The City of Johannesburg has terminated the contract of CitiConnect Communications, the company tasked with running and commercialising its broadband project. The company managed BWired, the telecommunications operator set up by the city, with Ericsson, to run the project when it was launched.

“It is unfortunate that we have had to take such action, but it is as a result of noncompliance to the contract and we did not really have any other option,” city broadband head Zolani Matebese told TechCentral.

Matebese said no money has been paid to either CitiConnect or BWired.

The city was scheduled to go live with its broadband project on 1 July 2013, but CitiConnect failed to honour its obligations, said Matebese.

“Over the past year, we tried to assist them as far as possible to resolve the issues and it just eventuated that they weren’t able to deliver.”

CitiConnect had not responded to requests for comment at the time of publication.

The company was asked to build broadband capacity in order to ensure the availability of affordable connectivity throughout the city, he said.

The R1bn broadband infrastructure project is part of Johannesburg’s plan to connect all of its main offices and branch sites. It will also be used to roll out a thousand Wi-Fi hotspots by the end of 2016.

Matebese said the city had to make a “tough business decision” to ensure that broadband delivery was achieved. It decided to terminate a build, operate and transfer agreement with CitiConnect. The termination was the result of multiple breaches of the contract, he said.

“Other major issues were around the late delivery of the internal set of services, and some of their other actions which were outside of their contract. We have had a responsibility to make sure we follow corporate governance and compliance and to that end we have had to take this action.”

Matebese said the city will not leave the project in limbo. “We are bringing the network in-house and operating it in-house.”