NetOne prejudiced of $78 million in overpriced Huawei deal as shadow of suspicion is raised over other projects

Nigel Gambanga Avatar

NetOne, the State-owned mobile telecoms operator was prejudiced of $78 million in a deal signed with Huawei for a telecoms infrastructure upgrade project which was enabled by the $218 million facility extended by the Chinese government.

These details emerged when questions on the ongoing probe on NetOne were raised by the Parliamentary Portfolio Committee on ICT. The Committee sought clarification from the Minister of ICT, Supa Mandiwanzira, whose name has been linked to some of the allegations of corruption in some media reports.

In response, Minister Mandiwanzira dismissed the allegations as false and explained how the government had hired MegaWatt Energy, a private consultancy firm, to investigate the allegations that the Zimbabwean government had been prejudiced by Huawei after the telecoms giant had been selected as the infrastructure partner for the NetOne project.

Part of Megawatt’s role in this engagement also included renegotiating the terms of the agreement with Huawei as a way of recovering whatever amount the government and NetOne had been prejudiced of.

According to Mandiwanzira, MegaWatt’s findings showed that the most that Huawei should have been paid was $140 million instead of the $218 million that NetOne ended up signing off on. MegaWatt managed to renegotiate the terms and recovered $30 million from this. Mandiwanzira said,

After doing this extensive investigation they (MegaWatt) came back with a report that said the amount of $218 million that you(Zimbabwe) paid, you actually should have paid $120 million worst case scenario you should have paid $140 million and not $218 million. Therefore, there is sufficient room for you to go and renegotiate the price of this, despite there being  contracts already signed and sealed.

You can listen to Supa Mandiwanzira’s statement by following the link below

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While this statement is the first of its kind to officially point a finger at Huawei for prejudicing a Zimbabwean project, it is not the first time that allegations of overcharging have been brought up regarding a national telecoms project.

TelOne, another state-owned operator that has received a $98 million loan facility from the Chinese government also engaged Huawei as its infrastructure partner. This deal raised concerns around overcharging, with some sources quoted in the media claiming that the operator was being overcharged by as much as 30%.

The NetOne deal is the only one that has been specifically outlined as a case of overcharging. However,what’s a matter of concern is how Huawei is also engaged in other multimillion dollar projects like TelOne’s fibre rollout plan and the national Digital Migration exercise.

The firm has earned its place as a leader in telecoms projects across Africa and the rest of the world, but any chance of Zimbabwe being exposed to multi-million dollar overpricing kicks up a lot of questions.

Is Zimbabwe also being overcharged here? Is it a case of poor negotiation skills from Zimbabwean principals or should the concerns of corruption around these deals that have been raised be taken seriously? Was it just the NetOne management that failed to handle a multi-million dollar project?

Unfortunately, the answers aren’t so easy to get straight away and are instead replaced by a cloud of suspicion.

11 comments

  1. E

    Well cnt say we didnt see this coming.
    Saka pane akadya bag rough

  2. G

    they should use a competitive tender system, it seems that the China loans come with preconditions that they should hire a chinese company or something (just speculating) a competitive tender system that is open should take away the problems of overcharging

  3. LMMMMTNyati

    G, there is a very big case here. The Chinese loans were not done as per tender but kumbadzurwa chaiko, for the funds and deal to be consummated it was a give or take as our country credit rating plus profitability remain an albatross on our financial necks. No one wants to give us anything fairly because of our records that’s the painful truth and reality, so we get very expensive things plus the money stays in China and we get zhing zhongs and we pay through the nose. Hakuna chemahara except mushana, more than 99% will be from the Chinese including pit sand and labourers even wheel barrows – cry my beloved Zimbos.

  4. Josiah

    The truth is Supa is corrupt.

  5. Lawrence

    Well, that extra money is probably somewhere between what Huawei actually received and what Netone paid.
    And by the way, did anyone notice that when you search for MegaWatt Energy online, there are no results? Not even a Facebook Page result, no LinkedIn page, No directors working at that company showing on google search. Now my real questions are, How did they get this contract? What other jobs have they done before? Is their name MegaWatt Energy telling that they do consultancies in energy project? How much are they getting for this “unearthing”? In short, how did MegaWatt get selected? and who owns Megawatt Energy?

  6. vusa

    Yes Techzim,find out who is Mega watt Energy?How did there get contracted?How much were there paid?

    1. mega deals

      Megawatt energy belongs to a Chinese with links to Mandiwanzira.

      Megawatt was not contracted by Netone. Instead, Supa requested Kangai and the directors to sign off payment to this firm. When Kangai refused, citing irregularities, he alleged corruption through his proxy.

      1. E

        Taaah bt kangai had his own bag of bones so noones hands are clean

  7. Mophius

    The root of the problems are deeper than what is being reported, Kangai took cash, but he is the small fish, hence problem cannot be solved, its like you take one thief and replace with another

  8. Nobuhle

    Supa is a thief and corrupt to the core.p

  9. shingi

    Im intrigued by the whole story in that i have never heard of Megawatt Energy myself and i think Huawei would have only overcharged at the behest of some unknown entity but some payments were conscripted into this amount and what did megawatt energy as consultants get out of recovering the 30 million dollars ? when it comes to public entities why is so much secrecy ,

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