EASSY MISSES FINANCE DEADLINES – AN OFF-THE-RECORD BRIEFING
EASSy has been trying to get further commitments of US$5 million by written letter from the CEOs of the 27 members of the Consortium as part of its CNMA. The deadline keeps moving out. The first deadline for letters from the CEOs was November 2005. That then slipped to December when 3 more companies sent in letters. At the meeting in Johannesburg last month it was the same story. Now the deadline has been moved to the middle of March. Over two years of its life, the project has lost a year on its estimated schedule.
The difficulty it’s experiencing is that many of the participating Consortium members will have to go to their Governments for money and the Governments in turn will need to go to the World Bank. The African Governments involved are according to a source close to the process, speaking a very different language to the Consortium members and the operators have not really been speaking to their Governments. And after all, it is the Governments who will give them the landing rights.
The Consortium cannot agree on a financial adviser. The “big boys” know what to do and what they want but there is a split between them and the smaller operators who need advice on a range of issues including access and governance. EASSy will not be able to complete the CNMA until this issue is settled.
The cost of the project had been set at US$200 million, a figure that the sceptics have always been doubtful about. In fact the likely price for the cabling alone is US$240 million and that does not include the US$40 million needed for properties and things like a rescue ship when the cable breaks.
NEDAD’s e-Commission has had a consultant put together a business model that would work with whoever wanted to invest in it. The “FTV” would be financed through a combination of debt and equity. The company would own the physical layer equipment and offer capacity to everyone at the same price, leaving operators to compete at the service layer. The price offered will be low and designed to promote the economies of the countries involved.