Earlier this week the Minister of ICT, Supa Mandiwanzira informed the Parliamentary Portfolio Committee on ICT that NetOne, a state-owned mobile operator had been prejudiced of $78 million in an overpriced deal with Huawei.
The information has drawn a lot of criticism from observers who are questioning the transparency in major State telecoms deals and in our article we also questioned other transactions that have been negotiated between State institutions and service providers like Huawei.
Responding to the concerns that have been raised about its own $98 million fibre project, TelOne, another state-owned telecoms entity recently took steps to guard against the likelihood of it being a victim of overpricing.
The telecoms operator engaged a global consultancy firm which is a unit of Orange Group of France called Sofrecom. This outfit has been tasked with examining TelOne’s network and equipment requirements and benchmark prices to ensure that best value is realised from the US$98 million project contracted to Huawei.
Sofrecom, which was contracted in March 2016, is expected to take six weeks conducting its evaluation and is anticipated to complete its work before the end of May 2016 leading up to the initiation of the fibre project which has been earmarked for a June 2016 start.
TelOne has expressed confidence in Sofrecom and in a statement made to clarify its position on the issue of project transparency it has said,
…is happy with the work going on and is convinced that the Sofrecom deal is value for money given the level of internationally renowned expertise deployed to the assignment.
That “value for money” is being measured against a $270,000 fee which was paid for Sofrecom’s services.
While the work being done by Sofrecom is yet to be concluded, the amount paid for their services and their visible profile as a consultancy contrasts sharply with the $4 million total that NetOne ended up paying another obscure consultancy firm called MegaWatt Energy for the revalidation of its $218 million broadband project.
This further highlights the shortcomings of NetOne which not only failed to secure a competitive price from Huawei but ended up paying a huge price to assess the project. It also does very little to dismiss the cloud of suspicion that has formed over the mobile operator as it deals with allegations of corruption.
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15 comments
ko techzim can’t u guys do that analysis and consultancy work for chero ka $100 000 hako to save our government some cash apa imi salaries for a year or 2 for whole team matove bho, lets say techzim u are 5 and average salary is $800 so thats $4000 per month or $40 000 per year.so ka1 vakomana taurai na super
Its beyond techzim’s capabilities and technical know-how…
I think you are right, Techzim hapana chavanoziva nezve technical stuff since they are tech blog ofcourse they dont have computer science, IT, hinfo graduates amongst them even if they do this is complicated stuff that needs good research skills, appreciation of benchmarking which is very complicated comparisons of available data. its very complicated mhani
Well, its not just a matter of doing. There is a lot of expertise required especially by people who have had exposure to such kinda projects.
Guy I don’t think here in Zimbabwe we don’t have qualified engineers who can be employed /contracted by TelOne to safeguard all this money what is happening with other operators like Econet? ???????
Its easy sofrecom cd still get a million from huawei to alter figures compared to the 270 grand u r giving them so they will end up with 1.270 mil wild wild world
I doubt it works like that, international consultancy firms like this rely a lot on credibility to get clients and investors alike, they are also based in territories where there is much more robust monitoring. Any bribery scandal will have major consequences than bribery has in these parts, besides, they probably make a lot of money from consultancy fees less bribes.
This is a case of asking someone to tell you the time when infact you are wearing the watch and you are charged premium rates for the service. Or put it simply, foreigners know better syndrome!
the issue here was probarly kuti iwe hako sayahwe ukanzi baah $20000 20 gida mdara 98 million inonzi muhomwe
Anyone who has dealt with planning and deployment of high cost infrastructure projects knows that consultancy companies have to be involved. in this case i think TelOne did a tender and Sofrecom were the best bidder than our local consultants
from the looks of it netone did get overcharged but it seemed this was moe of a recovery type situation not a prior assement so megawatt charged for percentage they proved was overcharged and if it 100million then 4 mil is 4% so seems fair.
Its unfortunate that we cant do such surveys because all Telecom giants Ericsson, Huawei, ZTE etc are all not based in our country let alone our region. It may require years and years to acquire the knowledge to do those surveys because these Telecom giants do not give access to the public about their Operations and etc. Rather, these consultancy Companies are given that data also for marketing purposes or maybe they buy the data at a cost.
Huawei charges different prices for the same equipment depending on the buyer, negotiating ability and volume of equipment you are procuring. Netone simply failed to negotiate. On the negotiating table Huawei inflated prices, recommended to replace all equipment from other vendors though the equipment was still functional and was not even reaching its End of Life and they also proposed that they do a turnkey project, ie, from your design and planning, implementation & rollout with a maintenance contract in place. All this happened yet Netone has a planning team and maintenance team who all went to China for training. So Huawei planned the network with a lot of unnecessary equipment and infrastructure. This was just to make sure the loan is used up. To put it simply, Netone were driving a Honda Fit that costs $4k and they are then given $100k to by a car. Huawei comes in and offers two cars (Nissan NP200), one to replace the Honda Fit which is working fine. Huawei charges you $80k for these two cars and also $20k for maintenance of the cars because they know you have $100k. Netone were not worried because the money was there.
My point is this is not rocket science for Telone. They do not need consultancy when they have planning departments and maintenance teams. These people should know what they want. If you want prices to go down they should plan the network and flight tenders to ZTE and Huawei since the loan is coming in the form of equipment from Chinese companies. But then again just like Netone, Telone is now making the same mistake – Beacuse the money is there
Telone has a technical team which I believe is being led by managers and engineers with evolution plans for their network. They should be the ones negotiating with Huawei and bench-marking their network unless of course incompetence is the order of the day
@ Garikush & Muzukuru Wakule, the US$218 and US$98 was not just marely done anyhow, the loans were take or leave as it was structured that the funds do not leave China, plus like all state entities in my motherland accounts books and cash flows are always in red plus insurance premiums as hatibadhare zvisvinu. With zero investment and FDI the only available routes are zvimbadzo zvega zvega, ie Zisco in kwekwe, SMM etc etc saka tisati tabate mari yacho ie bill kusunurwe mawonini chaiko.