R3 billion broadband tender in question: report

Treasury bosses are reportedly at odds over a R3 billion broadband tender for the Eastern Cape, bringing the entire process into question.

The conflict has arisen through two letters, one rejecting and the other approving the contract between Liquid Telecoms and the Eastern Cape government, written by senior Treasury procurement executive Willie Mathebula, and acting accountant-general, Zanele Mxunyelwa.

The City Press reported that the provincial government wants to ‘piggyback’ off the approved broadband contract for the Western Cape, being handled by Liquid Telecom – but other officials say it should go out to public tender.

The paper reported that Treasury rules allow for this type of piggybacking to save time and money.

In February 2017, another procurement executive, Schalk Human, advised that the contract be put out to public tender.

In November 2017, Mathebula again advised the Eastern Cape government to put the contract out to tender, saying the scope and scale of the project required an open tender process.

One of the main points of contention is how the contract is made up, and how the differences mean that the contract doesn’t qualify for piggybacking.

The Western Cape contract, worth R3.9 billion, was for 10 years, fully priced from day one. It covers 1,875 sites, and to date – after four years – R310 million has been paid.

The new contract, worth R3 billion, requires an up-front payment of R228 million, and has milestone payments amounting to R1 billion – which are not linked to anything.

The department has already paid R180 million in the past year, with three sites connected that are not live, the City Press reported. The contract is for 2,700 sites.

In May 2018, however, Mxunyelwa approved the contract, saying she found nothing wrong with the process.

Citing correspondence documents it has seen, the City Press said that the provincial government had signed a contract with Liquid Telecom a month before receiving notice that its request to deviate from normal procurement procedures was rejected.

The provincial government, Treasury and Liquid Telecom cite Mxunyelwa’s letter as an indication that the process was approved and followed the necessary procedures.


Read: Liquid Telecom announces partnership with China Telecom Global

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