Department of Communications Strategic Plan 2009-2012

Meeting report

Ms Gerda Grabe, Acting Director-General, informed the Committee that the Department of Communications (DOC) had developed its 2009-2012 strategy in line with the Medium Term Strategic Framework that was informed by the electoral mandate. The strategic plan underwent reprioritization following budget cuts from the National Treasury [see document].

Mr Harry Mathabathe, Deputy Director-General: Finance and ICT Enterprise Development, stated that the Department’s functions consisted of developing Information and Communication Technology (ICT) policies and legislation, developing reliable and affordable ICT infrastructure, strengthening the Independent Communications Authority of South Africa (ICASA), exercising oversight over State Owned Enterprises (SOEs) and to fulfill South Africa’s continental and international responsibilities in the ICT field.

The Presidential National Commission’s (PNC) mandate was to advise the President on the use of ICTs to enhance the country’s global competitiveness, to facilitate the development of an Inclusive Information Society (IIS) and to support efforts aimed at making South Africa and Africa equal members of the Global Information Society. The PNC’s function is to advise on building an IIS and to facilitate the development of an IIS in South Africa [see document].

The Department discussed its Medium Term Strategic Framework. Its strategic goals include enabling the maximization of investment in the ICT sector, ensuring that ICT infrastructure is reliable and affordable as well as secured to meet the needs of the country, accelerating the socio-economic development of South Africans, building an effective information-age organization, enhancing the role of ICT SOEs as the delivery arms of government and contributing to building an inclusive information society. [see document]

The PNC’s strategic goal includes the Information Society and Development (ISAD) plan finding expression in the National Spatial Development Programme (NSDP), Provincial Growth and Development Strategies (PGDS) and Integrated Developments Plans (IDPs). Other goals include creating Information Society enabled youth, improving the quality of life of the poor by prioritising second economy interventions, integrating and coordinating the building of the Information Society, making the PNC on ISAD the hub of government machinery for the development of the Information Society and initiating efforts in making South Africa and Africa an equal member of the global information society [see document].

The Medium Term Expenditure Framework (MTEF) budget allocation for 2009/10 would be divided between administration costs, ICT international affairs, ICT policy development, ICT enterprise development, ICT infrastructure development and the PNC. The largest amount of funds would be allocated to ICT enterprise development and ICT infrastructure development transfers. SOEs that would receive funding included the South African Post Office (SAPO), South African Broadcasting Corporation (SABC), Sentech, the National Electronic Media Institute of South Africa (NEMISA), Universal Service and Access Agency of South Africa (USAASA), the .za Domain Names Space and the Independent Communications Authority of South Africa (ICASA).

In terms of human resource capacity, 306 of the 429 positions available in the DoC were filled. There were 30 employees additional to the Department and of the 153 vacancies, 76 were unfunded.

ICT policy development consisted of developing and monitoring the implementation of the Broadband Policy, developing an integrated National ICT Policy, improving the quality and availability of ICTs, implementing the Broadcasting Digital Migration Policy and operationalising the Meraka e-Skills Institute. The Meraka e-Skills Institute would focus on skills development and industry related issues. It would advance the quality of life of the South African people and the workplace readiness of South Africa’s graduates.

ICT infrastructure development would focus on Cyber Security Policy, the SA National Computer Security Incident Response Team, the FIFA 2010 World Cup, the e-schools connectivity plan and the National Internet Policy. ICT international affairs and trade would support the development of UhuruNet (submarine cable) and UmojaNet (terrestrial cable). ICT enterprise development would focus on business efficiency of Small Medium and Micro Enterprises (SMMEs) as well as SOEs.

The PNC would ensure that provinces and municipalities were supported to incorporate the ISAD plan in to provincial development plans. They would also look at computer based functional literacy for rural women, effective and adequate measurement of the information society development in South Africa and ISAD institutional mechanisms.

The Department’s top five priorities included Broadcasting Digital Migration, the National Radio Frequency Spectrum, cyber security, ensuring affordable and secure ICT infrastructure and implementing the information society and development hubs programme [see document].

Discussion
Mr S Kholwane (ANC) asked what the situation with the e-rates was.

Ms Rosy Sekese, Deputy Director-General: ICT Infrastructure Development, answered that since its mention in the Electronics Communication Act (ECA), the implementation of the e-rate faced quite a few challenges mainly because at the time ICASA had not drafted and finalised the regulations. ICASA finalised the regulations in the beginning of March 2009. Since the gazetting of the regulations on e-rates, a committee was formed that consisted of the five main operators - Telkom, Neotel, Cell C, Vodacom and MTN. Now that the regulations were in place, the operators could focus on implementing the e-rates. The Department of Education (DoE) was also involved in making schools aware that they can apply for e-rates. There were already schools that had access to the internet that needed to apply for e-rates. The information regarding applications for e-rates could be found on the DoE’s website.  

Mr Kholwane accepted the response but he was upset that there was not a clear programme on e-rates. 

Ms Grabe stated that there were no targets or a programme for the e-rate. However, the Department should be in a position to provide this information once an agreement was reached as to how the project would be rolled out. She asked the Committee to give the DoC the opportunity to finalise the project with the relevant role payers. 

Mr L Mkhize (ANC) looked at the e-Literacy training programme. He asked if the DoC was conducting the programme while children were serving their sentences or after they completed their sentences.

Mr Mokwining Nhlapo, Deputy Director-General: PNC on ISAD, stated that the DoC was working with the Department of Correctional Services (DCS) to capacitate young offenders. The DCS had a programme that stated when the young offenders would go for training. The DoC provided the e-literacy programme while the DCS provided the infrastructure and identified offenders that were ready to be trained. 

Ms J Kilian (COPE) noted that there were thirty employees that were considered additional to the Department. There were also 153 vacancies, of which 77 were funded while 76 were unfunded. She asked if the 76 unfunded vacancies had occurred because of the smaller budget. She also noted that there were vacancies in the SABC board and asked what the DoC would advise the Minister to solve the problem. There were serious challenges facing the SABC and one of the Department’s responsibilities was to ensure that the entity was functioning properly.

Ms Basani Baloyi, Acting Chief Operating Officer and Deputy Director-General: Governance and Administration, stated that there were 30 employees displaced within the Department. When the DoC reviewed its structure in 2007, they did not integrate the Institute of Software and Satellite Applications (ISSA). Of the 30 positions, 13 of those were from ISSA. The DoC was still in the process of repositioning ISSA and finalising its structure. The Meraka e-Skills Institute’s structure was also being finalised. Of the 30 positions, three people were employed to support the Institute. The DoC was currently in the process of resolving the issue. Regarding vacancies, the DoC was meeting with the Minister for guidance on how to proceed. There were 76 unfunded positions; however, the DoC hoped to receive more funds from Treasury to fill the positions.

Mr Mathabathe addressed the issue concerning the SABC. There were a number of challenges that the Department was aware of. The first problem concerned the funding of the SABC. It was universally accepted that the funding model was not working. The majority of the public funding came from advertising. This was being resolved between the DoC, the SABC and National Treasury (NT) so in the coming MTEF there would be proposals that would address the problem. Under the current climate, it was understandable that the Government would not be able to fund the SABC completely. They would have to adopt a strategy that was suitable for South Africa.

The DoC was also aware that there were governance challenges at the SABC. The previous Minister had written and met with the board to ask them to deal with the challenges they faced. The current Minister had also made the SABC his number one priority. The DoC also picked up challenges surrounding financial and budgetary controls. The Department met with the SABC and informed them that they needed to correct the challenges they had internally before they could plea for funding.

The Chairperson stated that the former Director-General was asked at a previous meeting if there was Cabinet approval for the UhuruNet (submarine cable) concept. The Committee was told that there was not. He asked why the concept was one of the Department’s priorities if the programme had not received Cabinet approval or if it had been approved.

Dr Keith Shongwe, DDG: ICT International Affairs and Trade, stated that the UhuruNet project’s purpose was connecting African countries to the rest of the world via an under-sea submarine cable. In 2007, Parliament ratified protocol on the regulatory and policy framework of the project. The Protocol called on participating countries to support the roll out through certain interventions.

Mr J de Lange (ANC) stated that this did not mean that the project was approved by Cabinet.

Dr Shongwe replied that the DoC was of the understanding that the project was approved at the Cabinet Lekgotla in June 2007. The DoC would verify this.

Ms Grabe stated that the decision was taken at the Lekgotla in June 2007. The DoC was of the understanding that decisions made at the Lekgotla were binding and therefore moved forward with the project.

The Chairperson asked the DoC to provide the Committee with proof, as the previous Director-General for the DoC said that it was not approved.  

The Chairperson asked what the PNC was doing and why the government was spending R34 million on an entity that was not working. He noted that the PNC had not held any meetings in the last year. If the PNC was of value to society, where should it be located? He also asked what the Department’s plans were for filling senior positions.

Mr Nhlapo stated that the PNC was established in 2001 by the President to facilitate and coordinate other government departments and applications with the DoC. A structure was needed to drive the Information Society (IS), as it was an initiative that spanned across all sectors. The government needed both local and international experts’ advice. For this to happen, the country needed a secretariat whose role would be to coordinate meetings between the advisers and the government. Hence, in the Information Society and Development Plan that was approved by Cabinet in 2007, there was a framework for the building of the Information Society. The framework also contained an institutional mechanism that would look at which structures were needed for plans. The Secretariat would play the role of facilitating and coordinating plans between different government departments. It was true that that the PNC advisers had not yet met for discussions. When the PNC was first created, it was a large structure with about 32 advisers and local ICT experts. These positions were filled with Directors-General and Chief Executive Officers from different companies and state-owned enterprises. Once these people left their positions in the companies and state-owned enterprises, it was unsure as to whether they would retain their position as advisers in the PNC. At one point the DG of the DoC was the Chairperson of the PNC. He was the only full time member when the Commission was established. The work of the PNC was seen to be closely related to that of the DoC; however, it had separate plans and programmes. The DoC engaged the Presidency just before the new administration. The DoC told the Presidency that Cabinet had approved certain institutional mechanisms. The Presidency stated that the work of the Information Society was important and Cabinet had made a decision to pursue this, therefore the work had to be coordinated. The Minister of Communications might have to play the role of championing the work. The Minister stated that the leadership of the whole Department needed to talk to him, as he needed to advise the Presidency on the structure of the PNC. The work of the IS enhanced the work of the DoC. The Department’s role was to implement the infrastructure for the IS; however, it would need coordination and cooperation from all government departments. Specific departments that contributed to the IS programme included the Department of Arts and Culture and the Department of Science and Technology.

Ms Grabe stated that all the issues pertaining to the future role of the PNC would be addressed in the scenario document that was requested by the Minister. This was a matter of urgency. 

Ms Grabe stated that the position for the Director-General was advertised and the DoC was in the process of appointing someone. The DoC started implementing a new, approved structure last year and was committed to filling the sixty critical positions. This was achieved with the money that was available to the Department. This year, the Department would look to fill the unfunded positions with the funds they would be allocated. The DoC was now in a position to fill not only senior management positions, but also other critical middle management vacancies.

Mr J De Lange (ANC) discussed the relationship between the DoC and SOEs. He stated that when agencies were created to run government functions, the relationship between policies and operational issues became worrying. Operational issues were the domain of the entities, while policy issues had to be set by the government. Now, it looked as if both these responsibilities had shifted to the entities. Some entities like ICASA were absolute. He stated that he could be wrong but it was the overall impression he got from the Department. He asked the DoC to respond to this observation.  

Mr Mathabathe stated that the Department’s plan for the next three years spoke about developing policy and integrating policy for Information and Communication Technology (ICT) and broadcasting. The DoC would be sitting down with SOEs to discuss how they could align their policies to government priorities and objectives.

The Chairperson addressed the issue of the SABC. The first was that the SABC board had to submit quarterly reports and monthly financial reports. He asked if the DoC received quarterly reports and monthly financial reports. If they did, what was the Department’s response? The DoC should have see SABC’s financial crisis coming. If they did not receive the reports, why didn’t the Department demand it?

Mr Mathabathe answered that the DoC sat down and looked at the SABC’s financial statement’s and cash flow projections when the entity needed cash injections. Now the DoC was looking at the SABC’s financial statements almost on a daily basis to find out what was happening financially. The Department told the SABC that there were changes that could take place internally that would alleviate the cash flow challenges they experienced. Previously, the SABC did not submit their quarterly reports timeously; however, for the last three quarters all the reports were submitted on time.

Mr Mathabathe admitted that the Department saw the SABC’s financial crisis coming. The Department warned the SABC that they needed to ensure that there was money available before they embarked on any expenditure. The previous Minister wrote to the SABC warning them of this.

The Chairperson stated that Committee would be requesting the quarterly reports and the financial reports received from the SABC as well as the letters written by the previous Minister. This would be critical if the Committee was going to be instituting an enquiry for the removal of the board. The Chairperson asked for this request to be put on record. The documents would have to be submitted to the Committee before the SABC appeared before them.

Mr van den Berg stated that the SABC had deteriorated over a period of time and the worst part was that television and radio were the only means of information to those living in rural South Africa. The situation at the SABC reflected poorly on the Department of Communication and this in turn reflected poorly on the Portfolio Committee on Communications.

Mr Kholwane noted that when the SABC visited the Committee late last year, they did not indicate that there was a financial crisis or that they were experiencing financial constraints. He asked if the DoC knew at that time that the SABC was moving towards a financial crisis.

Mr Mathabathe stated that the Department was aware of the SABC’s losses. However, the global economic crisis also took them by surprise and resulted in there being bigger losses and bigger problems. The Department did not anticipate the effect of the economic downturn. And therefore the SAABC could not raise the amount of revenue they planned to raise. The Minister was talking to the Presidency and the SABC board to come up with a solution as soon as possible.  

Mr De Lange noted that in order for there to be quorum in the SABC board, there had to be nine members present including the chairperson and deputy chairperson. Once the chairperson and deputy chairperson resign, you cannot reach quorum. Therefore, the board cannot make any decisions. At the moment, the board was a “dead duck”. What was the DoC putting in place in the mean time to ensure that the government was not losing anymore money and that illegal decision were not being made? The board could not make any more decisions since there was no deputy chairperson and chairperson. They could not make quorum, therefore any decision made by the board would be illegal. 

Mr Mathabathe replied that the DoC was aware of the challenge regarding quorum. The Minister met with the board to discuss the issue however, the DoC had not heard any legal opinion on the matter yet. 

Ms Kilian stated that it seemed that the whole SABC structure was overburdened. All of these issues should have alerted the Department at an earlier stage. At this stage the Committee and DoC needed to take very firm and quick actions, as the problem would affect the Department’s other priority, which was to provide support to Small, Medium and Micro Enterprises (SMMEs). Companies that were working for the SABC were not being paid. She wanted to know if there was sense of urgency within the DoC to resolve this issue. 
  
Mr Mathabathe stated that this issue was the Minister’s priority as well as the Department’s. Steps were being taken to resolve the problem. 

The Chairperson commented that the Committee was extremely worried about the SABC’s situation. If the problem was not resolved before the Committee meeting with the SABC the following week, the Committee would have make a decision about the SABC.

Mr de Lange suggested that the Committee needed to look at the objectives and priorities for all DoC institutions so that when they appeared before the Committee, Members can see if institutions were in line with their policies.

Ms Kilian agreed with Mr de Lange. The Committee needed to know what the institutions’ mandates were so they could see if the institutions’ funding models matched their mandates.

Mr Norman Munzhelele, Acting Deputy Director-General: Policy Development, stated that the Communications sector was dynamic and that it was always changing. The DoC needed to look at how they could redefine some of the institutions mandates in an ever changing environment and in line with global best practice. The DoC needed a harmonized, legal policy framework. 

The Chair requested a policy table from the DoC stating policy objectives of all their institutions. 

Ms M Magazi (ANC) stated that it was important for the DoC to engage with the Committee about the UhuruNet matter. 

Ms R Morutoa (ANC) stated that it was concerning that the DoC was not completely sure whether the UhuruNet project was approved by Cabinet.

The Chairperson was still unclear on the matter of the PNC. He stated that he still did not know what the PNC’s purpose was. He did not know whether the PNC was another department within the DoC or if it would be another SOE.

Ms Grabe stated that an executive decision was still to be made concerning the PNC. The Minister asked the DoC to address the various options they had concerning the PNC. These options included creating a department within the DoC, if the PNC could be absorbed in the Department and if part of the PNC could be moved to the National Planning Commission (NPC). The DoC would come back to the Committee on this issue.

The Chairperson addressed the issue of Telkom selling some of its shares in Vodacom to Vodafone and listing the rest on the Johannesburg Stock Exchange (JSE). The Department was involved in legal action on the Vodacom issue. ICASA took a different decision to the DoC. The Chairperson asked how two state structures took two different legal positions. The Committee would be discussing this issue with ICASA as well.

Mr Mathabathe stated that ICASA could explain their decision better. The DoC worked on this transaction for a year and received Cabinet approval. Initially ICASA did not oppose the transaction. A few days before the transaction was finalised, ICASA changed its mind. They did not speak to the Department. It was unfortunate that ICASA did this, as it undermined their integrity.

Mr de Lange commented that it would be a good idea to see how the Department has developed over the years. Nothing in the presentation told the Committee what the DoC achieved over the years. The Committee wanted to see how the Information Society has grown.

The meeting was adjourned.