[Kictanet] Fw: [Fibre-for-africa] FW: Chaos Over EASSy Project

[alice at apc.org]

FYI
----- Original Message ----- 
From: "Suhayl ESMAILJEE" <suhayl at africaonline.com>
To: "'Private list for use by EASSY Workshop Participants'" 
<fibre-for-africa at lists.apc.org>
Sent: Wednesday, May 10, 2006 2:14 AM
Subject: [Fibre-for-africa] FW: Chaos Over EASSy Project


> FYI.Things do not seem to be looking very good.
>
>
>
> Suhayl
>
>
>
> East Africa: Chaos Over <http://allafrica.com/stories/200605090379.html>
> EASSy Project
>
>  <http://allafrica.com/stories/200605090379.html>
> http://allafrica.com/stories/200605090379.html
>
>
> May 8, 2006
> Posted to the web May 9, 2006
>
> Geoffrey Kamali - Kigali
>
> The NEPAD e-Africa Commission, a body mandated with the development of
> a continental ICT infrastructure network, is taking a tough stance
> over ownership of the proposed Eastern Africa undersea cable system
> (EASSy).
>
> The Commission appears to be set on a clear collision course with the
> consortium formed to promote the project, which prefers the 'Club' or
> members-only ownership, against the Open Access, favored by the World
> Bank.
>
> For months now, the US$240m project has been marred by controversy
> over its ownership and financing, with consortium members openly
> bickering against each other.
>
> NEPAD officials are critical of the 'Club' model, arguing that it is
> discriminatory and in its form, the model has no incentive to bring
> down the high telecom prices, seen as an obstacle to growth.
>
> Dr. Edmund Katiti, the policy advisor to the e-Africa Commission, told
> the Africa ICT investment summit in Kigali last week that NEPAD
> favours the Open Access model because it encourages collaboration and
> regional integration.
>
> He said previous projects created under similar arrangements had
> failed to yield the desired impact, resulting instead in stagnant high
> telecommunications costs and promoting monopolies.
>
> He said such monopolies would drive small telecom operators out of
> business in their own countries.
>
> Africa has the highest telecom prices despite a submarine cable system
> running from Cape Town to West Africa.
>
> "They have led to the cost of international communications being too
> expensive for the ordinary citizen and they don't provide level
> playing field for newly licensed telecom co anies," Katiti argued.
>
> EASSy has generated heated arguments over its ownership and financing,
> with the promoters seeking to finance the project and reap big profits
> from non-member telecom operators, who also happen to be their
> competitors.
>
> Last week, Kenya, the brain behind the project, threatened to go ahead
> in the wake of the ownership controversy and finance the project
> alone, citing delays since the project was mooted three years ago.
>
> "The cost of the meetings alone is half the cost of the project," Dr.
> Ndemo Bitange, Kenya's information and communication permanent
> secretary, was quoted as saying.
>
> A delegate at the summit, speaking on condition of anonymity, said the
> frustration of the Kenyans is understandable.
>
> But Katiti said: "We wish the Kenyans good luck but we believe they
> are an important player in this project. The NEPAD way is through
> collaboration."
>
> "While some members feel the project has been delayed, others feel there
> hasn't been enough consultation. That's the environment we have to endure.
>
> "There are a number of countries, companies and individuals in the region
> who can single-handedly put aside $500m to put up a cable system. But 
> NEPAD
> is not looking at who can finance the project at the quickest time, but
> instead to integrate Africa through technology transfer," he added.
>
> Asked if NEPAD would run a parallel undersea cable, Dr. Katiti simply said
> the project would continue as planned. "They should run a parallel cable 
> if
> they want but ours will continue."
>
>
> Under NEPAD's open access arrangement, the venture will be owned by
> shareholders who comprise of licenced international gateway operators,
> non-operator entities nominated by African states and interested
> international operators outside the region.
>
> To ensure affordable equity subscription to the project, shareholders will
> contribute at least $1m and the rest of the share capital will be acquired
> through debt financing.
>
> Construction works on the project is expected to be complete by the end of
> this year as all relevant studies, policy formulation and supply contracts
> have been concluded.
>
>  _____
>
>
> -- 
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