Only one cable allowed

Johannesburg, 13 Mar 2008

National Treasury's decision to decline funding for Infraco's West Coast undersea cable project has forced the Department of Public Enterprises (DPE) to throw its lot in with the Nepad Broadband Infrastructure project, Uhurunet.

In a presentation to Parliament's Portfolio Committee on Public Enterprises, the department revealed it had requested R2.09 billion over the next three years to fund Infraco's national long-distance and West Coast undersea cable project.

However, National Treasury only allocated R727 million towards the initiative, leaving Infraco with a deficit of R1.368 billion.

"The further funds requested, mainly for purposes of investing and constructing a state-initiated undersea cable, were not approved by National Treasury," the DPE revealed. "The National Treasury raised major concerns about the extent of private sector participation in the cable."

A National Treasury official explains that the decision to decline funding of the cable was based on the withdrawal of an international partner.

"In Infraco's original business plan, an international company was to help with the funding of the project. However, this company withdrew from that arrangement. Government does not want to build a cable alone; we believe there is opportunity for partnership with local, African and international players," she says.

If private sector participation is again secured, National Treasury will reconsider its decision to decline funding, she comments.

"However, we are aware of talk of many cables. Government only wants to fund one department on a cable initiative, not two departments for two competing cables."

Not canned

DPE spokesman Lulu Bam says the West Coast cable has a mandate to cater for the 2010 FIFA World Cup Soccer Tournament, the Square Kilometre Array and the South African Women Entrepreneurs' Network.

"There is no way the West Coast cable is going to be canned," she says.

However, indications are that the project is to be incorporated into the $2 billion Uhurunet. The Nepad broadband infrastructure project will see 12 countries partner to build a 3.84Tbps undersea cable and provide a terrestrial broadband network.

According to a Department of Communications spokesman, talks between the two departments began last year. The move ensures there is no duplication of resources and makes it cheaper for SA to provide large amounts of bandwidth capacity, he says.

Lagging behind

While Uhurunet is expected to be commercially available by 2010, Edmund Katiti, head of policy and regulatory affairs for the Nepad e-Africa Commission, concedes that the project is lagging and some of the deadlines were not met.

"The fact the project may be lagging in some of the milestones we set may be a disappointment, but we are not building infrastructure for infrastructure's sake," he says.

Additionally, the organisers hope that a shareholder meeting, which will take place on 28 March in Johannesburg, will help speed up the planning process.

The meeting should accelerate the formalisation and registration of Baharicom, the company that will manage the broadband infrastructure on behalf of the investors, he explains.

The meeting is open to all parties that initially expressed interest in investing in Uhurunet, says Katiti, including private sector entities that operate in the countries that signed the Kigali protocol.

Countries that did not sign the protocol will also have the opportunity to join the project through the special purpose vehicle investment, he says.

There are no special privileges on the undersea cable between those countries that signed the Kigali protocol, and those that did not, Katiti notes.

The only difference is that when establishing the terrestrial network, the builders will have to decide which countries they go to first, he adds.