CAT bid procedure questioned: Relaxed terms could favour Huawei

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(Bangkok Post (Thailand) (KRT) Via Thomson Dialog NewsEdge) Sep. 29--CAT Telecom has called bids for three transmission infrastructure projects worth a total of 3.3 billion baht without setting conditions of past performance.

A source at the state enterprise said CAT had hastily sold terms of reference documents to bidders on Wednesday for fibre-optic networks linking all regions of the country and worth 2.2 billion baht, an automatic switching optical network worth 606 million, and a next-generation network (NGN) project worth 500 million baht.



The documents did not call for past performance records, such as in SDH transmission and fibre-optic projects, as a requirement for bidders, which has been standard procedure in the past.

Some bidders interpreted the move as an attempt by CAT to allow the Chinese telecom giant Huawei to enter the bids.

Huawei was the only bidder that did not have SDH (synchronous digital hierarchy) or fibre-optic project experience in Thailand, the source said.

The Chinese company last year won the contract to build a nationwide CDMA mobile phone network for CAT, involving 1,600 base stations, with a bid of 7.2 billion baht bid through an electronic auction.

Rival bidders at the time questioned the technical specifications and low price, which was almost half the amount quoted in earlier bids that were later annulled.

The source said that if Huawei won new bids by cutting prices, or if the terms was later amended to avoid fines for late completion, it would only damage CAT's reputation further.

Hutchison CAT Multi Media, the 75:25 joint venture of Hong Kong's Hutchison Telecom and CAT Telecom that provides the Hutch mobile-phone service, is currently being investigated by the Office of the Auditor-General.

Another source said that CAT's new board, chaired by Kraisorn Pornsuthee, the permanent secretary of the Information and Communications Technology Ministry, had agreed to waive fines for Huawei's late delivery of 800 base stations in Phase 1 of the CDMA project.

The contract terms allow CAT to fine the company 90 million baht a day for late delivery.

Huawei delivered 800 base stations 42 days after the Jan 26, 2006 deadline. It cited flooding in several northern provinces, as well as unrest in the South as reasons. CAT board members reportedly disagree over whether Huawei should be fined. However, the latest meeting concluded not to impose fines, the source said.

The source said that Huawei had established strong connections with the former Thaksin government because it had constructed Advanced Info Service's mobile-phone prepaid-service network. It also offered to create the network first and bill later in accordance with the number of users.

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.

Copyright (c) 2006, Bangkok Post, Thailand
Distributed by McClatchy-Tribune Business News.
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