ANC MPs Push Hard for Sentech Funding in South Africa

Telecoms

Communications Minister Ivy Matsepe-Casaburri came under intense pressure from ruling party ANC MPs last week to secure a full funding package of US$122.4 million for state-owned signal carrier Sentech, as resolved at the Polokwane conference. The issue seems to rest with the Presidency. If this is not possible, MPs say the parastatal’s status needs to be changed so that it can to the market to raise the money. South Africa is currently in the strange position of having existing or planned Government investments in three different entities: Infraco, Sentech and Telkom.

Sentech has been tasked with rolling out infrastructure for digital broadcasting for the 2010 Soccer World Cup as well as a high-speed national wireless network, but has complained about lack of funding.

Matsepe-Casaburri raised her frustration about the lack of state funding for Sentech this week, but reassured Parliament's communications portfolio committee yesterday that "most" members of the cabinet had been brought around, and the Presidency was seized with the matter. " Funding for Sentech is very important. We have requested the funds. We really cannot continue like this," she said.

ANC MP Khotso Khumalo insisted that if state funding was not forthcoming Sentech's listing under the Public Finance Management Act should be changed, enabling it to raise funds.

Sentech needs US$122.4 m to roll out the digital broadcasting infrastructure, but treasury undertakings fall US$38.4m short of this.

Matsepe-Casaburri said banks had indicated they were willing to lend Sentech about US$102.5m, but this would be impossible until Sentech's listing under the act was changed. It was important the transfer took place, she said, but not everyone agreed.

Matsepe-Casaburri referred obliquely to people in government, officials advising ministers, who believed the private sector should be doing the things for which Sentech was responsible. They believed Sentech should not be given funding that would squeeze out the private sector.

However, the minister was clear that the private sector would not get involved in certain areas, and it could not be forced to do so. "There is a role for the private sector to play, but the realities of SA tell us you can't expect it to do so everywhere. It will not, and you will be living in a fool's paradise if you think it will go there," she said.

Business Day