FYI ----- Original Message ----- From: "Suhayl ESMAILJEE" <suhayl@africaonline.com> To: "'Private list for use by EASSY Workshop Participants'" <fibre-for-africa@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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