Wednesday, June 25, 2008

ICE finally breaks ties with Alcatel

Ice President Pedro Pablo Quiros (Photo by La Prensa Libre newspaper)(Inside Costa Rica) - The Costa Rican Electricity Institute (ICE) decided to end once and for all its relationship with Alcatel. The announcement was made yesterday by ICE president, Pedro Pablo Quiros.

Quiros added that ICE will also sue Alcatel for $60 million in damages, refusing Alcatel's offer of telephone equipment in lieu of the cash payment.

Quiros made it clear that the decision will in no way affect the 400.000 cellular customers who are connected to the GSM network installed by Alcatel and will ICE will take control directly of the maintenance and operation of the network.

The move is possible because the network actually belongs to the Central American Bank for Economic Integration (BCIE), who purchased the equipment from Alcatel and is leasing it back to ICE.

"Customers will not see any difference in service as we are prepared to take over the maintenance and operation of the network", said Geovanni Bonilla, ICE's legal director.

The Alcatel network is one of two GSM networks installed in Costa Rica, the other by the Ericsson company.

Quiros said that the decision to break ties with Alcatel are based on the fact that Alcatel has continually not fulfilled its obligations in providing adequate service, specfically in the area of equipment maintenance, which has led customer complaints of poor service.

According to Quiros, Alcatel was willing to pay the fine imposed on it by ICE for non-compliance in return for ICE accepting that there were no problems with the network.

The actual final bill that ICE is presenting Alcatel is for $75 million. Of that sum $15 million will be drawn from a guarantee posted by Alcatel at the signing of the contract. Alcatel has proposed to install and additional 200.000 GSM lines to satisfy ICE's demands, an offer that was rejected by ICE's board of directors.

The original contract was for $149 million, which was supposed to end in December of this year, was the center of controversy. Allegedly it involved bribes and payoffs of ICE and government officials that led to charges brought against a number of ICE high ranking officials, Alcatel management and former Costa Rican president, Miguel Angel Rodríguez.

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