/ 7 August 2006

DPE says report that SNO delayed ‘inaccurate’

The Department of Public Enterprises (DPE) has dismissed as “inaccurate” a report that the government has reneged on an agreement to sell the telecommunications infrastructure owned by power utility Eskom to the second national operator (SNO) that could result in further delays in introducing competition to Telkom.

Business Day newspaper reported on Monday that fears had emerged that the SNO would struggle to compete if it had to acquire the network infrastructure, worth an estimated R2-billion, on its own.

The infrastructure was built four years ago by Eskom and the transport and logistics group, Transnet, the newspaper said.

It quoted a source close to the public enterprises department as saying that the ministry had decided to establish its own “infrastructure company” — currently called Infraco — which would then lease the network to the SNO at cost plus 4%.

Transnet had, however, agreed to sell its telecommunications infrastructure to the SNO for R256-million, the newspaper said. It added that the handover would take place on Monday.

DPE spokesperson Gaynor Kast said Public Enterprises Minister Alec Erwin had expressed his regret about report, adding that the DPE had repeatedly said that it was premature to divulge any information around the SNO.

“As the DPE we wish to place on record that the information in the story is inaccurate. An announcement will be made once the negotiations have been concluded. We are confident that this is in the best interest of the SNO and its launch, Kast said.

She added: “We have no doubt that the SNO will form an integral part of the telecommunications sector and contribute to lowering telephone costs.” – I-Net Bridge