Johannesburg — COMMUNICATIONS Minister Ivy Matsepe-Casaburri has criticised the treasury for failing to finance state-owned signal carrier Sentech, putting its future as a going concern in doubt.

Treasury officials "just don't understand" the crucial role Sentech could play in lowering SA's exorbitant cost of communications and taking voice and data services to rural communities, she said yesterday.

Matsepe-Casaburri came out blazing after Sentech issued a statement highlighting its precarious financial position after a refusal by the government to fund its heavy workload.

Its executives finally lost patience with being expected to deliver services with barely any cash. The depth of their discontent is shown in stinging comments by chairman Colin Hickling, who lists a catalogue of financial and policy flip-flops inflicted by the government that have left Sentech reeling.

Funding uncertainties could compromise its status as a going concern, Hickling said. Sentech's reliance on state funding had to be ended so that it could raise private loans before it was too late.

Matsepe-Casaburri said she would not shoulder the blame for Sentech's woes as she shared its frustration. Sentech's policy was clearly defined, but the treasury was preventing it from succeeding by failing to support it.

"The money needed by Sentech to be able to deliver on these policies has never been forthcoming. We have lobbied them without success."

Sentech carries the national TV broadcast signals, and needs R955m to upgrade the network to handle digital instead of analogue signals, which is vital for the success of the 2010 Soccer World Cup. Sentech has received R200m and been promised another R450m, leaving it R300m short. Another R917m to run analogue and digital signals simultaneously has not been granted.

Sentech is also supposed to build a national high-speed wireless network to cut the cost of communications and hook up schools, clinics and rural communities. That will cost R3,1bn. It has received just R500m.

If Sentech could build that network it could deliver education and health-care services to rural areas, Matsepe-Casaburri said. "Even the president has supported this, but it is still without the necessary funding."

When Sentech was already floundering, Public Enterprises Minister Alec Erwin created state-owned Infraco to construct cables linking SA's main economic hubs. Sentech said yesterday Infraco was a "a direct competitor", duplicating some services and sucking up money that could have helped Sentech.

Matsepe-Casaburri said Infraco and Sentech were both essential for delivering better telecoms services. "We can't leave it to the private sector to deliver to the disadvantaged communities," she said. "Officials in the treasury don't understand the business or when to leave it to the private sector. Erwin is frustrated, Infraco is frustrated, Sentech is frustrated, and I am frustrated, but we are not going to give up."

The Public Finance Management Act prevents Sentech borrowing from the private sector, and its board is lobbying for that to change so it can raise the cash to do its job. It has posted annual losses of R73,3m, R93,2m, R85,3m and R21,5m, as it never has enough money to turn its projects into profitable ventures.