DA councillor, Andrew Stewart, had said the City was trying avoid responsibility for its role in hiring City Connect Communications (CCC), whose performance led to the scrapping of a R1.2-billion broadband contract with Ericsson.
Stewart said he was responding to a statement in the City Council, where Ruby Mathang, Member of the Mayoral Committee for Economic Development, said the City was not responsible for hiring CCC. Stewart claimed that an Ericsson executive involved in negotiations with the City had resigned soon after the contract was signed, immediately becoming a director of CCC. He added that the Ericsson contract stipulated that the work should be awarded to the company. “Therefore the City was involved in hiring CCC. Before the City signed the Ericsson contract, they insisted [that] CCC would be the sub-contractor. It was part of the deal,” Stewart claimed.
Stewart had also asked Mathang whether the company had any experience in laying broadband cables prior to being appointed. He also wanted to know what other projects it had worked on. “Clearly CCC were unfit to do the job, and now the City is trying to avoid responsibility,” he said.
However, City spokesperson Nthatisi Modingoane, said the City and Ericsson South Africa have entered into an agreement to transfer over 900 kilometres of fibre optic broadband network to the City.
“This agreement, which followed months of negotiations, was signed in Johannesburg on 28 May this year. At its January sitting, the City Council took a resolution mandating City manager, Trevor Fowler, to begin negotiations with Ericsson SA guided by the prescripts of the Municipal Finance Management Act and other applicable legislation. The City will now obtain full control of the network and house it in a Municipal Owned Entity (MOE),” Modingoane said.
He added that as part of the agreement, Ericsson is to transfer all contracts and the network to the City’s MOE. Modingoane said the agreement will see the City pay Ericsson an amount of R1.2 billion for costs incurred in the rollout of the network and the contracts related to the network based on an independent valuation.
He said, “The City intends to use the broadband infrastructure to drive down the cost of telecommunications and thus the cost of doing business in Johannesburg. The transfer will also bolster the City’s desire to eliminate digital exclusion through the massification of affordable broadband.”
