Sparks fly in 'microwave' Telkom deal
Telkom CEO Reuben September has come under fire for pushing through a multibillion-rand tender despite it being shrouded in controversy and claims of corruption.
The tender for a point-to-point microwave system was awarded this week to Telsaf Data and Ericsson, in a 60:40 split.
The microwave serves as the back- haul system for cellphone base stations and Telkom’s broadband wireless access network, and will help the company improve its capacity to provide broadband services.
But the awarding of the R2-billion deal has caused a furore among Telkom workers, union bosses and managers who sat on the procurement sub-committees.
On Wednesday, two days after the deal was announced, the Communication Workers Union (CWU) called for a thorough investigation into alleged corruption in the tender, Telkom’s sale of Vodacom shares and the restructuring of its fixed-line operations.
The union said it had evidence that senior directors at Telkom altered documents to influence who won its tenders.
Telkom has denied all allegations against it. “We are satisfied that the process followed ensured that the correct suppliers have been ultimately appointed,” said spokesman Pynee Chetty.
Business Times is in possession of a letter of complaint written by CWU deputy chairman Brian Jacobs in which he voices the union’s “disquiet and trepidation” regarding the awarding of the microwave contract despite the CWU’s objections about a “veil of controversy” bedevilling the process.
In the letter Jacobs said the issuing of the tender was “totally flawed” and amounted to a gross violation of Telkom’s tender policies and procedures.
Maredi Telecoms and Broadcasting, one of the short-listed bidders that claims to have qualified and satisfied all tender requirements, has also cried foul and instructed its lawyers to stop the Telkom deal.
Maredi CEO Takashi Utsunomiya said on Friday that Telkom’s letter of notification did not give any reason for his company’s bid being rejected.
“We offered Telkom a technology that meets local and international standards, at very competitive commercial terms and within a model that advances black economic empowerment,” Utsunomiya said.
“It is a matter of serious concern to us that we have not been given any reason why our bid was rejected.”
Part of the consternation stems from awarding the tender to the telecommunications giant Ericsson.
Ericsson’s black shareholders include businessmen Mandla Langa, Dali Tambo and Sisa Bikitsha. Football legends Fani Madida and Steve Komphela are also BEE partners.
Speaking on behalf of black shareholders, businessman and ANC stalwart Langa said he believed the tender process by Ericsson was above- board, but added that he and all Ericsson partners would welcome any investigation.
“We are concerned about our participation in a transaction tainted by allegations of corruption, but only time will tell if the tender process was flawed or not,” Langa said.
“We are going to meet with all the shareholders to discuss the issue. However, at the moment, we have no reason to believe it was tainted.”
Sources close to the deal said Ericsson failed its equipment and cable tests, which were performed by a Telkom team led by Giel Laubscher.
But Marius Mostert, Telkom’s group executive for network infrastructure provisioning, overruled Laubscher’s critical report about the equipment and said Ericsson should get another turn because its equipment had been damaged while in transit from Sweden.
This, according to procurement experts, went against tender procedures and should have disqualified Ericsson outright.
Maredi is said to have conducted its tests in Japan and apparently satisfied the Telkom team, which recommended that it be awarded the tender.
But Mostert and September allegedly pushed for Ericsson, claiming that Maredi was not technically compliant.
Sources close to the deal say Mostert and September enjoy a close business relationship with Ericsson’s senior management, particularly account executive Rendie Geldenhuys.
When asked, Telkom spokesman Chetty denied the allegation.
Approached for comment on Friday night, Ericsson spokesman Joran Soderholm said the company had failed initial tests due to “human error” but that things were sorted out at a later stage when Telkom granted them another opportunity.
“When we got another chance to redo the tests they were successful and everyone was happy,” Soderholm said.
He denied there was any special relationship between Ericsson and September, saying it was purely professional in nature and spanned decades.
Telkom microwave deal discussion
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