12 February 2016

South Africa: No 'Lead Agent' Yet for SA Connect, Says Govt

Government says it hasn't yet selected the "lead agent" for its R740m municipal broadband project, despite indications that Telkom could win the deal.

At the 2015 State of the Nation Address (Sona), President Jacob Zuma said government had "decided to designate Telkom as the lead agency to assist with (the) broadband roll out".

Zuma said last year that the first phase of the broadband roll out would connect eight district municipalities in South Africa ranging from Dr Kenneth Kaunda in the North West to Vhembe in Limpopo.

The announcement sparked concern from opposition party the Democratic Alliance (DA) which has asked why the project wasn't put out to an open tender, especially as government owns 40% of Johannesburg Stock Exchange (JSE) listed Telkom.

And on Thursday this week, Bloomberg reported that Telkom is said to be nearing sealing the deal and that the company has even "carried out site inspections and studied how to implement the plan in eight districts".

But the department of telecommunications and postal services says it hasn't yet selected the lead agent for the project.

"The lead agent in the roll out of broadband through the government policy known as South Africa Connect has not been appointed yet," Siya Qoza, a spokesperson for the department, told Fin24.

"The department is following due process to facilitate the roll-out of broadband for Phase 1, which aims to link government facilities in eight rural districts to fast, secure and reliable internet," said Qoza.

Fin24 asked Qoza if Telkom is in the running for the project but he refused to comment. Qoza didn't comment further on when Fin24 asked him for more details on the department's "due process".

Telkom also declined to comment on the matter after Fin24 sent the company a number of questions.

Zuma, in his Sona 2016 address on Thursday night, briefly brought up the topic of government's broadband roll-out plan in two sentences.

However, his statement this year on the topic didn't make mention of Telkom carrying out the roll-out.

"Government will fast track the implementation of the first phase of broadband roll-out to connect more than 5 000 government facilities in eight district municipalities over a three year period," Zuma said.

"Funding to the tune of R740m over a three year period has been allocated in this regard," he said.

Source: Fin24

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