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EXCLUSIVE: Last-ditch deal averts Gauteng Broadband Network blackout

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Altron Nexus and the Gauteng Department of e-Government have sealed a last-minute deal to avoid a connectivity shutdown at key provincial institutions, which could have crippled service delivery.

Altron had vowed to discontinue offering services over non-payment, in a letter to the State Information Technology Agency (SITA).

The suspension of services would have crippled the provincial government, which is relying on broadband to deliver critical services, at a time Gauteng is grappling with rising numbers of COVID-19 infections.

The Gauteng Broadband Network (GBN) links eight core nodes across the province and these nodes connect various sites, which include government buildings, schools, hospitals and Thusong service centres.

Despite Altron threatening on Friday to switch off some sites, the company and the department today announced a truce, which reversed the planned shutdown of broadband services.

Falling out

The two parties are squabbling over R177 million which SITA claims is due to be paid by the Department of e-Government. However, the department says its own internal processes concluded that an amount of R156 million must be paid.

Cyril Baloyi, head of the department, explains: “The reason for the department to withhold payment to SITA arises from the auditor-general (AG) findings that have deemed the appointment of Altron by SITA to be irregular, emanating from a supply chain management process that was not duly followed by SITA [in regard to] the procurement of services from Altron.

“Therefore, as a result of the AG’s findings, these flowed further to e-Gov as the payer and end-user of the contact, which resulted in irregular expenditure in the financials.”

In line with the prescribed regulations, Baloyi says, the department had to seek condonation from the provincial treasury regarding all the amounts paid to SITA which are deemed to be irregular.

“SITA had also applied for condonation from National Treasury; however, it was only granted a pro-rata and not on the full R1.3 billion contract value. In consideration of the value of the contract and the payment that will flow thereof, SITA needs to obtain a full condonation so e-Gov doesn’t further incur irregular expenditure,” he says.

The department was mandated to provide broadband connectivity to 3 000 Gauteng provincial government sites. GBN phase one commenced in 2014 and was completed early in 2019, with 1 181 sites connected.

The department recently embarked on phase two of the project to connect the remaining sites and the estimated total value of this phase is R2.8 billion.

Cough up

Last Friday, SITA warned the department of the planned disruptions, urging it to pay up to avoid a connectivity blackout at government buildings.

In a letter to the department, Luvuyo Keyise, SITA executive caretaker, wrote: “Altron intends suspending the GBN services at 10h00 on Monday, 5 July 2021. The notice of suspension is due to the non-payment of the aforementioned services.

“SITA hereby tenders a notice to suspend the GBN services as per the attached letter from Altron. On the same note, SITA hereby pleads with e-Gov to honour all the outstanding payments for the GBN services so as to avoid this undesirable situation, which will have a major impact on services delivered for Gauteng citizens.”

Nonetheless, Altron today announced “at this point in time, there is no intention by Altron Nexus to suspend services to the Gauteng Provincial Government”.

Mark Harris, Altron Nexus managing director, tells ITWeb: “Despite several attempts over a long period to resolve payment issues between SITA and Gauteng’s e-government department, Altron Nexus is still owed over a hundred million rand.

“On Friday, 2 July, Altron Nexus formally notified SITA of its intention to suspend connectivity services to Gauteng’s e-government from Monday, 5 July 2021. The services that were going to be suspended were not going to impact critical services.”

Ongoing dilemma

The GBN project has been the centre of controversy in the past 18 months, having been plagued by allegations of corruption and non-compliance emanating within the project.

First to complain was a group of small and medium enterprises (SMEs) contracted to work on the second phase of the GBN, raising concerns of maladministration, greed and nepotism, and deliberately contravening laws and regulations that govern the project.

One of the SMEs’ key demands was that 40% of the GBN work be awarded to Gauteng-based small businesses in the five regions of the province: City of Johannesburg, Ekurhuleni, Tshwane, West Rand and Sedibeng.

Gauteng MEC of finance and e-government Nomantu Nkomo-Ralehoko.
Gauteng MEC of finance and e-government Nomantu Nkomo-Ralehoko.

Following the publication of the plight of these SMEs by ITWeb, Gauteng MEC of finance and e-government Nomantu Nkomo-Ralehoko met with SITA and Altron Nexus to discuss the SMEs’ concerns.

SITA then demanded a project delivery report from Altron Nexus and that the company pay SMEs.

In September, the Department of e-Government was forced to refute fresh claims that management of phase two of the GBN had been handed over to another agency.

At the time, Adriana Randall, Democratic Alliance (DA) Gauteng shadow MEC for finance and e-government, said the department had turned to the Gauteng Infrastructure Funding Agency (GIFA) to implement phase two of the GBN project.

Randall warned that if handled by GIFA, the second phase of the province’s connectivity project will take a long time to come to fruition, especially given its history of being incapable of bringing projects to a financial close and to the construction stage.

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