Court halts internet rollout

Judge orders broadband contract parties to find ‘just remedy’ in weeks

The Eastern Cape’s multimillion-rand broadband project, which has been at the centre of a legal battle between two state organs, has been ruled irregular by the Bhisho high court.

Judge John Smith declared the R220m project – awarded to Liquid Telecom in October 2017 – “reviewable” and that the Eastern Cape entered into the contract without approval from the State Information Technology Agency (Sita).

After the tender was awarded Sita, which is responsible for provision of IT services to state entities, applied for an order to review and set it aside.

The judge, however, did not grant Sita’s second request to set the contract aside.

The project was for the rollout of broadband services to 2,700 sites across the province.

Sita’s application stemmed from Eastern Cape DG Marion Mbina-Mthembu abandoning talks with Sita and entering into the contract with Liquid Telecom.

The province had approached the Western Cape requesting to “piggy-back” on their broadband rollout project with Liquid Telecom.

Western Cape DG Brent Gerber told the Eastern Cape he had no objections to the piggyback but he referred them to Sita and Liquid as the main parties in the deal.

In August 2017 the Eastern Cape wrote to Sita requesting the approval. However, Sita gave only conditional approval, and the province entered into the contract without fulfilling all of the conditions.

Smith said: “What is clear, however, was that the Eastern Cape government was adamant that it was entitled to participate in the Western Cape contract without Sita’s approval. By the time that Sita had become aware of Liquid Telecom’s appointment, the horse had already bolted.”

Sita on Tuesday raised concerns that despite the ruling and ongoing court proceedings, the provincial government had published a tender notice, reiterating that Liquid Telecom had been appointed for the provision of broadband connectivity in the province.

Smith ruled that the Eastern Cape had to seek approval from Sita for the rollout, not from the Western Cape.

“The arguments advanced on behalf of the [Eastern Cape] to the effect that Sita was not entitled to make its approval subject to conditions … are fundamentally flawed,” Smith said.

But he added that there was no suggestion of corruption in awarding the contract.

“I am accordingly of the view that simply setting aside the contract may well have deleterious consequences for the citizens of the Eastern Cape and will probably result in unnecessary waste of public funds,” the judgment read.

Smith ordered both parties to file heads of arguments on how to find “a just and equitable remedy”.

Sita was ordered to file by November 2 and the Eastern Cape and Liquid Telecoms by November 16.

Eastern Cape government spokeswoman Mandisa Titi declined to comment “at this early stage of the judgement”.