Government has quashed rumours that it is deliberately withholding funding for Sentech's wireless broadband network project and that the company is facing a mass exodus of staff.
Funding for the project is, it says, expected to be announced later this month.
Department of Communications director-general Lyndall Shope-Mafole said this morning that reports of large-scale problems at the company, due to a lack of cash, were untrue. She also countered claims that government is deliberately stalling on funding to create competition between Sentech and other state-owned entities.
Early last year, government announced the proposed countrywide network would be one of three major infrastructure projects in the country to be undertaken in 2006. However, government did not provide the funds requested for this by Sentech last year and speculation arose that the delay could derail the project.
Sentech spokesman Pranill Ramchander confirms the company is still in talks with government to secure money for the project, and says Sentech was not given reasons for the delays.
However, Shope-Mafole explains government needs to follow due process for the allocation and is wrapping up a study of the scope of the project. She also states government is being careful not to compete with the private sector.
"The last thing we want is for a government-subsidised company to crowd out the private sector. There are many SMEs and other private organisations operating in the same space as Sentech. We need to establish where private sector companies will be used for parts of the project and where Sentech will work on its own."
Separate entities
She rubbished claims that the communications department is trying to derail the project in favour of proposed broadband provider Infraco. "These are two separate entities. Sentech will provide wireless broadband, while Infraco is planning to lay a cable. They are in no way in competition."
Shope-Mafole says it is anticipated that finance minister Trevor Manuel could announce the Sentech allocation during his budget speech later this month, or shortly thereafter.
It is understood Sentech requested half-a-billion rand for the network project, and government will take into account the company's motivation for the requested figure. "I can't comment on whether Sentech will receive what it asked for, but I can say it will get what it needs to complete the project."
Meanwhile, Ramchander rejects reports that the lack of funding for the network caused an internal crisis that led to the resignation of up to 100 employees last year and at least 10 this year. These two issues are not linked and the reported resignations are inflated, he says.
"I'm not sure where these figures come from. We employ 560 people; 100 people resigning would cripple us."
Ramchander says there were a number of resignations and new appointments last year, but attributes this to a typically high staff turnover within the ICT sector in general.
The fate of six senior managers, whose positions are under review as part of a company-wide restructuring effort, will be known by the end of this month, he notes.
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