News / South Africa / Local News

Chantelle Fourie
2 minute read
15 Mar 2017
10:25 am

Mashaba to investigate R1.3bn Joburg fibre deal

Chantelle Fourie

Both the fibre deal and the entity’s viability are being questioned by City of Johannesburg Executive Mayor Herman Mashaba.

Johannesburg Mayor Herman Mashaba.

The City of Johannesburg’s mayoral committee has agreed to yet another forensic investigation into the purchasing of a 900km fibre broadband network at R1.3 billion, reports the Northcliff Melville Times.

This purchase was made through the Metropolitan Trade Company (MTC), an entity within the City.

Mayor Herman Mashaba said MTC had no viable business plan or the requisite capacity to run a broadband operation of that size.

The chairperson of the board informed the mayor that the board had already been requesting an investigation into the purchase.

The 900km fibre network, the Johannesburg Broadband Network Project, Mashaba said, was to provide access to broadband services which would improve the City’s service delivery, save information and communication technology (ICT) costs and grant communities and businesses more affordable access to the internet.

“Despite the astronomical cost, few of these benefits have been realised, necessitating a thorough investigation of the decision,” the mayor said.

The investigation will question why the initial agreement of the City paying an annual fee for the building and operation of the network and taking ownership after 15 years was not adhered to; and why it was bought out at a hefty R1.3 billion, seven years after the tender was awarded in 2008.

Mashaba said MTC ended the 2015/16 financial year with a net loss of R54 million. He added that the company continues to function with no viable business plan.

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Reintegration of municipal-owned entities, a decision agreed upon by council last year, will allow the City to present a situational analysis for the dissolution of the entity, should it be found not to be feasible.

The investigations into this purchase will not affect the City’s existing free Wi-Fi programme and intentions to expand it, Mashaba said.

Caxton News Service

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