South Africa: Flagship municipal broadband project in Gauteng 'Faces Axe'


The long-awaited multibillion-rand Gauteng Link broadband project could be shelved, a senior government official has told Business Day. Putting the project on ice would mean Gauteng residents would have to wait longer for access to faster and cheaper broadband. According to reports, about R40m has already been spent on pre-feasibility studies.

The Gauteng executive council approved the project strategy in 2006 with the aim of integrating existing networks to create faster and cheaper access to broadband. This was the government's attempt to make doing business in the province easier and attract more investment.

However, the senior official said Gauteng Shared Services Centre (GSSC) officials, who were tasked with implementing the project, had failed to convince Premier Nomvula Mokonyane's executive council that it was sustainable. "The GSSC people are clueless. They don't know what they are doing," the official said.

He said the GSSC plan, presented to the executive council earlier this year, did not take into consideration the existing privately owned broadband network. "They plan as if they'll be starting from scratch; that is why the costs are so high."

The source said that after the Gauteng government spent more than R20bn on the Gautrain, there were no funds left for such a project. "There is not a cent allocated to the project," he said.

Gauteng government spokesman Thabo Masebe said the GSSC had estimated the project would cost between R7bn and R10bn. He said the government had instructed the GSSC to find an affordable funding model. "Municipalities have been doing it. We needed to find areas not covered," said Mr Masebe.

GSSC spokeswoman Khusela Sangoni said staff were still working on the funding model. "We are exploring, amongst others, project finance, venture capital, loan (debt) funding, government grant funding or private-public partnership, and build-operate-transfer concessions."

Speculation is rife that Ms Mokonyane wants to move the project from the GSSC to the department of economic development. Mr Masebe denied this. "It's not a concern at the moment where the project is located."

The project was initially located within BlueIQ, the province's investment arm, which falls under the economic development department. In May 2008, the project was controversially moved from BlueIQ to the GSSC. Then CEO Nomhle Canca tried to oppose the move, but was overruled by then economic development MEC Paul Mashatile.

Ms Canca is suing BlueIQ for defamation as she claims the agency had deliberately withheld information from the auditor-general to discredit her. The matter relates to the R22m expenditure on Gauteng Link which the auditor-general found was irregular as it was not authorised.

The expense was for consultancy work for a pre-feasibility study that was paid in foreign currency. BlueIQ last year maintained that the expenditure was not authorised, but Ms Canca insisted she got the go-ahead from Mr Mashatile and former department head Sibusiso Xaba.

Ms Canca was suspended in 2008 and reached an out-of-court settlement with BlueIQ last year after she had a fall-out with the board. Her attorney, Pamela Stein, said the defamation case would be heard in court later this year.