NetOne dumped $45m equipment

Lloyd Gumbo Harare Bureau
AS the NetOne saga continues to unravel, new details have emerged showing how the government-owned mobile operator decommissioned new network expansion equipment worth $45 million in order to buy similar equipment using a $218 million loan facility secured from the China Exim Bank in 2014.

The $45 million is from a 2011 loan facility from the China Exim Bank as well.

Some of the duplicated equipment was barely two weeks old when it was decommissioned.

Insiders said NetOne had already started replacing the equipment, some of which was installed as recently as 2015 but with no defects or reported technical challenges at all.

The $218 million facility from the same bank was signed in 2014 during President Robert Mugabe’s state visit to China.

“The microwave link equipment that we bought from the $45 million loan is the one that put us on the map because it transformed our network by about 70 percent in terms of data capability,” said a source.

“But that same equipment, some of which was commissioned less than a year ago, is already being decommissioned and replaced with the same equipment for all the links from the current $218 million facility. Some of the equipment is just switched off and left on the sites despite the fact that it’s still fairly new.

“For example Base Band Processing Unit 3900 has eight slots and normally only one slot is used but now another unit is being bought all in the name of network upgrade.

“There’s also recently installed equipment from the $45 million loan facility that we only needed chips to do the upgrade but in this case they’re buying the whole set which was unnecessary.

“My understanding is that we’re yet to repay the $45 million loan but we’re already decommissioning that equipment. There’s definitely more than meets the eye in the procurement processes of the management.”

Huawei Technologies of China is the one implementing both projects.

“On the new project, Huawei requested from NetOne for a list of the new sites where the new equipment was supposed to go. They were told to replace the existing ones regardless of the fact that some of them were barely a month old.

“For example, generators that are still working well are all being replaced with new ones despite the fact that some of them have just been commissioned such as the one at Jamaica Inn (along Harare-Mutare highway).

“We also have outdoor equipment that can withstand outside temperatures now being turned into indoor. What it means is that by making outdoor equipment, indoor, you now have to put a building such as a container and air conditioners.

“All this was done in order to create room for management to have a share from the loan through creation of unnecessary expenditures,” said the source.

Another source added: “Nokia Siemens installed base stations at 25 sites for 3G in Harare in 2011. They also came in 2014 to install at other sites. There was also another deal that they would donate flex-BSC (Base Station Controller) on condition that NetOne would buy after testing it.

“But all this equipment is already being decommissioned including the one that was installed in 2014. It was decommissioned in 2015 and replaced with equipment from the current loan which is generally the same with what was already there.

“But Nokia Siemens is still installing equipment at the Gwebi and Nyabira sites. The question is, for how long will that equipment work because everything that they’ve installed is being decommissioned and replaced with equipment from the $218 million loan facility despite meeting the same specifications. Mind you, NetOne pays cash to Nokia Siemens for that equipment. So effectively, the money is going down the drain.”

The source said there was also another deal with NEC of Japan to install micro cells at busy places or traffic hotspots such as the airport.

“What’s the logic of having those micro cells when we recently upgraded our network and the fact that there’s an ongoing expansion project under the $218 million loan?

“What’s clear is that these were just money-making ventures that were used to siphon money from NetOne. All these things are happening with the approval of a chief technical officer (CTO). The CTO has some questions to answer because it would seem he worked in cahoots with other members of the executive who were looting,” said the source.

Contacted for comment, NetOne board chairperson Alex Marufu said they were still investigating the allegations.

“I don’t have enough information to be able to comment right now. But we’ve initiated a forensic audit into the business and I believe these things will come to the fore,” he said.

There are indications that the mobile operator could have been prejudiced of millions of dollars through illicit procurement by management that was led by suspended chief executive officer, Reward Kangai.

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  • Department 6

    so net1 lost 56 mln dollars (45 equipment & 11 in unpaid debtors) all because of mismanagement/