Question No.934
Mr M R Shinn (Democratic Alliance) to ask the Minister of Public Enterprise:
(1) Whether the African West Coast Cable (AWACC) project (details furnished) is proceeding; if not, why not; if so, (a) what is the cost and (b) who are the (i) donors and or (ii) shareholders;
(2) Whether any funding arrangements have been finalised; if not, why not; if so, (a) what are these arrangements, (b) when will work commence on the (i) planning and (ii) implementing of the cable and (c) what is the expected completion time?
Reply:
1. (a to b) (i to ii) The original African West Coast Cable (AWCC) project was launched by Broadband Infraco as a developmental project in August 2007, together with 13 other interested parties in the sector, with the objective of being ready for service by mid 2010. Negotiations commenced on the construction and maintenance agreement that would govern the ongoing commercial relationship between the parties after financial closure of the project. The AWCC construction and maintenance agreement was not concluded in its envisaged form because the parties could not reach consensus on various commercial principles and consequently the project was less funded. The AWCC development project was therefore suspended in July 2008.
Broadband Infraco and the other major South African telecommunications operators then investigated new opportunities to cooperate and an memorandum of understanding (MOU) was signed in September 2008 between Broadband Infraco, MTN, Vodacom, Neotel and Telkom to jointly develop a new undersea cable project called the West African Cable System (WACS). Governance structures for WACS were established and the development of the construction and maintenance agreement and supply contract for the WACS project commenced in October 2008.
The commercial principles of participation were negotiated and agreed between the parties and the construction and maintenance agreement was signed by Angola Telecom, Broadband Infraco, Cable and Wireless, MTN, Telecom Namibia, Portugal Telecom, Sotelco, Tata Communications, Telkom SA, Togo Telecom and Vodacom on 8 April 2009. Broadband Infraco's investment in WACS will result in it acquiring a 12 percent stake in the total capacity of the system.
2. (a to b) (i to ii) (c) Broadband Infraco's participation in the project will be financed through a combination of existing equity and debt funding. Debt funding is being arranged in the form of a senior debt package from the Development Bank of Southern Africa (DBSA).
From a technical perspective, WACS is a high capacity marine cable system that will link countries in Southern and West Africa and Europe, with at least 5.1 terabits per second of international bandwidth capacity. Planned landing points include South Africa, Namibia, Angola, the Democratic Republic of the Congo, the Republic of Congo, Cameroon, Nigeria, Togo, Ghana, Côte d’Ivoire, Cape Verde, Canary Islands, Portugal and the United Kingdom. The estimated capital cost of WACS is approximately United States $660 million.
The supplier for the system was selected by the WACS consortium and a contract was signed on the 8 April 2009 for the supply, implementation and commissioning of the cable system with all associated landing points. The activities for the deep water trunk route survey and desk top study have commenced and will be completed by mid September 2009. Manufacture of the marine cable and repeaters is scheduled to start in December 2009. Implementation of the system is expected to commence in May 2010. The cable system is expected to be ready for service during the second half of 2011.
Issued by: Department of Public Enterprise
21 August 2009
Source: Department of Public Enterprise (http://www.dpe.gov.za/)
