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BizDay Zimbabwe

SA businessman loses NetOne case


A South Africa-based businessman’s bid to sue Net-One and a Chinese telecommunications equipment producer over a US$250 million network upgrade tender, which he claimed was corruptly awarded to the latter, had his suit dismissed by the Administrative Court for non-appearance.

Huawei Technologies won a US$250 million contract to upgrade Net-One’s equipment and cell-towers as part of the firm’s migration to next-generation mobile broadband offering LTE.

Mr Tafadzwa Muguti had approached the Administrative Court seeking a review of NetOne-Huawei network upgrade contract that was signed in October last year.

He was challenging the legality of the contract.
But on the day the matter was heard, Mr Muguti did not show up. This left Administration Court judge Justice Herbert Mandeya with no option but to grant a default judgment against Mr Muguti.

“It is ordered that in default of appearance by applicant (Mr Muguti), the application for review be and is hereby dismissed,” said Justice Mandeya.

Mr Muguti has now engaged Antonio Law firm, to rescind the court decision.
He argues that he was not served with a notice for hearing, saying it was served on an employee who had been fired and did not bother to inform the relevant authorities about the notice.

“Applicant was therefore unaware of the set down date hence the applicant’s non-appearance was not willful,” argued Mr Muguti in his application for rescission of judgment.

In his application for review, Mr Muguti argued that the tender was never made public for other bidders to compete for it.
He said his firm had a legitimate expectation  of participating  in a procurement tender conducted by the State Procurement Board, cited as the first respondent, for services it has the capacity  of providing.

Mr Muguti further argued that the SPB as an administrative body was obliged to act in a fair and transparent manner. The SPB, he added, was also obliged to ensure that all state bodies conform to the Procurement Act and create a transparent environment between the state and private sector.

Mr Muguti also wanted Net-One and the SPB to explain how and why Huawei won the contract without undergoing a tender process, despite alleged concerns from the board of over-inflated prices.

He further argued that Huawei initially quoted over US$280 million for the project adding that even at US$200 million, Huawei has doubled the price of what the project is worth.

Mr Muguti said in the event the SPB and Net-One fail to explain how the deal came about then the Anti-Corruption Commission of Zimbabwe should be forced to investigate the matter.

Mr Misheck Hogwe, who is representing Huawei, argued that the process was done above board taking into account all the relevant considerations and in the public interest.

He argued that deal was a government to government agreement in terms of which the Chinese government advanced a loan to its  Zimbabwean counterpart with the latter lending to Net-One.

“Even if the project had been put to tender non-Chinese companies would have been eligible because of the funding conditions,” he said.
Net-One chief executive Mr Reward Kangai argued that the equipment required to upgrade the firm’s cell-towers was solely owned and sold by Huawei.

Huawei, he argued, not only secured the funding for the equipment and software upgrade but also provided the necessary training and back-up.

“In any case, a project of this nature which the state procurement board correctly approved and awarded to Huawei is best done  on a turnkey basis  because of its size and the nature  of equipment(both hardware and  software), which would have to be provided,” said Mr Kangai.