*The company Innova Solutions has been in the telecommunications industry for less than eight years in Honduras and its offer was the third highest
**It was one of the companies that received a visit in 2023 from the Chinese ambassador to Honduras, Yu Bo.
On November 14, 2023, the 911 National Emergency System announced the award of a direct contract for the acquisition of video surveillance software to the Honduran company Innova Solutions.
After 45 days, 911 announced on its X account that it already had its “own video monitoring system, without outsourcing services.”
The message had photos of staff unloading boxes with the logo of Huawei, the multinational technology company from the People’s Republic of China that, for at least two years, has been one of the partners of Innova Solutions.
How was the 911 contract delivered in Honduras?
Although Innova Solutions’ bid was one of the highest and it was the youngest of the four participating companies in the telecommunications area, it was awarded after its competitors were disqualified.
The direct contracting process was very fast according to a consulted source, who also expressed technical doubts about the beneficiary company.
According to the Honduran State Procurement Law, direct contracting is carried out in an emergency situation, when the goods and services are specialized, or the circumstances are required to be kept secret.
Since Honduras announced the establishment of relations with China in March 2023, under the argument of seeking mechanisms for greater investment and trade, several alerts have been activated as it is a system identified as condoning or facilitating corruption.
Furthermore, because the intention behind the Asian country’s strong focus on technological collaboration is to develop a dependency, including the creation of networks, technology, and surveillance equipment for political espionage.
It is worth mentioning that, during her trip to China in June 2023, President Xiomara Castro visited the Huawei Research Center in Shanghai, which was already in talks about possible business with the Honduran Telecommunications Company (Hondutel), which to this day are protected by a confidentiality clause, as reported by Expediente Público.
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After the previous 911 provider, Dynamic Corporation, suspended its services on August 31, 2022, due to lack of payment from the government, Hondutel took over the technological platform that allowed it to partially resume operations on March 14, 2023.
In this context, the manager of Hondutel, José Morales, announced a software update to provide 911 cameras with “facial and license plate recognition,” which would lead to launching the acquisition process that Innova Solutions won.
A process in two parts
The Honduran government twice conducted the process for the «Acquisition of VMS (Video Management System) video surveillance system, which it first launched on October 11, 2023.
On that occasion, the company Innova Solutions bid 56,501,428.19 million lempiras (about $2.3 million), an amount that was not only the highest of the three participating companies, but rather it exceeded the estimated budget of 911, according to the declaration that resolved to leave the process unsuccessful.
In the second attempt, Innova Solutions bid with 49,131,676.69 million lempiras (about $2 million), the third highest price of the four participating companies. However, after the two companies that offered the lowest prices were disqualified for incorrigible faults and the fourth for an out-of-budget financial proposal, they did it through direct contracting.
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The relationship with Huawei
Innova Solutions is a technological integrator that was born in 2016 as a fiber optics Internet services provider (ISP), its general director, Abraham Merzkani, told Expediente Público, who responded to a questionnaire sent to him by this media.
In 2018, Innova Solutions began the development of a strategic vision in the investment of certifications and qualified personnel in the areas of Telecommunications, Networking, Electronic Security, Automations, and renewable energy, Merzkani noted later.
The company is part of Grupo AGP, dedicated to international trade and logistics for more than twenty years, whose president is the Honduran businessman Albert Alamán García Power.
One of the requirements to participate in public procurement processes is to be in the Registry of State Suppliers and Contractors, a procedure that Innova Solution carried out on May 26, 2022, just three months after the arrival of the new government and two after who established relations with China.
China behind 911 in Honduras
In 2023, Grupo AGP published on its LinkedIn account photos of the visit of a delegation led by the Chinese ambassador to Honduras, Yu Bo.
“They visited several companies, organizations and institutions throughout the northern zone (of Honduras), in order to open up trade, as other delegations do, since we live in a free market economy,” said Merzkani, who in 2023 was one of the guests at the Huawei Network Summit 2023 event that took place in Mexico.
Also in 2023, Grupo AGP participated in the Exchange and Cooperation Conference between the Jiangsu Province (Nantong) and Latin American and Caribbean countries.
“The Chinese government uses conferences of this type to promote its companies and interests,” Hernán Alberro, journalist and Program Director at the Center for the Opening and Development of Latin America (CADAL, Centro para la Apertura y el Desarrollo de América Latina), told Expediente Público.
With the participation of Grupo AGP in that conference, the Chinese Communist Party was probably “fulfilling two objectives at the same time: promoting its companies and building a bond with a future partner,” he deemed.
But Innova Solutions’ relationship with Huawei has been visible since 2021, when they launched a technological platform, which they called Innova Business.
“As we are integrators of technological solutions, we use different brands originating in different countries such as the United States, China, Germany, Spain, Israel, Argentina, etc., in our projects, including Huawei,” Merzkani explained.
Doubts about the competence
The Honduran company Servitelf, with more than 20 years of experience in telecommunications, also participated in the two VMS acquisition processes for 911, offering the lowest prices, the second time offering 45,139,208.13 million lempiras ($1.8 million).
Servitelf was contacted from Denmark to represent the Milestone brand in this 911 project, its commercial and business development director, Roberto Carlos Romero, told Expediente Público.
The technical specifications of the terms of reference published on the Honducompras page indicate that the VMS solution must be for each of the 911 data centers located in the cities of Tegucigalpa, San Pedro Sula, Choluteca, Santa Rosa de Copán and Tela.
Also, that the licenses must be for life and for the minimum amount of five thousand cameras.
And that the VMS solution (hardware and software) offered must have at least 25 licenses that provide facial recognition analytics and 25 with LPR analytics (license plate recognition).
The Danish tool complied with everything established in the terms of reference of the acquisition process “at the security level and at the operational level,” Romero assured.
Did Honduras favor a company linked to China?
“It was very difficult for any other participant to comply, unless they bid with the tool that we offered,” and “I know that they did not bid with the tool that we offered,” he said.
Hence, “technically, we have doubts about whether or not the favored company meets the requirements because we did not have access to the information,” and the process “was very fast and there was no opportunity to make more technical reviews,” he continued.
He confided that Servitelf was disqualified due to an error by the bank that extended their bail, “and we did not realize the error,” but they expected the process to be declared unsuccessful again and to be repeated.
In his opinion, “they as an institution should have sat down with us and found a way to acquire our platform,” which he insists was the best option, “but I believe that they made the decision that they consider to be the most appropriate; I don’t know the motivations.”
While acknowledging that Huawei is an important global manufacturer, “what I can say is that Huawei does not have a VMS for applications of this type,” that is, for the level of criticality and security of 911, but it does have an alliance with almost the majority of VMS manufacturers.
More links with China
In this sense, Merzkani assured that Innova Solutions “searched the national and international market for different products and companies that suited the needs of this project, whose technologies were integrated to develop an adequate solution.”
He considered that the process was “totally transparent and public on the part of the government” and that “we rethought our offer by optimizing the scope, without compromising the excellence and quality of the technological solutions required.”
A source who preferred to omit his identity informed Expediente Público that the software is from Dahua, the second largest video surveillance company in the world, founded by Chinese millionaire Fu Liquan.
Merzkani was asked what Innova Solutions’ technical proposal consisted of, but he responded that “there are technical and confidentiality aspects that are exclusive to the contractor.”
The legal representative of Innova Solutions, Mario Raveneau, was also asked if the VMS that will be used is from the Dahua company, but he did not respond to the message.
A single expense?
The head of Public Relations of the 911 National Emergency Service, Francia Tatiana Reyes, assured Expediente Público that with the acquisition of the software the State of Honduras will have “an asset in perpetuity, which means that it was acquired for life, it is only paid once, contrary to the services that were provided with the other company, which had to be paid annually and represented an excessive expense for the State.”
Reyes was asked how much the monthly payment was, but she did not respond. However, according to a Criterio.hn publication, it was 1.8 million dollars per month.
Security or espionage?
For his part, Merzkani explained that “part of our responsibility within this project is to train each of the employees of the Integrated 911 System, so that it is managed directly and exclusively by them and that the State always has control of the database and all the information.”
On the subject, Romero said that, although licenses are not purchased again, this type of system requires maintenance, updates, and storage servers.
“The fourth element is the communications network; we are talking about a system that goes into each Data Center (…) these cameras require fiber optic communication links and are purchased by a third-party service.”
In this regard, Alberro mentioned the potential of this tender to “later be linked to the provision of other services: surveillance cameras with facial identification, for example, which is an area where China is very present in Latin America.”
He also said that, although the amount of the contract is not excessive, if China is behind it, it is possible that it will accept a very minimal business “in order to get a foot in the system and then start selling other services linked to urban and citizen security in Honduras, related to airports, ports, and other strategic sectors in particular.”
But China is also very interested in being able to generate databases to feed, for example, its artificial intelligence developments to make them more powerful, he noted.
Therefore, we would have to see in the future “what happens with the data registered in the system: where it is hosted, who manages those servers and so on.”