Telkom holds Salt hostage

Salt is calling for the delay of the Telkom installation of the line, until other operators can bid for it.
Salt is calling for the delay of the Telkom installation of the line, until other operators can bid for it.

The Southern African Large Telescope (Salt) board is considering delaying the installation of a direct link between Sutherland and Cape Town, as Telkom has more than doubled its asking price.

Telkom is supposed to install a 155Mbps line between Salt, situated in the Northwest Province, to the South African Astronomical Observatory, situated in the heart of Cape Town, by December. Currently, data is burnt on compact disks and then transported by road to Cape Town.

However, Salt is urging Meraka Institute, the government agency that negotiates with Telkom, to delay the installation of the line until other operators can bid for it.

Salt is supposed to be fully commissioned in January. The line is needed to transmit data to and from the telescope, and make its instrumentation available to scientists located in several other countries, such as the UK and US.

The observatory is supposed to be a test case for SA, showing it can handle large science projects as the country is bidding for the R1.6 billion Square Kilometre Array (SKA) telescope against Australia.

However, it seems Telkom has thrown a spanner in the works and, just before the line is supposed to be installed, it more than doubled its asking price to R23 million, from R10 million. Its original quote was R36 million, before this was reduced to R10 million and then hiked to the current asking price just a month before commissioning.

Is it worth it?

[EMBEDDED]“Our studies show the link is worth not more than R5 million to Salt as, in five years' time, it will have to be upgraded. What Telkom is asking for now is pure daylight robbery,” says a senior source at Salt.

The R23 million being asked by Telkom makes the single line worth more than 20% of about R90 million Telkom is being paid to install the country-wide South African National Research Network (Sanren), which will have a capacity of 10Gbps, the source points out.

Official comment from the National Research Foundation (NRF), the body that is responsible for overseeing the budget for the installation of the Sutherland line, gives a brief history of negotiations between itself and Telkom.

The NRF says, towards the end of last year, a technical study was completed on the requirements for the line and Telkom was the only operator that could potentially provide a solution. In February, it was asked to provide a firm proposal.

“After protracted negotiations, Telkom provided a firm quotation in October at a much increased price,” the NRF statement says.

It goes on to say: “At a meeting, on 3 November 2009, Telkom verbally made an alternative offer to Sanren. Telkom was requested to provide a written quote with alternative funding options and to quote on a reduced period option.”

The NRF says it does not believe the current negotiation malaise with Telkom will affect either the total Sanren project, or any of the connectivity requirements for the SKA, as alternative operators are now entering the market.

Please explain

Telkom says the Salt facility represents one of the major nodes of the Sanren backbone and technical feasibility studies have been concluded to provide a high-speed, fibre-optic connection to this site.

“At present, Telkom and Meraka (part of the Council for Scientific and Industrial Research) are in the process of formalising the commercial parameters associated with the Salt location in Sutherland,” Telkom says.

Democratic Alliance MP and science and technology spokesperson Marian Shinn calls on Parliament to convene a meeting between it and the Department of Science and Technology to get Telkom to explain itself.

“Telkom must realise that Salt is not just another South African corporate that it can string along and hold to ransom on costs and deadlines. Salt is the product of a strategic government international partnership. Its investors include Germany, Poland, Britain, India, New Zealand and the American Museum of National History,” Shinn says.

Related story:
Telkom building Salt link at own risk

Read time 3min 40sec
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Paul Vecchiatto
ITWeb Cape Town correspondent

Paul Vecchiatto is an ITWeb Cape Town correspondent.

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