‘In the city of Johannesburg, a secret, illegal, second network of fibre-optic cables was built with R1billion's worth of investment cash from the Sweden-based Ericsson communications company without its knowledge - and this second secret cabling-network would have sold fibre-optic-speed broadband services illegally by murky 'intermediaries' whose ownership could not be ascertained. The fraud was discovered and now the taxpayers of the ANC-run Johannesburg city council have to pay back R1,2billion to Ericsson in compensation for the fraud. Moreover, the municipality now will have to find the expertise to run the complicated fibre-optic network by their own personnel, because the original contract by Ericsson to run the network for 12 years was cancelled.
This is the gist of a secret report discussed behind closed doors by the Johannesburg city council recently. Some of the facts were revealed on January 9 2015 in a story headlined "‘Illegal cables scupper R1bn broadband project' written by The Star journalist Angelique Serrao.
it was revealed that the ANC-ruled city of Johannesburg had to make a settlement with the international fibre-optic communications company Ericsson, and that the R1billion broadband contract was terminated because a second network of fibre-optic cables was discovered which had been laid illegally in the trenches dug by Ericsson's subcontractors CitiConnect Communications and Bwired.
The project was funded by Ericsson and now the city taxpayers will have to pay Ericsson R1,2billion compensation over the fraud.
(The secretly laid second network of fibre-optic cables would have sold broadband services illegally to provide high-speed internet services to all the greater Johannesburg residents in 600 suburbs through murky 'intermediaries' and if the subsidiaries had any links to the city council these links at the moment, still remain unknown.
The network of fibre-optic cables was built as had been contracted by Ericsson -- and should have been functional by July 2013.
However, last year the contract was cancelled.
Four years ago, the ANC-run council had signed this deal with Ericsson, agreeing that the Swedish high-tech company would invest just over R1bn to build the network that would service all 600 Joburg-city buildings and provide internet connectivity to all its residential areas.
--- In turn, Ericsson ceded the subcontract to CitiConnect Communications.
The contract was that after the completion of the network, it would be managed for the Johannesburg city council for 12 years at a cost of R280m a year.
When the contract was cancelled there was a comment by an unnamed spokesman from the sub-contractor CitiConnect claiming that 'the alleged cancellation of the contract was in dispute and was the subject of arbitration."
Throughout this time, the matter was kept a secret from the taxpayers.
Just before completion of the network, it was suddenly claimed that 'the city had discovered that CitiConnect had committed numerous acts of repudiation of its obligations: the most serious of these being the creation of intermediary companies to sell spare capacity on the network and the implementation of a second network, in the city’s trenches, under the ownership of one of the intermediaries and without the consent or knowledge of the city.'
(Complicated language; basically meaning that a fraudulent, second network of cabling was laid in the same trenches which had been paid for by Ericsson's... )
The termination of the agreement means that Johannesburg city taxpayers now have to carry the extra burden of having to pay back Ericsson and CitiConnect the costs these companies had incurred in the build of the network.
The ANC-run city council had to pay Ericsson a settlement amount not exceeding R1.2bn, it was decided.
Now the city has been 'forced' to start running its own fibre-optic cable network without having the skills onboard to do so.
(Or, as it was put by a city spokesman in government-speak: "it had been forced to in-source the operator business as a newly created municipal entity to operate the network because of the failed contract."
They would, said the unnamed city spokesman, " get full control of BWired, which would become a municipal-owned entity."
--- Democratic Alliance city councillor Martin Louw said the ANC-run council spokesman remained "vague' on the details on how the network would be operated once the council regained
control of the fibre-optic cable network... warning that 'the council did not have the competency to run such a venture. "This dilemma by the city has resulted from its lack of proper supervision, control and management,” he said.
"The municipality needed to recognise that it was not their money which was being spent, but that of the taxpayers of Joburg, Louw added.
(For comment from Ericsson's contact:
Ericsson South Africa (Proprietary) Limited - 148 Kelvin Drive, Woodmead - media.relations@ericsson.com -- Media spokeswoman South Africa: Ms Toju Mngegebi
Parklands 2121 Johannesburg - 730 South Africa Switchboard phone: +27 11 844 2000
ericssoncom/za)
Original story on:
http://www.iol.co.za/scitech/technology/internet/illegal-cables-scupper-r1bn-broadband-project-1.1803114#.VL9atywkCos![]()
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