MEMORANDUM OF AGREEMENT
USE OF MUNICIPAL INFRASTRUCTURE
CITY OF CAPE TOWN / LINK AFRICA (PTY) LTD
entered into pursuant to Council Resolution No. _______ dated
___________________________
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PARTIES TO THE AGREEMENT
The parties to this agreement are:
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1.1
The City of Cape Town, referred to herein as „the City‟, a
metropolitan local government established as such in terms of
the provisions of the Local Government: Municipal Structures
Act No. 117 of 1998.
1.2
Link Africa (Pty) Ltd, Number 2008/016231/07, referred to
herein as „Link‟ a private company registered as such at the
Companies and Intellectual Property Commission of the
Republic of South Africa.
PREAMBLE TO THE AGREEMENT
2.1
Link is an electronic communications network
licensee (“ECA licensee”) in terms of the Electronic
Communications Act, No. 36 of 2005 (“the ECA”).
2.2
Link contends that its status as an ECA licensee
accords it, in terms of sections 22 and 24 of the ECA,
a right to obtain access to the City‟s sewer and
stormwater infrastructure in order to install its fibre
optic cable in that infrastructure.
2.3
Link has requested the City to facilitate Link‟s access
to the City‟s infrastructure.
2.4
The City‟s view is that, before it permits or assists Link
to obtain access to its infrastructure, the City is
obliged to undertake the process prescribed in the
Municipal Asset Transfer Regulations, 2008 (“the
MATR”).
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2.5
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The City has now undertaken the process prescribed
in the MATR, and has agreed to facilitate Link‟s
access to the City‟s sewer and stormwater
infrastructure, subject to the terms and conditions
contained in this agreement.
APPLICABLE LEGISLATION
3.1
The City has required compliance with the process set out
Chapter 4 of the Municipal Asset Transfer Regulations, 2008,
promulgated
in
terms
of
the
Local
Government: Municipal Finance Management Act No. 56 of
2003.
3.2
The City is the Constitutionally mandated authority for the
management of stormwater in built up areas and for
municipal sanitation services,
as per Schedule 4B to the
Constitution.
3.3
As has been mentioned above, Link seeks access to the
City‟s sewer and stormwater infrastructure in terms of Sections
22 and 24 of the ECA.
RIGHT TO INSTALL CABLING, AND AMBIT THEREOF
4.1
The City hereby agrees in principle to permit Link to install
fibre-optic cabling for electronic communications purposes
in the sewer and stormwater pipes of the City, after having
obtained the necessary wayleaves and construction permits
from the City as provided for in this agreement.
4.2
Link‟s entitlement to access to the City‟s infrastructures willl in
no way take precedence over or interfere with the rights and
obligations of the City as local authority, and particular its
rights and obligations as constitutionally mandated authority
governing the management of stormwater systems and
municipal sanitation systems.
4.3
Link‟s entitlement to access is subject further to approval by
the City in terms of the City‟s current and future policies with
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regard to the granting of wayleaves and construction permits
for installation of infrastructure on City land and/or in City
pipe networks, as per clause 5 hereunder.
4.4
Link will be entitled to access to the City‟s infrastructure for
the purpose of installation of fibre-optic cables for electronic
communications purposes, and for no other purpose.
4.5
Only one fibre-optic cable of an outer diameter that shall
not exceed 1% of the area of the pipe into which it is
installed, may be installed per pipe, subject to the following
conditions:
4.5.1
The ratios reflected in the report of SMEC, procured
by agreement between the parties,
must be
maintained.
4.5.2
The maximum size pipe in which the City will permit
installation is a pipe of 350mm in diameter.
4.7
Cables may not be installed in sewer pipes with a gradient
flatter than __________ or steeper than ___________.
4.8
Cables may be installed in pipes manufactured from any
substance currently commonly used for this purpose, except
in pitch fibre pipes. Should new technologies emerge for the
manufacturing of pipes after signature of this agreement,
installation of cables therein will be at the City‟s discretion.
4.9
Cables may not be installed in areas indicated in the SMEC
report as being unsuitable for such installation, for example
cables in close proximity to restaurants.
4.10
Cables may not be installed in stormwater pipes with a
gradient flatter than ____________
or steeper than
___________.
4.11
Switch gear and distribution gear may not be installed in
manholes and catchpits or pipes.
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4.12
Break-out connections from the main cables may only be
done using directional drilling, and not by way of open
trench installations in road and footway surfaces.
4.13
Cables may under no circumstances impede the access of
maintenance equipment utilised by the City for purposes of
ensuring functionality of pipes.
4.14
Link will not be entitled to install cables in any other
infrastructure other than sewer and stormwater pipes, and in
particular (though not limited to) not in potable water mains,
treated effluent mains, spring water mains, reservoirs, pump
stations and ducts.
4.15
Link must provide a master plan for each area in which it
proposes installing cabling.
4.16
Link‟s entitlement to access to the City‟s stormwater pipes for
purposes of installing its cabling, is a non-exclusive right.
WAYLEAVE AND CONSTRUCTION PERMIT PROCESSES
5.1
In respect of each intended installation Link shall be obliged
to apply for a wayleave or wayleaves from each relevant City
directorate, as well as a construction permit issued by
Transport for Cape Town.
5.2
Installation may not commence until authorisation is granted
in the form of a written wayleave and a construction permit
as provided hereunder.
If cables are to be installed in
infrastructure managed by more than one City directorate,
wayleaves must be obtained from all affected directorates
prior to application for a construction permit.
5.3
The City undertakes to process wayleave applications by Link
as expeditiously as possible, within the limits of its resources.
5.4
The City shall be entitled to charge wayleave and
construction permit application fees as per its policy from time
to time with regard thereto.
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5.5
The City shall be entitled to call for a deposit or financial
guarantee in respect of each application for a construction
permit, to provide for any losses the City may suffer as a result
of damage to its infrastructure occasioned by the installation
by Link of cables and any construction work associated
therewith.
5.6
The City shall be entitled to call for a replacement guarantee
or guarantees at any time to allow for inflation and escalation
of costs.
5.7
Each wayleave and construction permit application by Link
must contain sufficient detail to enable the City to evaluate
possible impacts on the relevant service and infrastructure.
Detail of supplementary installations up to and including the
end user must be submitted.
5.8
In the event of proposed installations being partially outside of
the sewer and stormwater networks, the City‟s policies from
time to time with regard to permissible number of trenches
and open access must be adhered to. The City must provide
information requestd by Link with regard to such policies on
request.
5.9
Subsequent to completion of all installations,
Link must
provide the City with as-built information with regard thereto,
within forty-five days of completion. Failure to comply with
this requirement will entitle the City to call up the financial
guarantee.
5.10
Any wayleave or construction permit granted but not taken
up within six months lapses and a fresh application must be
made if the wayleave or construction permit is required
thereafter.
5.11
In the event of cables being installed but not utilised by Link
for an uninterrupted period of twelve months, or in the event
of the City granting authorisation for installation of cables and
cables not having been installed within twelve months of such
authorisation,
the City may withdraw the right granted in
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terms of this agreement in respect of such unused cables or
unused routes, in conformity with the notice provisions set out
in this agreement.
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5.12
Installation of cables will trigger the responsibilities of Link with
regard to pro-active maintenance.
Liability to pay the
consideration for the right provided hereunder will
commence upon issuance of the construction permit for the
relevant installation.
5.13
If it is necessary for Link to traverse land owned by a person or
entity other than the City, it is the responsibility of Link to
obtain the necessary authorisation from such land owner/s.
CONSIDERATION TO BE PAID BY LINK
6.1
Link shall at all times during the duration of this agreement be
liable to pay a market related consideration for its right of
access to the City‟s infrastructure.
6.2
The consideration payable will be calculated according to
the following formula:
Where
Charge
=
Monthly gross charge (in Rands)
MVLand
=
Market value of land (in Rands)
CostPipes
Rands)
=
Cost of pipes, including installation (in
Required gross yield (p.a.) =
Includes a provision for
administration, maintenance, depreciation, and return on
investment (all in % p.a.)
Apportionment by use
utilised by cable
=
% of pipe capacity
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6.3
The charge determined in terms of the aforesaid formula will
be applicable for a period of three years from date of
signature of this agreement, unless it is superseded by a tariff
as envisaged in terms of Clause 12 hereof. Should there be
no such tariff upon the expiry of the three year period, the
parties shall negotiate a tariff to apply for a further period as
determined by agreement.
6.4
Upon issuance of a construction permit to Link the City will set
up a billing process within its accounting system which will
generate monthly invoices to Link. Link must make payment
of such invoices within 30 (thirty) days of issuance thereof.
6.5
Late payment or non-payment will be dealt with in terms of
the City‟s Credit Control and Debt Collection Policy as
amended from time to time.
6.6
The City will update its records with regard to the extent of the
City infrastructure utilised by Link on a monthly basis,
as
reflected in construction permits issued, and adjust billing
figures accordingly.
DURATION OF AGREEMENT
7.1
This agreement will endure for a period of fifteen years from
the date of signature hereof by the last signatory, unless
terminated by agreement or unilaterally by either party in
terms of the provisions contained herein, provided that in
respect of installations authorised after commencement of
this agreement, the fifteen year period will be reckoned from
the date of such authorisation.
7.2
During the currency of this agreement the City will be free to
grant similar rights to other electronic communications
licenses in its sole discretion.
MAINTENANCE OF THE CITY‟S
CLEARANCE OF BLOCKAGES
INFRASTRUCTURE,
INCLUDING
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8.1
All maintenance of the City‟s sewer and stormwater pipes,
both planned and reactive, into which Link installs cabling will
remain the responsibility of the City, as per its statutory
responsibilities to ensure uninterrupted service delivery.
8.2
The City will be entitled to carry out maintenance using
methods and equipment at its discretion,
and (as
contemplated in Clause 15 below) will not be liable for any
damage to Link‟s cables which occurs during reactive or
emergency maintenance (as opposed to planned
maintenance).
8.3
Link may with the approval of the City supplement the City‟s
maintenance activities by cleaning and inspection subject to
the following conditions:
8.3.1 A complete method statement for each activity must
be provided to the City, including detailed plans
incorporating accommodation of flows, ventilation,
traffic management and risk to City services.
8.3.2 Link indemnifies the City against any public liability
claims which may arise from their action/s.
8.3.3 If Link,
while installing or maintaining its cabling,
causes any damage to the City‟s infrastructure, Link
will be responsible for repairing that damage
immediately to the reasonable satisfaction of the City.
8.3.4 Subsequent to cleaning by Link of the City‟s
infrastructure, CCTV footage of the interior of pipes
pre- and post-cleaning must be provided to the City in
an agreed format, within seven days of cleaning.
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MAINTENANCE OF LINK‟S CABLES
9.1
When requiring to conduct maintenance to its cables, Link
must apply to the City for a wayleave in order to gain access
into the relevant pipe/s.
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9.2
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Upon completion of maintenance work Link must notify the
City accordingly.
REDUNDANCY/DECOMMISSIONING/REFURBISHMENT
INFRASTRUCTURE
OF
CITY
10.1
The City may at any time resolve that infrastructure into which
Link has installed cables is redundant and needs to be
decommissioned.
10.2
Upon taking a decision to decommission infrastructure and to
remove or upgrade pipes, the City will notify Link as soon as
possible of its decision, and thereafter Link will be granted a
period of thirty working days to remove all its infrastructure
from pipes to the satisfaction of the City.
10.3
In the event of upgrading of pipes, Link will be permitted to
reinstall its cabling upon completion of the upgrade, and the
City will notify Link of such completion.
10.4
In the event of temporary unavailability of pipes due to
upgrading,
refurbishment or replacement of existing
infrastructure, the City will not be liable for costs incurred by
Link to ensure continuity of service.
10.5
Link‟s liability for payment of charges as per clause 6 is only
applicable during periods when there is a cable present in
the relevant pipe/s.
10.6
Should Link wish to relocate cables removed from
decommissioned infrastructure it must follow the process to
obtain new wayleaves in respect of the proposed new
route/s of the cables.
REDUNDANCY AND DECOMMISSIONING OF LINK INFRASTRUCTURE
11.1
Should any of Link‟s infrastructure become redundant and/or
need to be decommissioned, Link will be obliged to remove
such infrastructure from the relevant City pipes.
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11.2
Link must apply to the City for a wayleave for purposes of
gaining access to the City‟s systems for removal of
infrastructure.
11.3
Upon completion of removal Link must provide a close out
report to the City including CCTV footage of the interior of
the relevant pipes and access chambers subsequent to
removal.
INTENDED POLICY AND BY-LAW PROVISIONS TO SUPERSEDE TERMS
AND CONDITIONS OF AGREEMENT
12.1
It is recorded and confirmed that it is the intention of the City
to develop a policy and/or a by-law governing applications
by electronic communications licensees to install cables in
City infrastructure.
12.2
When such policy and/or by-law enter into force, its/their
terms and conditions will apply to this agreement instead of
the terms and conditions recorded herein, insofar as they
differ from this agreement,
on conditions that nothing
contained in this agreement will deprive Link of its right to
approach the appropriate court for relief if such policy and/or
by-law unlawfully deprives it of its right to access to the City‟s
infrastructure, or unlawfully restricts or interferes with that right.
GENERAL OBLIGATIONS OF LINK
Link shall be obliged to:
13.1
ensure that the City‟s infrastructure is unharmed when
installing and maintaining its cabling therein, including the
sewer and stormwater pipes and all infrastructure and
property ancillary thereto and in the vicinity thereof;
13.2
repair or make good by way of financial compensation, at
the City‟s reasonable discretion,
any damage caused to
City infrastructure arising from the installation or maintenance
of its cabling therein;
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13.3
ensure that the presence of its cables in City infrastructure
does not interfere with the operation of the City‟s sewer and
stormwater systems;
13.4
advise the City immediately of anything untoward of which it
becomes aware with regard to the sewer and stormwater
pipes in which its cabling is installed, including blockages
thereof;
13.5
move its infrastructure outside of the sewer and stormwater
systems as required by the City, at its cost.
INDEMNITY BY LINK
Link hereby indemnifies and holds the City harmless against any loss,
damage, costs or claims which arise, whether claimable by
whosoever,
from the presence of Link‟s cables in the City
infrastructure, or Link‟s installation and maintenance of such cables.
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LIMITATION OF CITY‟S LIABILITY
15.1
The City shall not be liable to Link for any loss or damage to its
cabling, howsoever caused.
15.2
The City shall furthermore not be liable for any losses suffered
by Link due to interruptions in its electronic communications
service occasioned by maintenance, relocation, upgrading,
modification or any other work performed by the City on its
infrastructure in accordance with its statutory service delivery
obligations.
15.3
Link must inform its clients that they will not have claims
against the City in respect of any interruptions to their services
obtained from Link.
15.4
The provisions of this Clause 15 are only applicable to
situations of reactive or emergency maintenance, and not to
planned maintenance by the City.
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BREACH AND CANCELLATION
16.1
In the event that either party („the defaulting party‟) commits
a breach of any of the terms and conditions of this
agreement and fails to rectify or remedy such breach within
seven days (or such longer period as may be mutually
agreed) of receipt of a written notice calling upon it to rectify
or remedy such breach,
the other party („the aggrieved
party‟) shall be entitled to claim specific performance of the
terms and conditions of the agreement, or to cancel the
agreement forthwith, without prejudice to any rights accrued
prior to termination.
16.2
Any provisions of this agreement which are expressed to or by
their nature survive termination will continue to impose
obligations upon the relevant party subsequent to termination
in consequence of breach.
16.3
The provisions of this clause do not detract from the right of
the City to take immediate action to ensure ongoing service
delivery with regard to stormwater and sewer services.
DISPUTE RESOLUTION
17.1
The parties mutually undertake to use their best endeavours
to settle any dispute which may arise between them via
discussion and negotiation.
17.2
If the parties are unable to resolve any dispute via discussion
and negotiation,
then by mutual agreement the dispute
may be determined in accordance with the rules of the
Arbitration Foundation of South Africa by an arbitrator or
arbitrators nominated by it, with the proceedings to be held
at Cape Town.
A decision taken by the duly appointed
arbitrator or arbitrators shall be final and binding upon the
parties.
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17.3
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Nothing contained in this clause shall detract from the right of
either party to approach a court of competent jurisdiction for
relief.
GENERAL
18.1
Each provision of this agreement,
except those that
constitute essential provisions for the validity of the
agreement, shall be deemed to be separate and severable
from the remaining provisions. If any such provision is found
by a court of competent jurisdiction to be invalid or
unenforceable,
then notwithstanding such invalidity or
unenforceability, the remaining provisions of this agreement
shall remain of full force and effect.
18.2
This agreement constitutes the entire agreement between
the parties regarding the subject matter thereof, and save
as expressly provided herein, no amendment or waiver of its
terms and conditions shall be effective unless reduced to
writing and signed by both parties.
18.3
No extension of time or other indulgence granted by one
party to the other shall constitute a waiver of the rights or the
party granting such extension or indulgence.
18.4
Link may not assign or cede any of its rights or obligations in
terms of this agreement without the consent of the City.
18.5
This agreement may be signed in counterparts, all of which
taken together shall constitute a single instrument.
DOMICILIUM A DDRESSES:
19.1
19.1.1
The parties select the following addresses and electronic
communication details as their domicilia for purposes of
mutual notifications under this agreement:
The City: Office of the City Manager, 5th Floor
Podium Block, 12 Hertzog Boulevard, Cape Town
8001 AND Office of the Executive Director: Utility
Services (same address) AND Office of the
Commissioner: Transport for Cape town (same
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address.
19.1.2
Link:
19.2
Any notice or communication required or permitted to be
given in terms of this agreement shall be valid and
effective only if in writing.
19.3
Either party may by notice to the other party, change its
domicilium citandi et executandi to another physical
address in the Republic of South Africa.
19.4
Any notice to either party contained in a correctly
addressed envelope and:
19.4.1
sent by prepaid registered post to it at its
domicilium citandi et executandi shall be
deemed to have been received on the fourth
business day after posting (unless the contrary
is proved); or
19.4.2
delivered by hand to a responsible person
during ordinary business hours at its domicilium
citandi et executandi shall be deemed to
have been received at the time of delivery.
19.5
Any notice given by telefax shall be deemed to have
been received by the addressee, in the absence of proof
to the contrary, immediately upon issuance, by the
transmitting telefax machine, of a report confirming
correct transmission of all the pages of the document
containing the notice, or upon receipt by the transmitting
telefax machine, at the end of the notice being
transmitted, of the automatic answer - back of the
receiving telefax machine.
19.6
Notwithstanding anything to the contrary herein contained,
a written notice or communication actually received by a
party shall be an adequate written notice or
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communication to it, notwithstanding that it was not sent to
or delivered at its chosen domicilium citandi et executandi.
SIGNED on behalf of the City at Cape Town on the ____ day of
___________________ 2015.
AS WITNESSES:
1
_______________________________
__________________________
2
_______________________________
SIGNED on behalf of Link at ________________ on the ____ day of
___________________ 2015.
AS WITNESSES:
1 _______________________________
__________________________
2 ______________________________
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