R10 million a kilometre for fibre cable?
A controversial R1.2 billion project to build and operate a fibre optic cable network around Pietermaritzburg, in KwaZulu-Natal will cost close to R10 million a kilometre.
This is according to the Sunday Tribune which reported that the amount is almost 50 times the R220,000 a km which the city of Durban paid for its network.
The project would see a 119 kilometre tranche of fibre optic cable installed in the city to provide high-speed internet connectivity.
The Durban paper recently reported that funding for the construction, maintenance and use of the fibre optic network never went out to tender because it was deemed part of a transport contract, the paper said.
The project was awarded to a four month old company, Duziwired, which would see the company build and run the fibre-optic cable network for a a fee of R100 million a year over 12 years.
Paris Dlamini, the chairman of the Pietermaritzburg Chamber of Commerce, landed and brokered the deal, despite admitting “having little or no experience in the telecommunications industry”.
The weekend paper reported on Sunday (1 September) that its internal investigation revealed that in 2011, Durban’s Metroconnect Project saw over 700km of fibre optic cable laid to 225 sites across the city.
Citing a source close to Metroconnect, the Sunday Tribune said that competitive pricing structures were used and that the eThekwini Municipality had paid R200,000 a kilometre.
The source claimed that the total cost of Pietermaritzburg’s contract should never have exceeded R300 million, a quarter of the existing contract awarded to Duziwired.
“If the eThekwini model was adopted in Pietermaritzburg it would be of the order of around R45 million to construct the network in the worst case scenario.”
“If you consider that they will probably spend R20 million a year on the usage contract over 12 years the total cost would come to R285 million, and that is at its maximum,” the source said.
The Sunday Tribune said that eThekwini’s pricing structures were corroborated by executive committee questions raised and answered by the city.
Pietermaritzburg newspaper, The Witness cited Msunduzi city manager Nxolisi Nkosi as saying that the contract had not been awarded to Duziwired.
However, the Tribune said that publicly available council documents detailed how Nkosi had been instructed to sign a service level agreement with Duziwired and that the contract had all but been concluded.
“In view of the resolution taken by the council yesterday I am not able to answer you any further. We indicated to you that there was no tender awarded to anyone.”
“You went on with the story and now you continue to ask questions that relate to the same tender that does not exist in our books. There was no need for us to ask them their rate per km if we have not appointed them,” Nkosi told the paper.
Additional evidence seen by the Sunday Tribune indicated that Duziwired has already started talks with subcontractors.
An e-mail, from a company tasked with construction, cited a total cost of R80 million, the paper said.
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[Image courtesy of Johan Pretorius from walkabout.co.za]
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