Parliamentarians have labelled the Uhurunet undersea cable project as "crony capitalism". They were also shocked to hear that, although the Department of Communications (DOC) had presented it as a done deal, Cabinet had still to approve it.
This came from the briefing by a Department of Communications delegation, led by director-general Lyndall Shope-Mafole, to the Parliamentary Portfolio Committee on Communications yesterday.
Shope-Mafole said: "There has been no formal Cabinet approval for it yet. Last July, we made a presentation and it has received approval in principle."
Uhurunet is an outgrowth of the Kigali Protocol, formerly known as the Nepad Broadband ICT Network Protocol and, in turn, once referred to as the Eassy Protocol, which SA signed last year.
The reasoning behind the protocol and Uhurunet is to ensure African countries break the stranglehold of consortiums, such as Telkom's participation in the west coast SAT-3 cable, and to ensure open and non-discriminatory access.
African connectivity is one of the key pillars of the African Union's New Economic Partnership for Africa's Development (Nepad), an idea for the continent's renaissance propounded by president Thabo Mbeki.
Running circles
According to the DOC's deputy director of international relations, Keith Shongwe, the Uhurunet cable is due to be operational in the first quarter of 2010, have a capacity of 3.84Tbps, and already has one South African operator confirmed.
Shongwe said studies by the e-Africa Commission had shown Uhurunet should circle around the continent, as it would decrease the cost of telecommunications significantly.
Uhurunet's ownership structure would have a Nepad special purpose vehicle (SPV) owning 30%; African telcos and other investors would have 45%; and international investors the remainder. However, the Nepad SPV would be the largest single shareholder in the operating company, called Baharicom.
Later in the session, Shope-Mafole said Telkom, MTN, Vodacom, Sentech and Neotel would all be shareholders in the SPV and so would other VANS whom regulator ICASA may license as individual electronic communications network services.
Investments in the Nepad SPV would be capped at $2 million (R15.5 million) and government would have a "golden share" to ensure Uhurunet would meet the Nepad objective, Shongwe said.
Complementing Uhurent's undersea operations would be another entity called Umojanet, which would be a land-based fibre optic network.
Shongwe and Shope-Mafole asserted that discussions were under way to incorporate the Department of Public Enterprises' project to lay a West Coast cable under the new state-owned enterprise Broadband Infraco, into Uhurunet.
Crazy obsession
Dene Smuts, Democratic Alliance spokesperson, said the Kigali Protocol offered Uhurunet an "extraordinary deal" as it meant the cable operator did not have to pay any of the licence conditions that other commercial operators had to and the only real cost was the administration.
Smuts also claimed the recently published guidelines by the DOC that relate to landing undersea cables gave little attention to security. She said the chapter of the Electronics Communications Act under which it falls only refers to waterways and that no consultation was made with the minister of land affairs for servitude rights.
"Those guidelines are only obsessed with shareholding and that's crazy... This smacks of crony capitalism... Making a lot of money for people under the Nepad [Kigali] Protocol," she said.
Shope-Mafole replied that government only needed shareholder information so it knew who controlled the cables.
Randy Pieterse, of the ANC, broadly supported Smut's questions by saying: "I think Dene has asked all there needs to be asked.'
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