 All rights reserved © 2004, Alcatel Shanghai Bell - 54 - Next steps (1): > During the planning stages, Alcatel could offer a series of professional services in the planning of City’s E-Government program covering: > (1) Methodology: – E-Government planning methodology and process This is to ensure a proper approach and process in developing an E-Government program drawing on the lessons and experiences from other similar planning Alcatel had done.

55 All rights reserved © 2004, Alcatel Shanghai Bell - 55 - Next Steps (2) (2) Assessment: – Application requirement assessment – IT infrastructure assessment – Government network infrastructure assessment This is to get an overall understanding of the total needs of government applications, and identify priority applications according to a criteria set by the government Also, to understand the existing infrastructure that could be re- used, or upgraded to fit the needs of new applications

56 All rights reserved © 2004, Alcatel Shanghai Bell - 56 - Next Steps (3) (3) Planning – Applications development and rollout planning – IT platform upgrade and development planning – Government network development planning – Overall costing and budget estimate In this phase of the service, we determine a initial set of applications as a starting point. Use the applications to drive the definition of the rest of the infrastructure development. We will make a high level design of the necessary applications support architecture, and the new IT platform, government network connectivity; In order to arrive at a basic cost structure

57 All rights reserved © 2004, Alcatel Shanghai Bell - 57 - Next Steps (4) (4) Feasibility – Quantify the measurable benefits of the e-government applications, and relate that to the cost of the project; – In order to derive the overall return on investment, and cash flow as well as sensitivity analysis. – Analysis of the direct benefits and impact to GDP growth to the economy

58 All rights reserved © 2004, Alcatel Shanghai Bell - 58 - Next Steps (5) > During project implementation stages: Alcatel could provide full turn-key responsibility to conduct the detail system design, implementation, project management, training; As well as providing professional service on – E-Governance (methodology in managing the successful rollout of E- services, and adapt the internal process and organization to use the new IT infrastructure) – Skills transfer (to ensure City local personnel could sustain the future development without dependency on Alcatel

59 E-Gov Economical Impact 2004-7-25

60 All rights reserved © 2004, Alcatel Shanghai Bell - 60 - Question: > Additional information on benefits of such project to our country’s economy in terms of GDP growth is required to ensure that government in supporting the project is fully aware of the economic benefits that will accrue in implementing that project vis-à-vis the cost of financing it. A table detailing cash flows/savings as well as projected increase in GDP once the project is up and running would be appreciated.

61 All rights reserved © 2004, Alcatel Shanghai Bell - 61 - Answers > We wish to answer this question in two parts: > Firstly in the Project’s own financial viability For this point, the current Feasibility Report has provided an analysis on cash flow, vs direct benefits from the project, estimated internal rate of return for the total investment A summary is re-captured here in > Impact to GDP growth This is harder to assess, but we will make some attempts here And elaborate how we are going to estimate this

62 All rights reserved © 2004, Alcatel Shanghai Bell - 62 - Project’s viability on its own > As presented in Section 6 of the Feasibility Report with details in Appendix 2: > The project is highly viable with a Net Present Value (NPV) of $11.2M, benefit/cost ratio of 1.5:1, and achieving an Internal Rate of Return (IRR) of 14.62%. > Taking some sensitivity analysis into consideration, even the total cost is increased by 10%, the IRR can still stay at 11.37%. > On the other hand, if the total benefit decreased by 10%, the IRR can hold at 8.20%. > For details, please refer to the Feasibility Report

63 All rights reserved © 2004, Alcatel Shanghai Bell - 63 - Impact to GDP Growth > There are many factors contributing to or affecting the GDP growth > In essence, the overall impact to the economy by an E-Gov investment is like that by many other infrastructure investment such as airport, railways, roads, etc. The impact are primarily in the following three aspects: Improving productivity to multiple other sectors Creating new industry/service activities in its own domain Attract foreign investments thus increasing the total economical activities

64 All rights reserved © 2004, Alcatel Shanghai Bell - 64 - Improving productivity to multiple other sectors > We have identified the following sectors being the major GDP generation sectors in the country: Agriculture, Forestry and Fishing Sector Wholesale and Retail Trade Sector Community and Social Services Sector Finance and Insurance Sector Manufacturing Sector Transport, Storage and Communication Sector > By drawing upon experiences and modeling in other countries and regions, we will see if we could formulate a quantitative assessment on the impact of E-Gov to the above sectors > But, this will take a lot of time and need to collect a lot of information on various industry sectors

65 All rights reserved © 2004, Alcatel Shanghai Bell - 65 - Creating new industry/service activities in its own domain > The direct impact of the E-Gov investment is to creation of relevant supporting industry in Information Communications Technologies > These include but not limited to: ICT consulting, planning, architecting (including export to regional countries) Software applications planning, design, development, customization, upgrading and maintenance (export possible) IT education and training (Export possible) IT supply and reselling (Export/trading possible) Equipment and facilities maintenance > Again, based on the references and benchmarks elsewhere, we could formulate an assessment for the country

66 All rights reserved © 2004, Alcatel Shanghai Bell - 66 - Attract foreign investments > There are many factors together collectively help to increase the competitiveness of the country as a hub for the region and to attract foreign investments, such as: Social and political stability Legal system and transparency Transportation, logistics, infocommunications Financial services (banking, insurances) Utility (power, gas, water) > E-Government could only play a relatively small role in this aspects. It would harder to attribute improvement of foreign investment due to E-Gov

67 All rights reserved © 2004, Alcatel Shanghai Bell - 67 - Summary > In summary, we are of the opinion that The project is on its own a viable investment based on direct benefits The quantification on the impact to GDP would help further recognizing the potential strategic value of the project, but The GDP growth also depends on many other factors not related to ICT and E-Government. It could be primarily set by the overall macro economic conditions for the country, the Region, even the global economy as a whole

68 E-Gov Operational Model 2004-7-15

69 All rights reserved © 2004, Alcatel Shanghai Bell - 69 - Contents > E-Government Operational Models in other countries > Discussion and proposal for the E-Government operational model

70 All rights reserved © 2004, Alcatel Shanghai Bell - 70 - Singapore > Early development stages – 1981-1996 National Computer Board (NCB) as the IT agency under the Ministry of Finance Master planning, architect, tender spec, project delivering, user training, customization Nearly 80% of NCB staff were seconded to ministries/departments > Major development stage – 1996-2000 Privatization of the operational arm of NCB to form NCS NCB mission focused on policy and promotions Dec 1999 merger of NCB with Telecom Authority of Singapore (TAS) to form a single ICT agency – Infocomm Development Authority (IDA)

71 All rights reserved © 2004, Alcatel Shanghai Bell - 71 - Singapore (cont.) > Major development stage – 1996-2000 (cont.) Operational model being: – MoF controls budget allocation to ministries/departments for E-Gov spending – IDA acts as CIO, regulatory, program/project management – Provide sectors takes government contracts to execute, deploy and maintain E-Gov infrastructure and applications > Mature stage – 2000-2003 E-Government Action Plan I – S$1.5B for 3 yrs Operational model remained the same > Future development – 2003-2006 E-Government Action Plan II – S$1.3B for 3 years Operational model likely remain the same

72 All rights reserved © 2004, Alcatel Shanghai Bell - 72 - Singapore (cont.) eGov Advisory Panel  > E-Government operational model Ministry of Finance eGov Policy Comm. (eGPC) Infocomm Development Authority (IDA) -Chaired by the Head of Civil Service and comprises Permanent Secretaries of Ministries -Chaired by the Head of Civil Service and comprises representatives from private and public sectors to help steer e-Government effort -CIOs engaged to various ministries

73 All rights reserved © 2004, Alcatel Shanghai Bell - 73 - Singapore (cont.) > Comments on Singapore’s E-Government operational model MoF having the final say, could ensure that all government departments/agencies will be using the common infrastructure, policy and framework as set by IDA, to minimize duplication of efforts & investment. IDA, as the competence centre, acts as project manager to help MoF in managing E-Government initiatives and also as CIO to the entire government

74 All rights reserved © 2004, Alcatel Shanghai Bell - 74 - Comparison of Government-wide CIO Office

75 All rights reserved © 2004, Alcatel Shanghai Bell - 75 - Contents > E-Government Operational Models in other countries > Discussion and proposal for the country’s E-Government operational model

76 All rights reserved © 2004, Alcatel Shanghai Bell - 76 - Priorities > Bringing Government ICT infrastructure up to-date in order to be able to roll out a critical mass of E-Government applications and services > To build a sufficiently large ICT planning, architecture and project management competence and skills > To stimulate the set-up in the private sector ICT business

77 All rights reserved © 2004, Alcatel Shanghai Bell - 77 - E-Government Operational Model > Leverage on current competence and organizational structure of XYZ unit within MoF > Complement that with telecom infrastructure investment as a supporting means > For better coordination, a new agency for Infocomm development could be envisaged under the Ministry of Communications. Comprising XYZ and led by a more aggressive and forward looking leadership (? How to ensure strong backing from MoF) Leaving current telecom department for telecom regulations matters only

78 All rights reserved © 2004, Alcatel Shanghai Bell - 78 - E-Government Operational Model (cont.) > The drawbacks of assigning the telecom operator to develop the entire ICT infrastructure for E-Government Lack of IT and government applications competence Harder to convince all government departments/agencies to follow the same approach, platforms and policies Re-enforcing monopoly resulting in – Less efficiency (due to lack of competition) – higher cost to the government operations, thus hindering return on investment from government point of view

79 www.alcatel-sbell.com.cn


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