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SENTECH LIMITED

SENTECH LIMITED. SUBMISSION ON THE ELECTRONIC COMMUNICATIONS AMENDMENT BILL TO THE PORTFOLIO COMMITTEE ON COMMUNICATIONS. Date: 31 October 2007. OVERVIEW. Introduction Comments Critical Comments. INTRODUCTION.

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SENTECH LIMITED

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  1. SENTECH LIMITED SUBMISSION ON THE ELECTRONIC COMMUNICATIONS AMENDMENT BILL TO THE PORTFOLIO COMMITTEE ON COMMUNICATIONS Date: 31 October 2007 DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

  2. OVERVIEW • Introduction • Comments • Critical Comments DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

  3. INTRODUCTION • Sentech supports the need for Government to make strategic interventions on infrastructure investments whenever it is deemed necessary for the social and economic advancement of the Republic of South Africa • Sentech believes that the proposed amendments to the ECA will ensure that a suitable framework is in place which is capable of being utilised where similar interventions are identified by Government as being critical to the fulfillment of future objectives and policy considerations DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

  4. COMMENTS • Sentech proposes that section 2 of the Bill which provides for the insertion of a sub-section 13 to section 5 of the ECA should be amended to read as follows - "(13)The Minister may, after having obtained Cabinet approval, issue a policy direction in order to - • initiate and facilitate intervention by Government to ensure strategic ICT infrastructure investment; and • provide for a framework for the licensing of a public entity in which the State holds at least 75% (seventy five percent) of the shares in such public entity by the Authority." DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

  5. COMMENTS • Sentech has suggested that a limit as proposed be included in sub-section 13(b) of the Bill as only entities in which the State has a shareholding in excess of 75% will be capable of executing the mandate of Government in initiating and facilitating strategically required interventions within South Africa’s ICT industry • A public entity in which Government does not have a majority stakeholding may not necessarily be the most appropriate vehicle for the facilitation and implementation of Government’s strategic objectives or policy considerations DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

  6. CRITICAL COMMENTS • Sentech proposes that the Public Finance Management Act, 1999 (“PFMA”) be amended to address a concern previously raised by Sentech regarding the disparate treatment of Infraco and Sentech under the PFMA and as proposed in the Infraco Bill • Under the Infraco Bill, Broadband Infraco (Proprietary) Limited and Broadband Infraco Limited are to be included in Schedule 2 of the PFMA. • Sentech is currently categorised as a national government business enterprise listed under Part B of Schedule 3 of the PFMA • As a national government business enterprise, Sentech is subject to onerous borrowing constraints. Infraco will not be subject to the same constraints DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

  7. CRITICAL COMMENTS • There is no justifiable basis for differentiating between Sentech and Infraco in respect of their respective treatment under the PFMA as they have both been identified as major providers of broadband infrastructure in South Africa • Sentech thus proposes that the PFMA must be amended to- • remove Sentech from Part B of Schedule 3 of the PFMA and • include Sentech in Schedule 2 of the PFMA DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

  8. Thank You DD/krs Submission on the electronic communications amendment bill to the PCC FINAL 311007

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