Minister and Department of Communications: Follow up on Strategic Plan and budget 2011

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Communications and Digital Technologies

14 April 2011
Chairperson: Mr S Kholwane (ANC)
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Meeting Summary

The Acting Director-General presented the Department of Communications (DOC’s) revised strategic plan, which incorporated answers to the issues that the Committee had raised during a previous session. He noted that the Department aimed to fall in line with the strategic priorities of government. The amended strategic plan contained information on the ICT sector analysis, and the human resources plan, and also outlined strengths and weaknesses and threats and opportunities. The plan noted that investments and innovation were critical to infrastructure development. However, the current Medium Term Expenditure Framework (MTEF) infrastructure allocation of R 2.8 billion fell short of the required amount. Estimates were given in the broadband, digital terrestrial television, E-skills, rural connectivity, universal service broadcasting and job creation, as also for the Post Office Bank. Potential funding sources were identified, including the MTEF allocations, Infrastructure Fund, Job Creation fund, Universal Service fund and private sector. The Department had identified policy incentives that should stimulate investment and innovation. In order to drive matters forward, the Department needed a committed work force, and clear and strong political leadership. Opportunities existed for the Department to access the job fund and to create jobs, and the potential growth of the ICT sector was also an opportunity. The challenges were outlined as budget cuts, challenges at State Owned Enterprises and insufficient planning and execution and lack of strong leadership in the past.

The eight strategic goals that the Department planned to achieve in the financial year 2011/12 were outlined. Maximisation of investment in the ICT sector would lead to new business opportunities and socio-economic development, will partnerships being stressed between government, civil society and business. The budget was R1.8 billion, of which about 70% went to the Department’s entities. There would be some budget challenges in the financial year ahead. The Department then outlined the human resources plan, noting that 303 of the 465 posts had been filled, and the department was in the process of making appointments, including permanent appointments of Director General and Deputy Directors General.

Members were concerned about the continuing lack of leadership within the Department, and asked exactly when the key posts would be filled, and also asked what function the numerous senior appointees would be filling. They questioned why the Presidential National Commission (PNC) was still under the Department, asked about its functions, and noted that the intention was eventually to dissolve the PNC and incorporate its activities into the Department itself.  Members asked about the cut off date for digital migration, and the master plan. Members were concerned that in many instances there seemed to be duplication of functions, either across branches, or with other entities. The Committee further questioned why the Department had not made an allocation for the upcoming local government elections, for SABC coverage. They also asked about the unbundling of the local loop. The Committee noted that it would be useful for the Committee and the Department to hold informal sessions to make sure that all were agreed on priorities and issues.

Discussion
Ms N Magazi (ANC) referred to the MTEF Baseline Allocation, in which it was reported that the Presidential National Commission was allocated R 32,525 million. She asked why the PNC was still under the Department of Communications, saying that it was previously agreed that it would move.

The Chairperson reiterated the view expressed by Ms Magazi. He asked the Department to clarify its position on the PNC.

Dr Wesso noted that the PNC had a history with the Department and thus had a function to play with staff, programmes and projects.  He said the Department was in a process of re-thinking the PNC, and absorbing the functions it served into the Information Society and Development Branch.

Hon Roy Padayachie, Minister of Communications, clarified that the PNC structure, but not its form, was to be dissolved into the Department. The Minister also clarified the structure and function of the PNC within the Department. He expressed the Department’s intention of eventually dissolving the PNC
.
Mr C Kekane (ANC) congratulated SABC on its successful host broadcasting of the 2010 Soccer World Cup. He said that the outline of the strategic plan was very impressive, and asked whether the Department had creative ways to generate funds.

Ms J Killian (ANC) referred to page 57 and stressed her concern about the increasing number of senior officials of the Department, asking what function they would fulfil.

Minister Roy Padayachie noted that the crisis of confidence amongst staff members, together with the lack of leadership within the Department, had been major challenges. He said that there were a number of key vacant posts which needed to be filled, including that of the Director-General. He further expressed that by mid-May the Department should have appointed a permanent Director-General and thereafter all the vacant Deputy Director General posts would be filled. The Minister would be pleased to see the Department securing highly talented individuals to discharge the Department’s responsibility. He believed that government should pay more attention to policy execution and implementation rather than making new policies. He felt that the Department was a historically policy-making department, but that over time the the Department had lost its stature as a policy centre. He proposed that a new structure of the Department would include inter-governmental relations. He believed that the Department of Communications had to lead and develop the ICT sector.

Ms Magazi asked the Department to clarify, in detail, what the duties of the PNC were, and who were its commissioners.

Mr Themba Phiri, Acting Deputy Director-General, Department of Communications, said that the PNC was very critical to developing the ICT sector, and government, together with the private sector, would be further enhancing this sector. He believed that the PNC, with all its staff, programmes and projects, still had a major role to play. He further believed that the structure of the Department, with all the branches, was critical and effective.

Ms N Magazi agreed fully with the sentiments raised by Mr Phiri but expressed that some branches of the Department were overlapping and duplicating functions.

Dr Wesso agreed with the issues raised by Members on the matter of duplication and overlaps, and committed the Department to resolving the issue.

Ms Magazi asked why the target of training ICDL learners was 450 for both 2010/11 and 2011/12, rather than increasing.

Ms J Killian referred to Strategic Goal 2, noting the mention of community radio. She wondered if in this instance the DOC would not be duplicating the functions of the Media Diversity and Development Agency (MDDA). She further asked how the youth should access the E-skills programme.

The Chairperson asked the Department why there was no allocation for local government coverage for SABC. He stressed that SABC could not be expected to fund the election coverage, and that in the past the Department had catered for the SABC.

The Chairperson also asked how far the Department was with the Local Loop unbundling.

Mr Norman Munzhelele, Acting Deputy Director-General , Department of Communications, said that it was critical to ensure full competition in the sector for the unbundling of the local loop. He said the Department was expecting Independent Communications Authority of South Africa (ICASA) to be ready for the November 2011 deadline.

The Chairperson asked for the timeframes with regard to signal migration, and asked when the Department planned to publish a master plan for the migration.

Mr Sam Vilakazi said that by December 2011 the Department planned to have a commercial launch of the digital signal. He said that the Department had invited SABC, M-Net and Obistat. He further said that by 2013 the Department planned to have covered large areas. With regard to migration, the Department planned to publish the integrated plan for the migration after it workshop.

The Chairperson impressed upon the Department that it would be useful for the Department and the Portfolio Committee to hold an informal session where they could share notes.

The meeting was adjourned

Meeting report

The Chairperson welcomed the Minister of Communications, and thanked him for his hands on approach.

Department of Communications: Follow up and revision of strategic plan 2011
Dr Harold Wesso, Acting Director General, Department of Communications, noted that the presentation being made today was a reworked version of the Strategic Plan of the Department of Communications (DOC or the Department) that was presented to the Committee in March 2011. Dr Wesso said that it was based on the requests for additional information, and also now contained further details on the targets within the strategic plan. The amended version included information on the Information and Communication Technology (ICT) Sector Analysis, investment and iInnovation, nd contained an analysis of the strengths, weaknesses, opportunities & threats (SWOT), setting out of a human resource (HR) plan, risks, and monitoring and evaluation.

Dr Wesso highlighted the ten strategic priorities in the country and noted that the DOC would contribute to the speeding up of growth, buiding of economic and social infrastructure, enhancing rural development, strengthening human resources, international growth and cooperation and building a developmental state. 

Dr Wesso noted that the DOC’s strategic plan noted investments and innovation as critical to infrastructure development. He pointed out, however, that the current Medium Term Expenditure Framework (MTEF) infrastructure allocation was R 2.8 billion, which fell short of the required amount. He estimated that R7.5 billion would be required for broadband, R2.4 billion for Digital Terrestrial Television (DTT). He also noted that requirements for E-skills of R750 million, rural connectivity of R500 million, Broadcasting Universal Service of R900 million. Job creation required R9 billion and the allocation to the Post Bank or Post Office would be R1 billion. The strategic plan identified potential funding sources, and these had been set out (see attached presentation) as Infrastructure MTEF allocations (Short Term), the Infrastructure Fund, jobs fund, Universal Service fund and the private sector.

Dr Wesso then highlighted the policy incentives that were to stimulate investment and innovation. He noted the DTT Set Top Box (STB) Manufacturing Sector Development strategy, broadband, where Government was to be the anchor tenant, and the National Incentives Scheme for the domestic ICT industry.

To drive matters forward, Dr Wesso noted that there must be a committed work force, and political leadership with a clear vision and strategic direction. It was necessary to have an understanding of the legislative environment, and properly functioning financial and other systems. Dr Wesso named access to the Job Fund, for its job creation programme, and the potential growth of the ICT sector as part of the opportunities for the Department. He said that the challenges to the sector included budget cuts, government challenges at State Owned Enterprises (SOEs) and the duplication of State intervention amongst SOEs. The weaknesses had been named as insufficient planning and execution, and leadership instability at the DOC.

Dr Wesso then moved on to outline the eight strategic goals that the Department planned to achieve in the financial year 2011/12. The first strategic goal was to enable the maximisation of investment in the ICT sector, with specific focus on job creation. The second was to ensure that ICT infrastructure was accessible, robust, reliable, affordable and secured, to meet the needs of the country and its people. Strategic goal 3 was presented as creating new competitive business opportunities for the growth of the ICT industry, with the key target for 2011/12 being the National Incentive Scheme, where a document for the domestic ICT industry had already been developed. Strategic goal 4 was to accelerate the socio-economic development of South Africans by increasing access to, as well as the uptake and usage of ICTs, through partnership between business, civil society and the three spheres of government. Strategic goal 5 focused on contributing towards building a developmental State, including the improvement of public service and the strengthening of democratic institutions. Strategic goal 6 was to focus on enhancing the role of ICT SOEs, as the delivery arms of government, and to support the Regulator. Strategic goal 7 was to contribute to the global agenda, prioritising Africa’s development. Strategic goal 8 focused on facilitating the building of an inclusive information society to improve the quality of life.

Mr Sam Vilakazi Acting Deputy Director-General, Department of Communications, noted that the financial report he would now present did not differ much from the one he had presented to the Committee in March 2011. The budget for the Department of Communications was trimmed by roughly R300 million when compared to the previous year. The budget for 2011/12 was R1.8 billion, and 70% of this amount would go to the Department’s entities, the South African Broadcasting Cooperation (SABC), Independent Communications Authority of South Africa (ICASA), the educational institution NEMISA, Channel Africa, Universal Services and Access Agency of South Africa (USAASA), the South African Post Office (SAPO) and Sentech. He noted that there would be some budget challenges in the year ahead. He also noted that National Treasury had secured R100 million for broadband in the country.

Dr Wesso gave a brief outline of the Department’s Human Resource (HR) Plan. He noted that the Department had an approved structure of 465 posts, and 303 of those were filled. The department was in a process of filling the 162 vacant positions, and had already advertised 21 key vacant positions. The Department was still in the processes of finalising performance agreements with the Presidency.

Discussion
Ms N Magazi (ANC) referred to the MTEF Baseline Allocation, in which it was reported that the Presidential National Commission was allocated R 32,525 million. She asked why the PNC was still under the Department of Communications, saying that it was previously agreed that it would move.

The Chairperson reiterated the view expressed by Ms Magazi. He asked the Department to clarify its position on the PNC.

Dr Wesso noted that the PNC had a history with the Department and thus had a function to play with staff, programmes and projects.  He said the Department was in a process of re-thinking the PNC, and absorbing the functions it served into the Information Society and Development Branch.

Hon Roy Padayachie, Minister of Communications, clarified that the PNC structure, but not its form, was to be dissolved into the Department. The Minister also clarified the structure and function of the PNC within the Department. He expressed the Department’s intention of eventually dissolving the PNC
.
Mr C Kekane (ANC) congratulated SABC on its successful host broadcasting of the 2010 Soccer World Cup. He said that the outline of the strategic plan was very impressive, and asked whether the Department had creative ways to generate funds.

Ms J Killian (ANC) referred to page 57 and stressed her concern about the increasing number of senior officials of the Department, asking what function they would fulfil.

Minister Roy Padayachie noted that the crisis of confidence amongst staff members, together with the lack of leadership within the Department, had been major challenges. He said that there were a number of key vacant posts which needed to be filled, including that of the Director-General. He further expressed that by mid-May the Department should have appointed a permanent Director-General and thereafter all the vacant Deputy Director General posts would be filled. The Minister would be pleased to see the Department securing highly talented individuals to discharge the Department’s responsibility. He believed that government should pay more attention to policy execution and implementation rather than making new policies. He felt that the Department was a historically policy-making department, but that over time the the Department had lost its stature as a policy centre. He proposed that a new structure of the Department would include inter-governmental relations. He believed that the Department of Communications had to lead and develop the ICT sector.

Ms Magazi asked the Department to clarify, in detail, what the duties of the PNC were, and who were its commissioners.

Mr Themba Phiri, Acting Deputy Director-General, Department of Communications, said that the PNC was very critical to developing the ICT sector, and government, together with the private sector, would be further enhancing this sector. He believed that the PNC, with all its staff, programmes and projects, still had a major role to play. He further believed that the structure of the Department, with all the branches, was critical and effective.

Ms N Magazi agreed fully with the sentiments raised by Mr Phiri but expressed that some branches of the Department were overlapping and duplicating functions.

Dr Wesso agreed with the issues raised by Members on the matter of duplication and overlaps, and committed the Department to resolving the issue.

Ms Magazi asked why the target of training ICDL learners was 450 for both 2010/11 and 2011/12, rather than increasing.

Ms J Killian referred to Strategic Goal 2, noting the mention of community radio. She wondered if in this instance the DOC would not be duplicating the functions of the Media Diversity and Development Agency (MDDA). She further asked how the youth should access the E-skills programme.

The Chairperson asked the Department why there was no allocation for local government coverage for SABC. He stressed that SABC could not be expected to fund the election coverage, and that in the past the Department had catered for the SABC.

The Chairperson also asked how far the Department was with the Local Loop unbundling.

Mr Norman Munzhelele, Acting Director-General, Department of Communications, said that it was critical to ensure full competition in the sector for the unbundling of the local loop. He said the Department was expecting Independent Communications Authority of South Africa (ICASA) to be ready for the November 2011 deadline.

The Chairperson asked for the timeframes with regard to signal migration, and asked when the Department planned to publish a master plan for the migration.

Mr Sam Vilakazi said that by December 2011 the Department planned to have a commercial launch of the digital signal. He said that the Department had invited SABC, M-Net and Obistat. He further said that by 2013 the Department planned to have covered large areas. With regard to migration, the Department planned to publish the integrated plan for the migration after it workshop.

The Chairperson impressed upon the Department that it would be useful for the Department and the Portfolio Committee to hold an informal session where they could share notes.

The meeting was adjourned






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