TelOne has scaled down Fibre Optics Project – Lack of Funding


TelOne has scaled down its modernisation project for fibre optic cable installation awarded to a Chinese company due to delays and non-availability of funding by the contractor.

The $98 million contract meant to upgrade and modernise the network was awarded to Huawei Technologies of China in 2010, but it has taken long to take off due to what TelOne managing director Chipo Mtasa said “are processes here in Zimbabwe as well as in China”.

The scaling-down of the project comes amid allegations from some workers that the project had been overpriced and taken long to hit the ground so that it could give the State utility more revenue streams.

“The $98 million facillity will be maintained, but the scope of work will differ given the depreciation in value of components in the original quote and the aspects of the project that are already being implemented using own resources. Huawei has further committed that prices will be reviewed to prevailing rates as and when the project will finally be implemented, while TelOne will ensure that due diligence is done at all times,” Mtasa said.

Tel One Managing Director Chipo Mtasa
Tel One Managing Director Chipo Mtasa

She said TelOne had been affected negatively by the delay in implementing the project and had now resorted to using its own resources to fund the installation of fibre optic cables throughout the country.

“Having noted the risk of being overcharged by this particular vendor, TelOne independently conducted a thorough benchmarking exercise on prices offered by Huawei and those from ZTE, Fibrehome, China Commserve and Alcatel Lucent. It emerged that Huawei’s pricing is aligned to prices being offered by other players internationally,” she said.

According to workers, the State-owned utility could have breached State procurement laws in awarding Huawei the tender.

But Mtasa said the State Procurement Board was involved in the awarding of the tender to the Chinese, indicating that it was a State-to-State agreement negotiated at governments’ level.

“Due to the delay and the natural depreciation of technological equipment value, we had to do another benchmarking exercise in 2014 which has seen the price of the whole project significantly go down.”

A worker who declined to be named insisted the tender was over-valued, with a South African consultant revealing that the State company was paying a fee inflated by at least 30%.

The worker suggested that the government and the company re-look into the deal and if possible, renegotiate it.