Chairperson, Transnet and Eskom's telecommunication assets, which were originally promised to second fixed-line operator Neotel, have been transferred to Infraco. Infraco will now, under contract, sell bandwidth wholesale to Neotel, which in turn will make capacity available to other telecommunications players who were formerly dependent on Telkom.
The government wrote the Electronic Communications Act specifically to deregulate the industry. Now, however, the state is becoming more involved at all levels of the industry. The Minister needs to tell Parliament why Infraco will now be 100% state-owned when, according to the way it was presented to your own Cabinet, it would only be 72% state-owned. Was this a further attempt to crowd out private sector investment?
Proposed changes to the Electronic Communications Act will give the government the power to create a second Telkom monopoly, with consequences that are potentially catastrophic. Why does the state want to own broadband infrastructure communication facilities? Infraco now also wants to lay a cable along the east coast of Africa as well as two other cables along the west coast of Africa. This can be done by the private sector.
Secondly, the state also wants to take up 50% ownership of the two cables, SEACOM and EASSY, that are to be laid along the east coast of Africa. These two cables were already initiated by the private sector in 2000. The private sector has long been denied opportunities in this market because of red tape, rules, regulations and policies that are hostile to private investment in this sector.
New entrants to the telecommunications market have to wait up to three years for licences from Icasa. To expedite the licensing of Infraco, though, the state initiated an amendment to the Electronic Communications Act.
The Minister must inform Parliament about the following: Has Infraco paid Eskom for the infrastructure it acquired from the state power utility? Secondly, what has happened to the R627 million of taxpayers' money that was awarded to Infraco for the 2006-07 financial year, and why has Parliament not been informed of this yet?
Hon Carrim, please listen for a change. The Minister, and you as well, must also explain to Parliament why, in terms of the Public Finance Management Act, Infraco is being listed as a Schedule 2 instead of a Schedule 3(b) entity. Being listed as a Schedule 3(b) entity means that Treasury does not have to be consulted should Infraco want to obtain finance on the open market.
Furthermore, it also means that no Minister will have any control over how much private finance Infraco may obtain. As we have seen, the result is often that when public enterprises get into financial trouble, they come to the taxpayer for help.
A Schedule 2 listing will also allow Infraco to determine the salaries it pays to its management and board members. In other words, we may soon read of yet another public entity that pays its management and board members huge, so-called "performance bonuses" and "payment packages". Furthermore, Treasury must have a say in the agreement between Infraco and Neotel.
In accordance with the Municipal Systems Act, municipalities are forced to make available, for public comment, agreements entered into with private service providers. Why does there have to be a difference between the first and third tiers of government?
Finally, Parliament has the right to force the executive - in this case, the Minister - to make public the details of the agreement between his department and Neotel. This will allow Parliament to decide whether it is in the best interest of the public and whether it is a worthy manner in which to spend public funds.
The DA supports the Bill. Thank you.