SA firm sweats to recover NetOne debt


South Africa telecommunications consultant company, Megawatt Energy (Private) Limited, has sought government intervention to recover the $4 million it is owed by NetOne and Huawei Technologies.


Through its lawyers, Bere Brothers, Megawatt, wrote to Information Communication Technology (ICT) and Cyber Security ministry permanent secretary, Sam Kundishora on April 30, threatening legal action against the two firms.

The ICT ministry facilitated a deal that enabled Megawatt Energy to negotiate a downward review of the $218 million NetOne mobile broadband project from Huawei Technologies, saving $30 million.

Megawatt was entitled to a 10% commission and additional service fees of $1 million

The consultancy firm threatened to also make public a “potentially scandalous and corrupt” deal, where the contract for $218 million had been overpriced by more than $120 million.

The alleged contract was signed by former NetOne CEO, Reward Kangai in 2014.

“We are advised by our client that our client was appointed by your ministry to conduct an investigation and if possible negotiate a rebate or refund for overcharged contracts between NetOne and Huawei Technologies,” Bere Brothers wrote.

“Our client proceeded to conduct the investigation as assigned and indeed proved that NetOne Cellular had been overcharged. As a result of the work done by our client, NetOne realised a saving of $30 million on the NMBB phase II project, which they had contracted Huawei Technologies.”

According to the letter, the parties had agreed to resolve the matter amicably in view of the relationship between the Zimbabwean and Chinese governments and also to shield the public away from a potential scandal arising from the findings by Huawei Technologies.

Bere Brothers said even up to now, the desire was to have the matter resolved amicably without resorting to courts in order to avoid exposing the details of the contract to the public domain.

“Our client has on several occasions engaged NetOne in a bid to secure payment. An agreement was signed between NetOne and Megawatt in April 2017 wherein our client accepted a varied payment which was due on or before July 31, 2017, failing which the full amount of $4 million would be due again.

“By copy of this letter, we have been instructed by our client to seek your office’s intervention in ensuring that this matter was resolved amicably within the next 14 working days failing which our client shall proceed to institute recovery proceedings against your ministry, NetOne and Huawei jointly and severally liable without further notice to you and or NetOne and Huawei,” the letter added.

Minutes of the negotiations gleaned by NewsDay showed ICT minister Supa Mandiwanzira has a role in bringing the parties together, so that the details of the NetOne and Huawei scandal would not jeopardise their own reputations.


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