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Tender court case against Zimbabwe's NetOne withdrawn

By , Journalist
Zimbabwe , 25 Mar 2014

Tender court case against Zimbabwe's NetOne withdrawn

A South African businessman contesting the awarding of a $200 million network upgrade tender for Zimbabwe’s state owned telecommunications company, NetOne to Huawei has withdrawn his court case seeking reversal of the deal, ITWeb Africa has established.

NetOne has around 2 million mobile subscribers and has suffered retarded growth, with experts citing government interference in the company’s operations.

Tafadzwa Muguti, a Zimbabwean born businessman now based in Johannesburg who runs Secure Dynamix, took the State Procurement Board (SPB) in Zimbabwe and NetOne to court saying the awarding of the tender to Huawei was irregular. He wanted the deal reversed.

Sources in Zimbabwe have now told ITWeb Africa that Muguti last week withdrew his court case. However, it was not immediately clear why Muguti had withdrawn the court case.

“The case was withdrawn last week and it paves the way for the network expansion to start. NetOne has vast potential and the court case was stalling progress to revamp the company and its capacity,” said one knowledgeable source.

NetOne managing director, Reward Kangai, has confirmed the withdrawal of the court case challenging the company and the state procurement board tendering process for NetOne’s network expansion.

He told China’s ambassador to Zimbabwe, Lin Lin and Zimbabwe’s deputy minister for ICT, Postal and Courier Services, Dr Win Mlambo during a caucus meeting on the sidelines of Huawei’s roadshow in Harare yesterday that the withdrawal of the court case now paved the way for the two governments to proceed with the signing of a $218 million loan deal for broadband expansion in Zimbabwe.

“We are delighted about developments. The risk for the loan has been removed. Things can now start moving,” said Kangai.

The loan will be disbursed by a Chinese state linked bank, China Exim Bank. NetOne’s mobile broadband internet platforms will also be revamped using money from the Chinese loan to Zimbabwe.

Mlambo has now advised Kangai and his management executives at NetOne to “think ahead” and decide how they will move forward “once the loan has been signed” following the withdrawal of the court case against Huawei.

“Look at how do we move forward and how do we maximise on the loan; thinking about doing more for the same amount,” said Mlambo

The Chinese ambassador to Zimbabwe said he would push for the signing of the loan deal as soon as possible. The loan deal had been stalled owing to the court case.

“For me I have no problem; I will try to push,” he told the Zimbabwean officials during a caucus meeting held on the sidelines of the roadshow launch and attended by ITWeb Africa. The meeting was also attended by the chief executive officer of state fixed phone operator, Chipo Mutasa.

The court between Muguti, NetOne and the SPB was supposed to have resumed last week. It is reliably understood that the government is now set to officially write a letter this week seeking the resumption of preparations for the signing of the $218 million loan deal for NetOne.

“We need the court withdrawal papers which we will annex to the letter to his excellence, ambassador Lin,” Mlambo instructed Kangai during the meeting.

Muguti originally launched the court case over questions about how Huawei won a $200 million dollar network upgrade deal for state-owned NetOne without going through a public tender. He also sought to establish why the SPB allowed the deal to go ahead even though documents had revealed that the board had concerns over Huawei’s pricing.

However, Huawei has always denied the alleged corruption regarding the awarding of the deal.

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