Western Cape premier Helen Zille on Friday accused President Jacob Zuma of “shielding Telkom from open competition” in naming the company as the “lead agency” to roll out broadband in underserviced parts of South Africa.
She also said the strong rally in Telkom’s share price — it touched a new, multi-year high above R80/share on Friday — may have been the result of “insider trading”. Zille, who is also leader of the Democratic Alliance, suggested those with knowledge of Zuma’s decision had profited from this information unlawfully by buying Telkom shares.
The accusations are contained in a state of the province speech, which was meant to be delivered on Friday but wasn’t after it was disrupted by the ANC in the Western Cape legislature.
“If you track the Telkom share price over the past few months, you will notice that its shares have gone from R11,93 in May 2013 to R76,50 this month, which strongly suggests speculation by insiders based on the privileged information that Telkom would be designated as the lead broadband agency,” she said. “If this is true, it is both criminal and corrupt.”
She also tore into Zuma’s decision to name Telkom as government’s broadband agency.
“Every sensible South African was astounded to hear that the national government has awarded Telkom the monopoly for broadband roll-out nationally,” she said.
“This approach, announced by the president … and disguised in weasel words like ‘lead agency’, contradicts the government’s own strategy called ‘South Africa Connect’, which advocates open competition in the market of broadband infrastructure providers so that users can get the most effective service at the best price.
“Our constitution also requires that procurement must be done ‘in accordance with a system which is fair, equitable, transparent, competitive and cost effective’. To ignore these requirements and to institute a monopoly for a partially state-owned enterprise is a very serious matter, and one that will cost consumers dearly,” she said in the speech.
It is telling that Telkom tendered for the Western Cape broadband contract, and was beaten in open competition by several other providers. By shielding Telkom from open competition, President Zuma has removed all incentives to produce an effective and affordable service.” — (c) 2015 NewsCentral Media
