KATHMANDU, April 22: State-owned operator Nepal Telecom (NT) is preparing to blacklist China-based telecom solution providers Huawei and ZTE for being unable to complete procedures required for implementing the project on stipulated time. The two companies were selected for installing 10 million additional GSM lines.
NT had issued letter of intent to Huawei and ZTE about two months ago after which they were to sit for negotiations to finalize terms and condition to supply and install equipments for its ambitious expansion drive.
"The final day for negotiation expired on Friday. But none of them approached us for finalizing the deal," a senior official at NT said.
NT had selected Huawei for the first phase of the project, under which it had agreed to supply equipment and install system for 4.8 million GSM lines. It had quoted the lowest price of Rs 5.7 billion to complete the task. ZTE Corporation was awarded contract for the remaining lines in the second phase after it agreed to provide the service at a cheaper rate than those proposed by Huawei.
Although official from both the companies held talks with NT about a month ago, they failed to finalize the terms and condition for executing the project.
"Despite initial offer, which enabled it to win the bid, officials of ZTE complained the rate was not profitable for them to deliver service in hilly region," the officer said. ZTE officials said the second phase required them to work mostly in the hilly parts of the country. The first phase, for which Huawei was to provide service, largely included cities like Kathmandu and Pokhara. "The official of the ZTE had asked for some consideration as they were old vendor and were covering geographically difficult region," said the source.
However, after NT turned down the request, ZTE officials left the meeting saying they would sit again for talks. But they never communicated after that, the official said. Officials of Huawei too have not responded to NT´s call.
"We are preparing a strong action against both the supplier, including blacklisting them for future bids," the official said. Given the situation, NT is also preparing to award the tender to the third lowest bidder -- Ericcson India.
However, this will escalate the cost of the project by two-fold. Had ZTE and Huawei implemented the project, NT would have completed it at less than Rs 12 billion. If it goes to Ericcson India, it will need to spend more than Rs 27 billion, as Ericcson India has quoted Rs 13.75 billion for the first phase alone.
NT had announced the 10 million GSM line expansion project in a bid to fulfill the demand of 2G and 3G lines till 2015.