Gowex bankruptcy: Local councils vow to proceed with free Wi-Fi projects

News 7 Jul, 2014

Free Wi-Fi & smart cities tech provider goes under, but Newcastle & Gateshead promise to proceed with deployment plans

Newcastle and Gateshead councils have reinforced their commitment to providing local residents with access to free Wi-Fi services, despite their supplier filing for bankruptcy.

Spanish tech firm Gowex filed for bankruptcy protection over the weekend in the wake of Jenaro Garcia, the company’s CEO and chairman’s, resignation and revelations about falsified accounts.  

In a statement to the Spanish Alternative Stock Market on Sunday, the company admitted that its account statements from the past four years did not give a “faithful image” of its financial performance.

The contract is just one part of our ambitious programme of delivering superfast broadband and Wi-Fi in the city.

It also confirmed the company board had stripped Garcia of his management responsibilities and, as a result, bankruptcy proceedings had now begun.

The company has made a name for itself in recent years as a purveyor of Wi-Fi hubs in major cities, and “smart city”-style technologies.

In May 2014, the company struck a deployment deal with Newcastle City Council and Gateshead Council to install Wi-Fi hubs throughout the town and city centres by 2015.

In a report by IT Pro at the time, local councillors talked up the economic benefits free Wi-Fi services could bring to the areas.

However, in the wake of last weekend’s developments, both councils have been quick to assure residents - via a joint statement to IT Pro – that they are still committed to delivering on their promise of free Wi-Fi.

This is despite admitting to being “concerned and very disappointed” at the turn of events.

“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 taxpayer. Delivery under the contract with Gowex (UK) Ltd has not started,” the statement reads.

“We are waiting for confirmation from Gowex (UK) Ltd before any further decisions are taken to progress this work...[but] the contract... is just one part of our ambitious programme of delivering superfast broadband and Wi-Fi in the city.

“We remain committed to this important programme,” it added.

Further to this, the company also recently signed a partnership agreement with networking giant Cisco to support Gowex’s ongoing Smart Cities Project, which aims to bring free Wi-Fi services to 600 cities by 2018.

IT Pro contacted Gowex for clarification on where work on this now stands, in light of recent events. At the time of publication, no response had been forthcoming.