Storm over $200m NetOne deal

LOCAL telecommunications companies are crying foul over NetOne’s decision to award $200 million equipment upgrading contract to a Chinese firm Huawei Technologies without following tender procedures and approval of the State Procurement Board (SPB).

REPORT BY SENIOR REPORTER

The State owned mobile network operator, last year signed a telecoms equipment deal for its base stations and an assortment of other equipment worth over
$200 million with Huawei Technologies, but local operators argued NetOne could have saved at least half the amount had it offered the contract through public tender.

The matter was also discussed by the SPB at its last meeting on Thursday with the board understood to have rejected the move by the government owned entity.
“Without going through a tender process and approval of the SPB, local companies were automatically denied an opportunity to do business,” a source said.
“Through public tender it could have saved at least $100 million for the country.”

Contacted for comment, NetOne managing director, Reward Kangai, said the upgrading of Huawei equipment could only have been undertaken by the same firm.
He, however, could neither confirm nor deny that the awarding of the contract was done without the approval of the SPB.

“There are no local telecommunications equipment manufacturers in Zimbabwe . . . local companies cannot manufacture the required equipment. They will, however, be sub-contracted for the equipment installation, undertaking of civil and structural engineering works pertaining to the passive infrastructure components of the project such as towers, equipment buildings etc. Consultancy work for the civil and structural engineering works will also be provided by local companies, including Environment Impact Assessments required by the proposed loan financiers,” Kangai said.

“We have insisted that Huawei Technologies sub-contract local companies for the services portion of the project, which involves equipment installation, as was done previously for the recently completed $45 million project. This has provided employment opportunities for Zimbabweans.”

He added the whole project was subject to external funding being made available and urged the local media to be supportive as local firms would benefit from the multi-million dollar project.

“The above project is clearly subject to approval by the SPB, which is the final arbiter of such procurements by Public State Enterprises like NetOne and other Government departments,” Kangai said.

14 Comments

  1. Why are local companies crying when they cant manufacture the equipment? They wanted to get the tender, buy from Huawei and then charge twice as going straight to Huawei, I support Netone on this one, talking about mobile phones and companies enjoy my blog here http://www.zimsmartphones.wordpress.com

    1. Do we have local manufacturers of Huawei equipment?

      If the answer is no, The next question is- Do we have local companies with $200 million pool which can finance such deal?

      When the above is considered, how were they going to make it cheaper?

      1. Even in countries like USA don’t have off-the-shelf equipment needed for their advanced systems and they end up acquiring from all over the world. So why restrain progress in Zimbabwe for such a non-issue? Raising funding is a separate issue but seeking most compatible and latest technology is a simple process… through public/private enterprize participation. No government agency can undermine the stand process of acquiring technologies for upgrades or even starting from the scratch. NeOne’s problem lies in its management and operation structure…. too many people doing nothing but collecting their paychecks and over-burdoning the organization. Downsize and re-structure the Company before throwing good money behind hodge-podge of technology. Stay with one dependable system instead of making it a hybrid so future disaster await!

    2. Which largest telecom company can one refers to who manufactures its own equipment? None! So this argument about where and how to obtain the technology is pretty lame. NetOne should consider sticking with type reliable and time-tested manufacturer instead of making it a hybrid system only waiting for the worse future system failures and glitches that may strain already existing systems and sub-systems at NetOne. Responsible management should have allowed the feedback and participation of local Zimbabwean entities to send in their inputs and suggessions if not the participation! It sets a wrong precedent for future developments of Zimbabwe. Nothing wrong with Chinese, American or European manufacturers but expert opinions by those know the technology should’ve given the opportunity to participate in the process of selecting the vendor for such upgrades.

  2. It couldnt have cost twice necessarily, first tenders enable the client to get competitive offers so it would not have necessarily been more costly since it is not guaranteed that they would have bought from huawei. Anyways Huawei is known to spy on countries to telecel thanks a lot u just made it easier for the enemy.

    1. Not known but alleged. Read more on that issue. Even the American media has questioned the CIA over the allegation. FYI most of our telecom s infrastructure is a mixture of Huawei and Siemens FOR ALL NETWORKS

    2. The equipment to be upgraded is already Huawei equipment, is it not?

      1. if Huawei is the only supplier for netone deal, and without a tender procedure, it is easy to become a monopoly supplier and can give any high price without control.

  3. chief chinamhora

    haven’t heard of any local made zim bts, MGW,OCS etc

  4. indiginise. kikikikikikiki

  5. Uku ndookunonzi kudzvanywa padonyangara manje. All arms of the PTCs remain underperforming as far as profitabilites are concerned pre and after tax postings plus the level of the Zimbabwe government’s indebtedness or else chimbadzwa chaicho sezvo chemahara mushana. The Chinese deals are never opaque as they thrive on vulture capitalism in signing their contracts after all all there African deals are always mired in controversies plus batter deals and Zimbabwean parastals are light years away from being rum efficiently and profitably bring value for money for everybody.

  6. the amount is so big,if the procedure is not following the normal tender procedure, there should be some problems. why it is not approved by SPB ? This is another problem.

  7. why not bring more companies? like Ericsson, Alcatel-Lucen or other Chinese suppliers. The more competitors the cost will be more less. I don’t like my money be waste .

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