Client: City of Johannesburg (for Rand Merchant Bank on behalf of a consortium of lenders)
Our role: Technical and commercial due diligence and supervision of construction
Sector expertise: Satellite, telecoms, investment and regulatory
Related services: Analytics, technology strategy and design, programme delivery
The inspirational Johannesburg Broadband Project in South Africa is providing broadband connectivity from Johannesburg’s commercial heart to townships such as Soweto and Orange Farm.
Owned and operated by telecom company, CitiConnect, the project has been funded by a consortium of lenders, originally led by Rand Merchant Bank and including ABSA bank (part of the Barclays group), with input also from the Industrial Development Corporation (IDC) of South Africa. Ericsson South Africa was awarded the turnkey contract to develop the high-speed broadband infrastructure.
Mott MacDonald played a key role in making this project happen. Thanks to our extensive experience in telecommunications, infrastructure and investment advice, we were appointed as an Independent Technical & Commercial Advisor (ITA) by the banks and given three key tasks — conducting technical and commercial due diligence to assess the project’s viability and to supervise the construction phase.
Stimulating economic growth
This ambitious project included design, construction, operation, maintenance, financing and transfer of a major serviced infrastructure.
Our due diligence investigation covered network architecture, technology choices, roll-out programme, network operations, service development, demand forecasts, analysis of revenues and costs, review of key contracts, management of sub-contractors, environmental impact and programme governance.
There were important economic and social objectives to meet on behalf of the City of Johannesburg Metropolitan Municipality (CoJ), to stimulate economic growth and improve the quality and efficiency of public services.
An open-access fibre optic network
Our recommendations informed a robust and cost-effective broadband strategy based on two key deliverables:
The construction of a 900km, high capacity, high speed, open-access fibre network across the municipality, including economically-disadvantaged areas such as Orange Farm, Soweto and Diepsloot.
The creation of a telecommunications operator business to provide services to the city and other customers using this network.
As well as performing technical due diligence and supervising the implementation, our responsibilities included network acceptance (including acceptance of ducts, chambers and other civil infrastructure).
As the ongoing independent technical adviser, we also ensure that any issues that might affect debt repayment are identified and properly addressed. This requires us to monitor the progress of the network build, and to report back to the lenders at regular intervals.
Since our initial report was presented, we have conducted periodic reviews to track progress and to ensure that identified issues have been resolved.
We were able to add real value to this project thanks to our expertise and considerable experience in:
Technical due diligence investigations
Telecoms market insights
Management of supplier relationships
Modelling of revenues and costs
Network operations and processes