World Bank ups the ante
The World Bank Group, one of the principal financiers of the East Africa Submarine System (Eassy), a US280m submarine telecommunications cable along Africa’s east coast, will fund its construction whether the SA government grants landing rights to the system or not.
Mohsen Khalil, director of information & communications technology at the World Bank, says he hopes SA will give Eassy the landing rights it needs to provide international bandwidth to SA consumers, but adds that the World Bank’s support of the project will go ahead regardless. “It’s a risk we’re willing to take,” Khalil says when asked if the project would be viable without SA’s involvement. Eassy is scheduled to come on stream in early 2009.
Eassy is 27% owned by three SA companies — Telkom, MTN and Neotel — but the department of communications is drafting policy guidelines which would forbid any cable system that is not majority owned by SA companies from landing in the country. DA MP Dene Smuts has accused communications department director-general Lyndall Shope-Mafole, who is drafting the guidelines, of “sabotaging SA’s interests”. The guidelines, if published as they stand, may prevent both Eassy and another cable system, Seacom’s Sea cable, from landing in SA.
Khalil questions the rationale of one country — SA — requiring majority ownership in cable systems. He says Eassy is a “uniquely African” project with 90% of participating operators coming from the continent. “It should not be governments leading [these projects]. The market always does it better than a government agency,” he says. “I don’t have the right to tell the SA government what to do, but whatever they do, I trust that they support all initiatives where investors are prepared to commit funds.”
Despite the proposed regulations, the International Finance Corp, the World Bank’s private-sector investment arm, will make available $32,5m in funding to African operators wanting to invest in Eassy, Khalil says.
He hopes the SA government will change its mind about the proposed guidelines, saying that SA companies are already heavily invested in the project. Earlier this year, MTN, Telkom and Neotel signed Eassy’s construction and maintenance agreement, a move which may have cost former Telkom CEO Papi Molotsane his job. Molotsane “resigned” suddenly from the state- controlled operator in April.
The New Partnership for Africa’s Development (Nepad) came under fire earlier this year over an attempt, led by SA, to wrest control of the Eassy system from the operators that conceived of it. The two sides have since fallen out.
At a press conference in Pretoria in July, Shope-Mafole said: “There is now no government involvement in the Eassy cable. [Eassy] might continue; it might not continue, I don’t really know.” She later told the FM: “Right now there is no way that Eassy can land here, given its composition.”
Nepad has already made noises about building a rival submarine system and, more recently, has mooted the idea of creating a “virtual” system that piggybacks on other cable systems. Under Nepad’s Broadband Infrastructure Network (NBIN) initiative, the pan-African organisation is also pursuing a plan to build a regional terrestrial network to connect several African countries.
But the World Bank is backing a rival terrestrial project, the Regional Communications Infrastructure Programme, which it hopes will eventually connect about 25 countries.
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