News / South Africa

Gosebo Mathope
2 minute read
13 Dec 2017
2:42 pm

Mashaba implicates minister and deputy minister in R1.7bn MTC scandal

Gosebo Mathope

An unnamed minister and a deputy minister are reportedly implicated in a decision taken by the then ANC-led council to purchase a fibre network for almost R200m.

Joburg Smart City Logo. MTC.

Johannesburg mayor Herman Mashaba has received a progress report on the forensic investigation into the 900-kilometre fibre broadband network procured by Metropolitan Trading Company (MTC).

The total cost to the project was estimated at R1.3 billion. Mashaba has now revealed expenditure is currently sitting at R1.7 billion, and believes this is likely to rise astronomically.

The mayor has also announced the investigation report implicates two unnamed members of national government, a minister and deputy minister. He said the pair unduly benefited from the decision taken by the ANC-led council to purchase the fibre network to the tune of almost R200 million.

“The preliminary findings also strongly indicate that members of the ANC were, from the outset, deeply involved in manipulating the City’s tender process with respect to the deal. In addition to this, an official has been suspended for deliberately frustrating the investigation,” Mashaba said in a press statement earlier today.

The Citizen reported in July that a senior manager from the economic development department was suspended pending a disciplinary hearing into allegations. Mashaba alleged at the time he refused to hand in his work laptop and also attempted to erase crucial information relating to the investigation from electronic devices.

READ MORE: Senior official in charge of Joburg broadband project suspended

The City reported at the time that because of the alleged refusal by the implicated to cooperate with investigators, it was forced to obtain a court order to create mirror images of the official’s devices. Investigators wanted to preserve all information on the devices and ensure that potential key evidence relating to the investigation was not destroyed.

According to the statement Mashaba released, the decision to acquire the fibre network and establish MTC to run the network in 2005 was taken “despite having no viable business plan nor requisite capacity to run a broadband operation of this size”.

The aim of the Johannesburg Broadband Network Project was to provide access to broadband services that would improve the City’s service delivery, realise ICT cost-related savings for the City and grant communities and businesses across Johannesburg more affordable access to the internet.

Mashaba, however, said despite the astronomical costs, few of these benefits had been realised, necessitating a thorough investigation of the decision.

Mashaba also disclosed that under the initial agreement, the City would have paid an annual fee for the building and operation of the network with ownership ceding to the city after 15 years. He said, instead, “the previous administration decided to purchase the network at considerable cost, without any viable business plans and at the risk of serious financial distress to the city”.


 You can follow the author @Gosebo_Mathope or

For more news your way, follow The Citizen on Facebook and Twitter.