FREE WiFi Plan for Newcastle and Gateshead At Risk Over GOWEX Trouble

The new plan to roll-out a free wireless Internet (wifi hotspot) network across “scores of public areas” in Newcastle and Gateshead (North East England) could be at risk after it emerged that Spain-based GOWEX, which had been appointed to setup the new infrastructure, had falsified its accounts and filed for bankruptcy.

GOWEX’s CEO, Jenaro García Martin, has reportedly taken full responsibility for the situation and resigned. But the shocking development also means that the future of nearly 100 other WiFi networks run by GOWEX around the world, including future projects like the planned deployment in Newcastle and Gateshead (here), are now in serious doubt and unlikely to proceed.

At least the network in Newcastle and Gateshead had only just been agreed, which might reduce the potential impact to a significant delay and some admin costs as the hunt for a supplier will need to be re-launched.

GOWEX Statement (Translated)

“Garcia Martin, chief executive and president, said before several board members that the company accounts for at least the last four years do not reflect the true picture, attributing this falsehood to himself. … The board, confronted by the expectation that the company would not be able to cope with its maturing current debt payments, agreed to file a voluntary request for bankruptcy.”

Only last month GOWEX touted revenues of around £150m and there were reports of a plan to invest even more over the next 4-years, although if today’s reports are to be believed then the vast majority of this money never even existed (some claim as much as 90%).

Statement from Newcastle and Gateshead Councils:

“We are naturally concerned and very disappointed at the news that Lets Gowex SA, the associated company of Gowex (UK) who were procured – in common with many other major cities around the world – to provide public wi-fi, is in financial difficulties.

The contract Newcastle and Gateshead have with Gowex (UK) Ltd did not rely on any financial investment from either council so there will be no financial loss to the council tax payer. Delivery under the contract with Gowex (UK) Ltd has not started. We are waiting for confirmation from Gowex (UK) Ltd before any further decisions are taken to progress this work.”

The good news is that the councils “remain committed” to the project, although we might have to wait a while before the wifi aspect is able to continue.