Durban - A R1.2 billion telecommunications job, brokered by Pietermaritzburg tender king Paris Dlamini, will cost about R10 million a kilometre, almost 50 times the R220 000 a km which the city of Durban paid for its network.
Last week the Sunday Tribune revealed that the Msunduzi Municipality authorised the award of the lucrative contract to Duziwired, a four-month-old company, without the deal being subject to a tender process.
Despite hatching the deal, Dlamini admitted to having little or no experience in the telecommunications industry.
The deal will see the company build and run the fibre-optic cable network at a cost of R100m a year for the next 12 years.
Dlamini, who is also the president of the Pietermaritzburg Chamber of Business, landed the deal just months after securing another plum piece of city work – a multimillion rand parking management tender.
He and his associates are believed to have conceived the fibre optic plan and presented it to the city manager and the executive committee, who shuttled it through for approval, despite opposition parties crying foul.
Funding for the construction, maintenance and use of the fibre optic network never went out to tender because it was deemed part of a transport contract. The job is to be awarded under section 32, which allows the municipality to circumvent a tender process and sign a contract with a service provider of another municipality.
The network, which spans 119km across the capital city, is tipped to increase the internet connectivity of both the government and private business entities with high speed connections.
A Sunday Tribune investigation has established that Durban’s Metroconnect Project, established in 2011, saw over 700km of fibre optic cable laid to 225 sites across the city.
A source close to Metroconnect said that competitive pricing structures were used and that the eThekwini Municipality had paid R200 000 a kilometre.
The source, an industry insider, said that the total cost of Pietermaritzburg’s contract should never have exceeded R300m, only a quarter of the existing Information and Communications Technology contract awarded to Duziwired.
“If the eThekwini model was adopted in Pietermaritzburg it would be of the order of around R45m to construct the network in the worst case scenario.
“If you consider that they will probably spend R20m a year on the usage contract over 12 years the total cost would come to R285m, and that is at its maximum,” the source said.eThekwini pricing structures were corroborated by executive committee questions raised and answered by the city.
Msunduzi city manager Nxolisi Nkosi has remained mum on the issue, citing an investigation by the Speaker to establish the truth about the contract.
Pietermaritzburg newspaper The Witness ran Nkosi’s rebuttal in the wake of the exposé, saying the contract had not been awarded to Duziwired. The report said no contract had been awarded and that the Del Plush deal was still available.
Publicly available council documents seen by the Sunday Tribune detail how Nkosi had been instructed to sign a service level agreement with Duziwired and that the contract had all but been concluded.
The city manager refused to answer detailed questions about the pricing structure of the contract this week, despite this being broadly outlined in the council documents.
“In view of the resolution taken by the council yesterday I am not able to answer you any further. We indicated to you that there was no tender awarded to anyone.
“You went on with the story and now you continue to ask questions that relate to the same tender that does not exist in our books. There was no need for us to ask them their rate per km if we have not appointed them,” he said.
Other evidence seen by the Sunday Tribune indicates that Duziwired has already started talks with subcontractors, who had quoted for the construction phase of the project.
An e-mail, from a company tasked with construction, cites a total cost of R80m.
The correspondence also ties Nkosi to having been consulted on the initial phases of the contract, which he claims has yet to be determined.
DA deputy chief caucus whip Mergen Chetty said the job should have gone out to tender.
“We believe that this contract should have gone out to open tender because of the magnitude of the project,” he said.
Sunday Tribune