‘Zuma tapped Telkom without tender’

President Jacob Zuma came under fire yesterday for appointing Telkom the lead agency in the roll-out of broadband infrastructure in the country without putting this out to tender. Zuma confirmed in Parliament that Telkom would take the lead in the roll-out of broadband infrastructure in the country amid criticism from opposition parties that he should have put this out to tender, and not made Telkom the lead agency. The news left investors cold as Telkom shares on the JSE ended 2.99 percent weaker at R66.45, which valued the company at R35 billion. Marian Shinn of the DA described the decision by Zuma as bizarre as many companies would have bid for the tender. The president was answering questions in the National Assembly on Thursday when Shinn questioned the decision.

Zuma first made the announcement in his State of the Nation address. This was later confirmed by Finance Minister Nhlanhla Nene in his Budget when he allocated R1.1bn for the roll-out of broadband infrastructure. The president stuck to his guns in Parliament, that Telkom would remain the lead agency in the broadband infrastructure roll-out. However, the DA said he was closing the space for other companies to bid for the tender. Zuma denied shutting out other companies to bid for the broadband roll-out tender. He said Telkom was a public entity that understood the complex nature of connecting rural communities. He said it would be tasked to roll out broadband even in the remotest parts of the country. Telkom had been in the sector for years and it understood the business, Zuma said. But this did not mean that other players would not take part in the broadband infrastructure roll-out, he added.

Zuma said as the lead agency Telkom would have the primary role and mandate to execute this information and communication technology (ICT) infrastructure roll-out plan. He added that Telkom understood the demands of the country better than any other company in the ICT sector. “The infrastructure we are talking about will reach other municipalities,” he said. “Those that are poor will be given assistance so that they will be connected,” he added. The confirmation of Telkom as the lead agency in the broadband roll-out has put paid to speculation on other companies getting a big slice of the share of the broadband infrastructure roll-out. Zuma said the decision was made in the best interests of the country. Telkom was a state-owned entity that was in a better position to understand what the government wanted, which was to connect the many public institutions and schools across the country.

Nene made this point in his Budget and said the broadband roll-out was at the centre of economic growth and development plans. He reiterated the R1.1bn allocation to ICT infrastructure roll-out in his medium-term budget policy statement in October. The broadband roll-out was one of government’s key priorities, he said.