Minister implicated in dodgy R1.7bn Joburg broadband tender

13 December 2017 - 09:51 By Penwell Dlamini

An official of the City of Johannesburg has been suspended for allegedly trying to frustrate investigations into a broadband network tender.

In a statement released by Johannesburg mayor Herman Mashaba‚ he said that an update from the forensic investigation into the 900km fibre broadband network revealed that the costs were higher than the R1.3-billion initially thought.

“The investigation has since revealed that costs relating to the deal currently amount to 
R1.7-billion. Based on the progress report provided to me‚ these costs are likely to rise as investigators delve deeper into alleged payments which had gone unaccounted for‚” Mashaba said.

“The investigating team’s report also implicates two members of national government‚ a Minister and Deputy Minister‚ as benefiting from the previous administration’s decision to purchase the fibre network - to the tune of almost R200-million. The preliminary findings also strongly indicate that members of the ANC were‚ from the outset‚ deeply involved in manipulating the City’s tender process with respect to the deal.” 

He added that an official has been suspended for deliberately frustrating the investigation.

“The suspended official refused to allow investigators access to a number of devices which were believed to contain crucial information relating to the investigation. The City was forced to obtain a court order to create mirror images of the official’s devices so as to preserve all information on the devices and ensure that potential key evidence relating to the investigation was not destroyed‚” Mashaba said.

In 2015‚ the City decided to acquire the fibre network and establish a Municipal Owned Entity (MOE) called Metro Trading Company (MTC) to run the network‚ despite having no viable business plan or capacity to run a broadband operation of that size. 

The aim of the Johannesburg Broadband Network Project was to provide access to broadband services‚ which would improve service delivery‚ cut costs and grant communities and businesses across Johannesburg more affordable access to the internet. 

Under the initial agreement‚ the City would have paid an annual fee for the building and operation of the network. After 15 years we would have taken over ownership of the network.

Instead‚ the previous administration decided to purchase the network at considerable cost‚ without any viable business plans and at the risk of serious financial distress to the City.

Despite the astronomical cost‚ few of these benefits have been realised‚ necessitating a thorough investigation of the decision.

“The only conclusion to be drawn is that the acquisition of the network had less to do with empowering the City and residents and more to do with filling the coffers of ANC politicians and their cronies‚” Mashaba said.