Discussions had been scheduled to be completed early this month, but were extended to next month because of an apparent disagreement regarding the acquisition of infrastructure.
For months, the City and Project Isizwe have being locked in talks regarding the service, known as TshWi-Fi.
Mayor Solly Msimanga earlier this year expressed concern about the viability of free wi-fi.
He then tasked City officials and Project Isizwe with finding a sustainable funding and infrastructure model.
In July the parties announced an amended agreement to their initial contract entered into in 2013, which was to expire in 2019, and agreed to cut off ties on December 3.
Project Isizwe boss Dudu Mkhwanazi told the Pretoria News yesterday the December deadline could not be honoured because of continuing negotiations.
Mkhwanazi said the deadline had been extended to January 11, pending the signing of the new service level agreement with the City. The new deal would include the handing over of TshWi-Fi infrastructure.
“We are still the service provider for the free wi-fi in the city. We just need to sign the new service level agreement, which would include the handing over of the full infrastructure,” Mkhwanazi said.
Msimanga’s spokesperson, Sam Mgobozi, said the relationship with Project Isizwe was still in the transition phase.
“The City must ensure that a new service provider has access to all infrastructure to operate TshWi-Fi , hence the further extension of the contract,” he said.
Mgobozi said the City would start proper supply chain processes to find a service provider to operate and expand the TshWi-Fi network.
“The mayoral committee has approved a further extension of the City’s contract with Project Isizwe to ensure a smooth transition to a new service provider. The final agreement with Project Isizwe awaits the signature of the municipal manager,” he said.
He said the City would launch a request for proposals on a new operating model for TshWi-fi in 2018. “The idea is to make a significant part of TshWi-Fi self-funding by extending commercial rights such as advertising space to the service provider,” he said.
MMC for Corporate and Services Cilliers Brink previously said the move to end the wi-fi contract was because the City had taken a step to put the service on a lawful and sustainable footing.
Brink said: “As a result, the City has now successfully responded to address the auditor-general’s findings against the way free wi-fi was initially procured and can fulfil the executive mayor’s vision to save the project and expand its quality and reach.”
According to Mkhwanazi, the auditor-general had found nothing wrong with a non-profit organisation being placed under the grant-funding and questioned why the service was not put out to tender.
Mkhwanazi previously said Project Isizwe had no intention of competing for a tender after its contract with the City had expired.
Speculation was rife early this year that the future of the service was uncertain. At the time, it was alleged that some hotspots were likely to be switched off due to lack of funds for Project Isizwe to provide the service. Both the City and Isizwe quashed the report as baseless.
The City had spent at least R320million since the inception of the contract and budgeted R88.5m for the 2017/18 financial year.