Comptroller Orders ICE to Probe Ericsson Contract Mismanagement

Costa Rica's comptroller general has ordered state-run telecoms monopoly ICE to conduct an internal investigation into why the company accepted an incomplete delivery of mobile network infrastructure, local daily La Nacion reported.

ICE must outline to the comptroller within 22 days what actions it intends to take against contract administrator Alberto Herrera and project director Fernando Murillo. The firm also plans to hire a consultant to calculate how severe a fine it should impose on network supplier Ericsson.

The contract in question, for installation of 600,000 GSM mobile lines, was worth US$130mn and ICE executives have called for a fine of up to US$32mn. The company expects to sign a consultant within two weeks, ICE chief executive Teófilo de la Torre was quoted as saying, adding that the expert will be paid 5mn colones (US$9,690) for his service and will have to produce a report within 30 days.

Herrera and Murillo accepted the handover of the supposedly completed network in December 2005 before Ericsson had installed the last 16 base stations, nine of which it was unable to install as ICE had not secured the necessary construction sites.

ICE later discovered that signal strength was insufficient in 83% of the high traffic sites that it tested with similar signal strength deficiencies found in 54% of low traffic sites. However, the comptroller said ICE itself erred by testing coverage in only 129 of the 384 localities served, and also failed to test along the seven highways included in the contract.

In their favor, Herrera and Murillo originally refused to accept the network but reconsidered because they thought it was commercially viable. Since December 2005 ICE has sold 460,000 of the available lines.

BNAmericas.com"

Posted to the site on 24th July 2006