There Goes Another $6 Million

In yet another anecdote that makes a case for those who oppose the new tax bill, the local newspaper La Nacion published an article this week regarding the ICE's waste of nearly $6 million on the San Jose City of Light WiMax Plan, a system that was obsolete almost before the ink was even dry on the contract.

The story begins in 2004, when the bidding requirements for the WiMax portion of the "San Jose - City of Light" project were published. The ICE Board of Acquisitions approved the winning bid 2 years later, in November of 2006 to Alvarion, an Israeli firm.   This was already a problem, since in wireless technology 2 years are more like light years.

As could be expected, just two months later, the City of Light Project Manager notified ICE that the equipment was no longer required, since the broadband needs for the areas that the WiMax equipment was to cover had already been met.

This meant that ICE now had equipment coming on line that it didn't have any use for.  So the ICE looked for other places to install the equipment, and determined that Guapiles and Cariari in the Limon Province would be good locations, due to a continuing problem of cable theft.  Other WiMax stations went to Heredia and Alajuela.

According to La Nacion, there is documentation of criticism of this project all along.  The contractor was unhappy with the change in plans, since it caused delays in the implementation of the system.  In a 2009 letter to Pedro Pablo Quirós, the General Manager of Alvarion, Rami Bar, complained that "The first setback in this process was that, due to internal problems at ICE in the beginning of 2007, the location was changed, even though we had already set up the service in the area specified in the contract". 

The letter went on to complain that when the location was changed, then a new analysis had to be carried out at each proposed site, "and of the proposed sites ICE rejected them one by one, until after a lengthy and tedious process the final sites were determined."

This meant a two year delay in the project implementation. Finally, in 2011 ICE accepted the installation as completed, and claims that today the service is installed and serving clients who would otherwise not have a service. 

However, the numbers (see information below) do not add up to a cost effective or profitable investment. At the same time, ICE was competing with its own subsidiary -- RACSA -- which had jumped on the WiMax technology earlier, and is an addition criticism of the project.  The Comptroller General's Office is currently investigating the project.

• SIE (Sistema Internet Inalámbrico / Wireless Internet System) Proposal to give 1200 enterprise connections.
  127 radio towers
  $11.2 million investment
  2006 start up
  August 2009 status: 32 radiobases pendientes, 300 clientes conectados
• E-SIE (Evolución del Sistema Inalámbrico Empresarial / Evolution WIS ) Objective was to evolve SIE plan to provide 35,000 VOIP services and Internet to small businesses and homes.
  127 radio towers (from SIE)
  $14,5 million investment
  2008 start up
  August 2009 status: project delayed for technical and business development reasons
• SJCL (San José City of Light) Project to offer 7,100 telephone lines and 2,000 Internet connections.
  7 radio towers
  $5.9 million investment
  2006 year started
  August 2009 status: 1. Radio Tower in San Isidro, Heredia.
  Source ICE files