No sign of Sentech talks

By Siyabonga Africa, ITWeb junior journalist

Johannesburg, 16 Jul 2008

Both the Department of Communications and the Presidency have claimed there is progress in efforts to hold a meeting to discuss Sentech's funding requirements, yet they have neither set a date nor a mandate for the meeting.

Communications department spokesman Joe Makhafola says finance minister Trevor Manuel and communications minister Ivy Matsepe-Casaburri are going to meet to discuss Sentech's funding dilemma, yet will not divulge a date. Presidential spokesman Themba Maseko also says the talks are in progress but refers to the Department of Communications for further comment.

Late last month, the communications department released a statement that said the Presidency would facilitate a meeting between the Treasury and Department of Communications to discuss Sentech's funding requirements for the roll-out of wireless broadband.

Change is needed

Sentech claimed, in a position paper, that the Public Finance Management Act (PFMA) prevented it from acquiring the R2.6 billion it needed to provide wireless broadband in rural areas. The government parastatal falls under Schedule 3 (b) of the PFMA and as such, is reliant on state funding for its capital expansion programmes.

Sentech chairman Colin Hickling said government would have to change Sentech's PFMA status to a Schedule 2 major public entity in order for it to raise funds through private loans.

However, Makhafola is quick to point out that the meeting would not necessarily mean changing Sentech's PFMA status, despite the Presidency's involvement in the matter.

"We are going to meet to discuss Sentech's funding requirements to roll out wireless broadband and that is all for now," he notes.

Yet Denis Smit, MD of research firm BMI-TechKnowledge, says government would give Sentech the funds it needs. "I am inclined to think the final decision of the meeting would be to give Sentech the funds."

Sentech had initially requested R3.2 billion to provide wireless broadband. According to the position paper, it received only R500 million with a promise of R450 million later this year from the Treasury. Yet the required tranches have yet to be paid out.