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Huawei, ZTE in court battle over police tender

The Huawei office in Wuhan, central China. The firm is embroiled in a court battle with rival ZTE over tender to supply the police with communications equipment. Photo/FILE
The Huawei office in Wuhan, central China. The firm is embroiled in a court battle with rival ZTE over tender to supply the police with communications equipment. Photo/FILE  AFP

Two giant Chinese telecoms are locked in a battle for the control of a multi-billion shilling tender to supply the police with communication and surveillance system in a row that has seen the High Court freeze the deal.

State-owned Huawei Technologies has obtained court orders freezing the awarding of the deal to its privately-owned rival ZTE Corporation that won the tender among six firms, which submitted bids.

The court has now blocked the Ministry of Internal Security from signing a deal with ZTE while the Public Procurement Board has been ordered to look into Huawei’s complaints of tender irregularities.

The National Police Service telecoms project, which was one of the controversial Anglo Leasing projects, was floated early last year requiring that only Chinese companies bid.

The nationwide project, which is expected to secure police communication, has run into headwinds with Huawei claiming ZTE was allowed to overlook tendering rules and is planning to use “outdated” technology.

“The Kenyan public stands to lose by having an outdated and incompatible technology owned solely by the successful technical bidder (ZTE) taken up by the National Police Service at the cost of current and compatible technology,” said Mohammed Nyaoga, Huawei’s lawyer, in his application to the court.

The secure command and control system encompasses telephone facilities, vehicle and video tracking systems and digital recordings equipment, among others.

The project would be implemented under the Ministry of Internal Security but the winning contractor was expected to do a build operate and transfer contract although they would help with the technical aspects of running it later.

Mr Nyaoga told the court that other than ZTE’s alleged use substandard equipment, there were anomalies in the firm’s tendering that should have disqualified their bid.

Huawei claims that on July 27 — the deadline for submitting and opening of the tenders — ZTE submitted their Power of Attorney past the 10.30am deadline while tender cartons had company logo on them, all contrary to procurement rules.

The company further claims that in ZTE’s case, the Ministry of Internal Security allegedly exceeded the 30 days permissible to conduct a complete evaluation of the bidder by more than 130 days.

Huawei’s appeal to have the alleged irregularities investigated by the Public Procurement Board in order to quash the tender decision was turned down on January 14.

The High Court has now ordered the review appeal be heard afresh while stopping the ministry from going ahead to award the contract to any firm.

“Stay be and is hereby granted of any proceedings or actions towards giving effect to the decision by the first respondent (Public Procurement Board)...by either proceeding with the procurement process or award of any contract to any party...,” said Mr Justice George Odunga.

During the dying days of the Moi regime, the government attempted to establish a similar system for the pre-election Administration Police, expected to cost Sh5.6 billion, and separate ones for the Prisons Department and the military.

The scheme was inherited by elements in the Kibaki government and morphed into the now infamous 18-contract Anglo Leasing deals in which the country could still lose billions in dispute arbitrations arising from the dodgy State-guaranteed projects.

No prosecution regarding the mega scandal has taken place so far.

The two Chinese companies have in the past two years filed suits against each other over patents and trademarks bringing their intense rivalry to the fore.