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President Asks ICE to Cancel 3G Contract

August 29, 2008

President Oscar Arias has asked the Costa Rican Electricity Institute (ICE) not to award the contract to install a new generation of cell phone technology in Costa Rica to Huawei Technologies.

Huawei, a Chinese company, was the only bidder for the project, which would add 1.5 million new cell phone lines on a service promised to be more reliable and that provides users Internet access, video services and music streaming, among other features.

Huawei, however, was also one of five firms that sent a letter in July to ICE saying that “given the current conditions established in the contract, it is not possible to present an offer,” according to the business weekly El Financiero.

But while signatories Ericsson, Nokia Siemens Networks, ZTE Corp and Continex S.A., a subsidiary of Samsung, all stayed  true to the letter, Huawei presented a bid of $582.8 million to install the lines. The bid is more than double the $225 million ICE had budgeted for the project.

In his letter, Arias asks ICE’s president, Pedro Pablo Quirós, to redo the bidding process with more companies involved.

“It is important to guarantee that the actors who participate in these processes are the most apt and offer the best conditions, something that can only be proven by way of a contest in which various companies demonstrate their claims, and the decision can be made based on comparative criteria,” Arias wrote in his letter.

 

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