UTI awarded 200m-euro City Hall project contract

UTI Systems (part of UTI group of firms) and Bucharest City Hall are due to sign a contract for the creation of NetCity underground optical fibre network for Bucharest by October 15, a project City Hall officials estimate is worth around 202 million euros.
During the May tender, the City Hall received only one bid for the NetCity network, with UTI Systems, together with its subcontractors (which include Ericsson Romania, Alcatel Lucent and Neotel) as the only bidder.
“In its bid UTI pledged to complete work within 36 months after the contract is signed, namely 18 months for each phase of the project. At the same time, the company will pay to the City Hall annual fees at 12% of revenues generated from the use of the network,” stated Alexandru Radu, infrastructure coordination director with Bucharest City Hall, quoted by Mediafax.
He specified UTI Systems would cover 25% of work costs from its own funds, and the rest from loans contracted by the company.
“The first phase of the project is related to the building of the network in the central area of Bucharest at a cost of 80-90m euros, while the last phase will involve expenditures of 110-120m euros,” Tiberiu Urdareanu, the chairman of UTI group, told ZF.
According to Radu, the network will be leased to UTI Systems for 49 years, a period during which the annual average revenue from NetCity operations will amount to 35.49m euros.
“During 2008-2009, the annual average revenue will reach 13.36m euros and within the next two years will exceed 26m euros,” added Radu.
Besides managing optical fibre telecommunications networks in Bucharest, UTI Systems will also set up a traffic management system, handle disaster management and IT management within the municipality.
The winners of the tender must install underground telecommunications networks in 1,350 streets within 2 years after the contract was awarded, with the project to be finalised by 2011.
NetCity will be developed in a public-private partnership, with the city hall making the public domain available.
The system entails taking networks underground, installing additional cables that are rented by operators that want to provide telecommunications services in a certain area, as well as installing traffic control devices, population warning devices and systems to secure a unitary connection between the Bucharest City Hall, sector halls and subordinated units.
Just one bidder from the 24 firms that bought conditions of contract books attended the municipality tender.
Projects launched by UTI Systems also include the ticketing system implemented by RATB and Metrorex.