Vumatel accused of slashing contractor fees after work began

A fibre contractor has accused Vumatel of slashing their fees after they started to work on a project without any consultation about the fee changes.

The contractor, who asked to remain anonymous, told MyBroadband that Vumatel changed the basic agreement and the fee structure of the agreement unilaterally.

“Vumatel decided to reduce our agreed amount without any warning or negotiation,” the fibre contractor said.

He explained that Vumatel has now put his company at risk because the new fees are so low that they place his company in loss-making territory.

“When I brought it to the Vumatel director’s attention he dismissed my concerns, saying we must make the new fees work or end the contract,” he said.

MyBroadband has seen communication between Vumatel and the contractor where Vumatel states that the existing contract will become null and void and that a new contract will be created.

Vumatel responds

Vumatel said it cannot comment in full because the identity of the company which lodged the complaint is protected.

“We have no recourse other than to respond on the basis of the process we follow, which is both legally and procedurally based,” Vumatel Chief Commercial Officer Simon Butler said.

Butler explained that contracts for projects are awarded on a per-project basis, and following an RFP process.

“Vendors or contractors can at any stage in the process withdraw, should they wish to and we respect this decision,” Butler said.

“Contracts are negotiated project by project in advance based on the scope and duration of the undertaking.”

“It is not customary practice to unilaterally change, nor can we find evidence of agreements being adjusted midway through projects without due reason.”

Vumatel staff cuts

This accusation comes after Vumatel staff said they were being retrenched without prior warning from the company.

Affected staff complained that they were completely blindsided by the retrenchments, as there was no communication from Vumatel’s management about the staff cuts beforehand.

It is understood that a large number of project managers and assistant project managers were among those who were retrenched.

Vumatel told MyBroadband that it looked at ways to create opportunities to drive local employment in the communities where it is rolling out fibre infrastructure.

It added that this model has allowed it to streamline the business, to build faster, and has been instrumental in its success in Cape Town and Johannesburg.

The move to streamline the business resulted in direct staff reductions. The company, however, said it created employment in the communities that it works in.

Now read: Vumatel shock – Unexpected staff cuts

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Vumatel accused of slashing contractor fees after work began