R1.2 billion fibre optic tender scandal
A R1.2 billion project to build and operate a fibre optic cable network around Pietermaritzburg, in KwaZulu-Natal has come under the spotlight after the Sunday Tribune revealed that it did not go to tender.
The project would see a 119 kilometre tranche of fibre optic cable installed in the city to provide high-speed internet connectivity.
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.
It noted that Paris Dlamini, the chairman of the Pietermaritzburg Chamber of Commerce, landed, and brokered the deal.
The Sunday Tribune said it established that in February the contract was awarded to Joburg-based Company, Bwired, and its local partner Duziwired, reportedly created specifically to cater for the tender.
BWired is responsible for the network deployment and construction of the Johannesburg Broadband Network Project (JBNP).
The directors of Bwired are also the directors of Duziwired. The group had made a proposal late in 2011, in which the network was punted to complement Pietermaritzburg’s Urban Renewal Project, the Sunday Tribune wrote.
It said that Msunduzi Municipality awarded the billion rand contract to Duziwired without considering other bidders when the resolution was passed at a strategic management committee meeting in February.
“The council hereby authorises the municipal manager to sign the contract on behalf of the municipality, provided that the contract may only be signed after confirmation that the ICT/Telecommunications services not exceeding R100 million can be transferred to this contract,” an official report said.
In line with the agreement with Duziwired to “build, operate and transfer”, the assets and ability to generate revenue will be handed over to the city only once a decade has passed.
This would suggest that city is funding the construction and maintenance of the project, while also forking out over R100 million a year for its services.
Council documents obtained by the Sunday Tribune showed the project would be funded by the national Department of Transport using a budget allocated for the Integrated Rapid Public Transport Network.
The contract was awarded under the emergency regulation section 32, where no calls for proposals or bids are necessary.
Auditor-General spokesman Africa Boso said that the project has not been formally brought to its attention.
Msunduzi city manager, Nxolisi Nkosi said no accord between the municipality and Duziwired had been drawn up.
“The project has not been awarded as yet. We made a recommendation for it to be awarded in terms of section 32 of the Supply Chain Management regulations. This means that you use a supplier procured by another municipality through a competitive bidding process.”
“In order for that to proceed you first have to obtain approval from another municipality to use section 32 and obtain their approval as well as contractual documents,” he said.
“What has happened to date … we have written to the City of Johannesburg requesting their approval to use section 32. To date the City of Johannesburg has not responded and that is where the process is at.”
Nkosi also told Sunday Tribune: “The only commitment is that once the broadband system is up and running the municipality will procure communication services both for the administration and the IRPTN project. The preferred bidder will lay the infrastructure at its own cost for a period of three years and operate it for a further 12 years.”
“Talks about this project have been on the go since 2011 and Duziwired is not a registered company, it is just an idea,” he added.
State documents, however, reveal that the project is going ahead and Duziwired is a registered company.
Dlamini described himself as “an entrepreneur” but admitted he had no experience in telecommunications. “I used to be in politics in this area, so I know the playing field,” he told the Natal based paper.
Bwired chief executive, Musa Nkosi refused to comment because he was playing golf.
“You interrupted my backswing,” he said.
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[Image courtesy of Johan Pretorius from walkabout.co.za]
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