PHASE THREE – CONSULTATIVE DRAFT
11 SEPTEMBER 2007
ü Indicates provisions that
were adopted
[ ] Indicates provisions
that were partially adopted
( )
Indicates notes by DPE
The Colour Blue indicates proposals that were discussed on
Wednesday 29 August 2007
The Colour Red indicates proposals that were discussed on
Friday 31 August 2007
The Colour bright Green indicates
proposals that were inserted on Monday the 03 the of September 2007 in the afternoon.
BROADBAND INFRACO BILL
(As
introduced in the National Assembly (proposed section 75); Bill published in
Government
Gazette No. 29879 of 11 May 2007)
(The
English text is the offıcial text of the Bill)
(MINISTER FOR PUBLIC ENTERPRISES)
[B 26—2007] ISBN 978-1-920240-23-3
No. of copies printed ....................................
1 800
GENERAL
EXPLANATORY NOTE:
Words
underlined with a solid line indicate insertions in
existing enactments.
BILL
üTo provide for the transfer of shares, loan accounts, liabilities and guarantees in Broadband Infraco (Proprietary) Limited from Eskom Holdings Limited to the State licensing of Infraco; to provide for the main objects and powers of Broadband Infraco (Proprietary) Limited; to provide for the borrowing powers of Broadband Infraco
(Proprietary) Limited; to provide that as from the transfer date Broadband Infraco (proprietary Limited) be regarded
as having been granted an individual electronic communications network services licence; to provide for the servitudes
and additional rights in favour of Broadband Infraco
(Proprietary) Limited; to provide for the expropriation of land or any right in land by the Minister for Public Enterprises on behalf of
Broadband Infraco (Proprietary)
Limited;
to provide for the conversion of Broadband Infraco (Proprietary)
Limited into a public company having a share capital incorporated in
terms of the Companies Act, 1973; and to provide for matters connected therewith.
PREAMBLE
üSINCE the State intends to expand the availability and affordability of of access to broadband electronic communications networks
and services, including
but not limited
to underdeveloped and underserviced areas;,
üSINCE the State wants thereby to ensure that the bandwidth requirements for specific projects
of national interest are met;
üAND SINCE the State intends to acquire Broadband Infraco
(Proprietary) Limited and its electronic communications infrastructure to serve as the electronic communications infrastructure that will enable the State to provide affordable access to broadband electronic communications networks and services;,
üAND SINCE Broadband Infraco (Proprietary) Limited will require access to land and/or rights in land to maintain and expand its network in order to achieve its objects,
BE
IT THEREFORE ENACTED by the Parliament of the
as follows:—
Definitions
1.
In
this Act, unless the context otherwise indicates—
ü ‘‘Authority’’ means the Independent Communications Authority of
South Africa
established
by section 3 of the Independent Communications Authority of South
Africa Act,
2000 (Act No. 13 of 2000);
‘‘Broadband Infraco Limited’’ means Broadband Infraco Limited,
a public company having a share capital incorporated in terms of the
Companies Act;
ü‘‘Broadband Infraco (Proprietary) Limited’’ means Broadband Infraco
(Proprietary) Limited, a private company duly incorporated in terms of
the Companies Act;
ü‘‘Companies Act’’ means the Companies Act, 1973 (Act No. 61 of 1973);
ü‘‘Constitution’’
means
the Constitution of the
ü‘‘conversion date’’ means the date determined by the Minister in terms of
section 8(1); (Partially
adopted – to check cross referencing)
“Developmental
rate of return” means the market rate of return adjusted downward by an amount
tha the shareholder is prepared to accept in order to achieve developmental
objectives
ü‘‘electronic communications’’ means electronic communications as defined in section
1 of the Electronic Communications Act;
ü‘‘Electronic Communications Act’’ means the Electronic Communications Act, 2005
(Act No. 36 of 2005);
ü ‘‘electronic communications facility” means an electronic communications facility as defined in section 1 of
the Electronic Communications Act;
ü ‘‘electronic
communications network’’ means an electronic communications network
as defined in section 1 of the Electronic Communications Act;
ü‘‘electronic communications network service’’ means an electronic communications network
service as defined in section 1 of the Electronic Communications Act;
ü‘‘electronic communications service” means an electronic communications service as defined in section 1 of
the Electronic Communications Act;
ü‘‘Eskom’’ means
Eskom Holdings Limited, a public company duly
incorporated under the Companies Act, and any of its subsidiary
companies;
ü‘‘Expropriation Act’’ means the Expropriation Act, 1975 (Act No. 63 of 1975);
ü‘‘Infraco’’ means
Broadband Infraco (Proprietary) Limited and, with
effect from the conversion date, Broadband Infraco
Limited;
ü‘‘Infraco claims’’ means all amounts owing by Infraco
to Eskom as at midnight on the
day immediately before the transfer date;
ü‘‘Infraco interests’’ means those Infraco claims and
assets, liabilities, rights or obligations
determined in terms of section 3(1)(a) or 3(2), as the case may be, to constitute
Infraco interests;
ü‘‘Infraco shares’’ means all the shares in the capital of Infraco
of which Eskom is, immediately
before the transfer date, the registered and beneficial owner;
ü‘‘Minister’’ means the Minister responsible for
Public Enterprises;
ü‘‘Public Finance Management Act’’ means the Public Finance Management Act,1999
(Act No. 1 of 1999);
ü‘‘State’’ means the Government of the
ü ‘‘this Act’’ includes any regulation made in terms of section 1110;
ü‘‘transfer date’’ means the date on which the transfer of shares and claims
is finalised under an agreement between Eskom
and the State;
ü‘‘Transnet’’ means
Transnet Limited, a company duly incorporated in
terms of section 2 of the Legal Succession to the South African
Transport Services Act, 1989 (Act No. 9 of 1989), and any of its subsidiary companies.
“Republic” means the Republic of South Africa;[“Utility rate of return” means a rate that allows
for recovery of operational expenses, repair and maintenance costs as well as
the cost of future investment “Wholesale” means wholesale as defined in section 1 of the
Electronic Communications
Act.
Objects
of Act
2.
The
objects of this Act are to provide for the—
ü(a) transfer of Infraco shares and Infraco interests from Eskom to
the State;
ü(b) the main
objects and powers of Infraco;
ü (cb) the borrowing powers of Infraco and Regulations;
ü(d) servitudes and additional rights in favour of Infraco;
ü
Licensing of Infraco
(c) transfer of Infraco shares and Infraco interests
from Eskom to the State; (c(de) expropriation of land or
rights in
land by the
Minister on behalf of Infraco }; and discussed
ü(fd) conversion of Infraco into a public company
with share capital.
Transfer
of Infraco shares and Infraco interests
3. ü(1) The Minister and Eskom, with
the concurrence of the Minister of Finance, must determine by agreement—
ü(a) which Infraco claims and assets excluding any licences required to operate a
private telecommunications network , liabilities, rights or obligations of Eskom,
in connection with Infraco, constitute Infraco interests;
and
ü(b) the consideration payable for the transfer of Infraco shares and Infraco interests to the State.
ü(2) If the Minister and Eskom
cannot agree on any matter referred to in subsection (1),that
matter must be finally determined by the Minister with the concurrence of the Minister
of Finance.
ü(3) With effect from the transfer date—
(a) the State becomes the sole shareholder and member of Infraco; and
(b) the Minister exercises all the rights attaching to Infraco shares and Infraco interests
on behalf of the State, including the rights as shareholder and member
of Infraco.
Main
objects and powers of Infraco
4. (1)
The main objects wholesale
electronic communications network services and electronic communications
services at the developmental rate of return, excluding services to end users,
to promote access and affordability.
of Infraco is are to expand the availability and affordability of
access to electronic communications, including but not
limited to underdeveloped and underserviced areas, in accordance with the Electronic
Communications Act and commensurate with international best practice and pricing, through the provision of –
(a) electronic communications network services; and
(b) electronic communications services.
übulk broadband connectivity services by means of
its long –distance facilities at the lower than commercial costs at a utility
rate of return and on a non-discriminatory basis in terms of the provisions of
the Electronic Communications Act
(2) For the purposes of section 33(1) of the Companies Act,
none of the objects
ancillary to the main objects of Infraco are excluded.
ü(3) The powers of Infraco include
the common powers contained in Schedule 2 to the Companies Act and none of those powers are excluded or
qualified.
ü(4) Subject to
section 4 (1), wWith effect from the transfer date the Minister may, in
consultation with the Ministers of Finance and of Communications and subject to
the Public Finance Management Act, in one or more transactions transfer the
whole or any part of the shares, assets, rights, obligations or interests of the
State in relation to Infraco to such transferees
as the Minister and the Ministers of Finance and of Communications deem in the public interest.
Borrowing
powers of Infraco
ü5. Subject
to the Public Finance Management Act, Infraco may
borrow money, issue a guarantee, indemnity or security or enter into any
transaction necessary in order to achieve
its objects referred to in section 4.
Infraco
licence
6. (1) Subject to subsection (2) and with effect from the
transfer date, Infraco must be
regarded as having been granted an individual
electronic communications network
services licence contemplated in section 5(3) of
the Electronic Communications Act by
the Authority.
(2) The Minister of Communications must, after
consultation with the Authority and
within six months
after the transfer date, instruct Infraco to submit all the necessary
documents required by the Authority in order to
allow the Authority to publish in the
Gazette information
in respect of the licence referred to in subsection (1), which
information must include the terms and conditions
for the licence contemplated in
section 8 of the Electronic Communications Act. [to be discussed after Cabinet decision]
Servitudes
6. ü(1)
For the purposes of this section, ‘‘servitude’’ means any servitude, lease, right of use or other real right in or over land in favour of Eskom and Transnet, which existed immediately
prior to the commencement of this Act, for the conveyance or provision of electricity
or telecommunications or electronic communications,
for pipelines, railways, transport or electrical substations
or for the construction, use and maintenance of electronic communications facilities or networks.
ü(2) With effect from the transfer date and subject to
subsection (3)—
(a) every servitude is hereby extended so as to include —
(i) the additional right to enter and use the land to which such servitude relates for the purposes
of –
(i)
using and and maintaining existing electronic communications facilities and networks; and
(ii)
constructing,
erecting and maintaining further electronic communications facilities and networks;
in order to and of
providingprovide electronic
communications network services and electronic communications network services and electronic
communications services;.
(Adopted
subject to rewording)
üand
(ii) the
right of entry upon such land, and to construct, erect and maintain
thereon further electronic communications facilities and networks;
(b) Eskom and Transnet must allow Infraco in respect of any servitude to—
(i) utilise such servitude in respect of the additional right
referred to in paragraph (a) on such terms and conditions as may be agreed upon between
Infraco and Eskom or Transnet, as the case may be, and in the absence of agreement, on such terms and conditions as the
Minister may determine; and
(ii) utilise
such servitude in respect of that additional right in favour
of Infraco to provide electronic communications network services and electronic communications services in order to
fulfil its objects and to exercise its powers under
this Act and its founding documents; and
ü(c) Transnet must register servitudes in respect of land owned by Transnet in favour of Infraco.
ü(3) (a) Compensation as contemplated in section 25(3) of the
Constitution must be paid by Infraco in respect of the
additional right contemplated in subsection (2)(a)(i) to the registered owner of the land in question for the use of
such additional right to the extent that the said additional right renders the servitude
more onerous than the original servitude. (Adopted subject to checking cross referencing)
ü(b) Notice of the exercise or use of the additional right by Infraco in terms of subsection
(2)(b) must be given by Infraco in
writing to the registered owner of the land in
question before the commencement of such exercise or use, either by personal
service or by pre-paid registered post to the postal address of
such owner, and the compensation contemplated
in paragraph (a) is payable and must be assessed as at the date of such commencement.
ü (c) Sections 9, 10, 11, 12(3) and (4), 14 and 15 of the
Expropriation Act apply with the changes
required by the context in respect of any compensation claimed, compensation offered
and the payment and determination of such compensation as if the notice contemplated
in paragraph (b) were a notice of expropriation in terms of section 7 of the Expropriation
Act: Provided that any reference in the said sections to compensation as provided
for in section 12(1) and (2) of the Expropriation Act must be construed as a reference to the contents of section 25(3) of the
Constitution.
ü(d) Section 68(7) applies to the assessment of the amount of compensation
to which the owner of the land in question is entitled in terms of
paragraph (a).
ü(e) The Registrar of Deeds must, upon the lodgement
of the necessary deeds and documentation, make such entries or endorsements in or on
any relevant register, title deed or other document in the Registrar’s office or
submitted to the Registrar as the Registrar
considers necessary to give effect to subsection (2).
ü(4)
All servitudes and additional rights existing in favour of Infraco
at the time of any transfer in terms of section 4 (4) shall continue to exist in favour of
the third party transferee, subject to such terms and conditions as may
have been agreed upon between Infraco and Eskom or Transnet prior to the
transfer to the third party transferee, provided that any such third party transferee shall not be entitled to further extend such servitudes as provided in subsection 6 (2) of this
Act. (Adopted - subject to rewording)
Expropriation
of land or right in land by Minister on behalf of Infraco
87. ü(1) If Infraco satisfies the
Minister that it reasonably requires any particular land or right in land for public purposes or in the public interest
and for the attainment of its objects
and that it is unable to acquire such land or right in land on reasonable
terms, the Minister may expropriate such land or right in land on
behalf of Infraco, subject to the obligation
to pay compensation as contemplated in section 25(3) of the Constitution.
ü(2) If the Minister expropriates any land or right in land
on behalf of Infraco, Infraco becomes
the owner thereof on the date of expropriation contemplated in section 7(2) of the
Expropriation Act..
ü(3) The fees, duties and other charges that would have been
payable by Infraco in terms
of any law if it had purchased that property must be paid in respect of the expropriation
of any land or right in land in terms of subsection (1).
ü(4) Infraco must refund all costs
incurred by the Minister in the performance of his or her
functions in terms of subsection (1).
ü(5) Subject to section 25(2) of the Constitution, sections
6, 7, 8, 9, 10 11, 12(3) and (4), 14, 15, 18, 19, 20, 21 and 23 of the Expropriation Act
apply, with the changes required by the context, in respect of an expropriation in
terms of subsection (1): Provided that any reference in the said sections to
compensation as provided for in section
12(1) and (2) of the Expropriation Act must be construed as a reference to the contents of section 25(3) of the Constitution.
ü(6) Any unregistered right in respect of the expropriated
land or right in land must be expropriated
separately and the sections of the Expropriation Act referred to in subsection
(5) apply with the changes required by the context to such expropriations.
ü(7) In assessing the amount of compensation contemplated in
section 25(3) of the Constitution, to which a person is entitled, section 12(5)
of the Expropriation Act must be
applied inasmuch as it is just and equitable to do so: Provided that the
reference to an unregistered right in respect of any other property in
section 12(5)(e) of the Expropriation Act does not apply.
ü(8) This section applies to Infraco
only for as long as the State is the majority shareholder
in Infraco.
Conversion
of Infraco into public company
8. ü(1) After the transfer date, the Minister may on behalf of
the State request the Registrar of Companies in writing to convert Broadband Infraco (Proprietary) Limited into
a public company having a share capital in accordance with the Companies Act.
ü(2) The request must be accompanied by the memorandum and
articles of association of the intended public company that must be—
(a) framed in accordance with the Companies Act, but subject to this
Act; and
(b) signed by the Minister on behalf of the State.
ü(3) On receipt of the request and the memorandum and
articles so signed, the Registrar of Companies must—
(a) register the conversion of Broadband Infraco
(Proprietary) Limited into a public company having a share capital, as well as its
memorandum and articles; and
(b) issue an amended certificate of incorporation.
ü(4) The name of the public company referred to in
subsection (3)(a) shall be Broadband Infraco Limited.
ü (5)
No additional fee referred to in section 63(2) of the Companies Act is payable
in respect of the registration of the memorandum and articles
referred to in subsection (3)(a).
ü(6) The Registrar of Companies must issue such directives and
authorise such deviations
from the regulations in force in terms of the Companies Act and the documents
prescribed in terms thereof as he or she may consider necessary in order to give effect to this section.
ü(7) Sections 32, 44(1), 54(2), 66, 190 and 344(d) of the Companies Act do not apply to
Broadband Infraco Limited for so long as the State
holds 75 per cent or more of the total
issued ordinary shares in the company.
Effect
of conversion
109. The
conversion contemplated in section 9 8 does not affect—
ü(a) the continued corporate existence of Infraco
under the Companies Act;
ü(b) any rights, liabilities or obligations acquired or incurred by
Infraco before the conversion date; and
ü(c) the terms and conditions of service of any employee of Infraco.
Regulations
1110. The
Minister may, by notice in the Gazette, make regulations regarding—
ü(a) the procedure to be followed by Infraco
in respect of a request to the Minister for the expropriation of land or a right in land
contemplated in section 8 7 and in respect of the refunding of costs incurred by the
Minister contemplated in section 87(4); and
ü(b(b) any ancillary or incidental administrative or procedural
matter that it is necessary to prescribe for the proper implementation or
administration of this Act.
Amendment
of laws
1211. With
effect from—
(a) the transfer date, the Public Finance Management Act is hereby
amended by the insertion in Schedule 2 after item 11 of the following
item:
‘‘11A.
Broadband Infraco (Proprietary) Limited’’; and
(b) the conversion date, the Public Finance Management Act is
hereby amended by the substitution in Schedule 2 for item 11A of the
following item:
‘‘11A. Broadband Infraco
Limited’’.
Short
title and commencement
ü1312. This
Act is called the Broadband Infraco Act, 2007, and
comes into operation on
a
date determined by the President by proclamation in the Gazette.