The Department of Telecommunications and Postal Services (DTPS) and its entities presented their Strategic and Annual Performance Plans for 2015/16, with the Minister, Dr Siyabonga Cwele, in attendance.
In his opening remarks the Minister highlighted that the Department would prioritise the modernisation of the economy to deal with the challenges of access and affordability to up-to-date forms of communication, driving the provision of infrastructure, e-skills and e-Government to respond to the needs of the information society. The Department was seeking to assist in accelerating economic growth to the desired level of 5% by 2019, and was also working with the private sector to curb cyber crime in order to safeguard and protect government information. The Department had intervened in the crisis at the South African Post Office (SAPO) and wanted to come up with a sustainable turnaround strategy, as this was a key institution for delivering government services to the people.
The Department’s 2015/16 strategic priorities included broadband connectivity focused on radio frequency spectrum and cyber security, the cost to communicate, an Information Communication Technology (ICT) policy review, and a national e-strategy. Other priorities focused on the turnaround plan for the South African Post Office (SAPO), corporatisation of Postbank and a programme of action for the postal sector. The uptake of broadband had been slow and there had been no strategic usage of broadband to solve pressing societal problems. Estimated broadband penetration stood at 17%, and internet penetration stood at 48% in 2014. The current market structure was inefficient, costly, and duplicated infrastructure in the urban areas.
Members were concerned that the presentation by the DTPS generally lacked incentives that could attract the private sector to invest in key projects, as it spoke very little about economic development and job creation. They asked about the future of Postbank and the path that was likely to be taken by the entity in the future. They requested the Department to provide more information on whether the tender for the delivery of the set-top boxes had been awarded. Other questions focused on the breakdown of the 1 296 government institutions to be provided with connectivity in terms of location for the purpose of oversight visits, and the strategy in place to deal with cyber crime. Was there enough capacity to deal with the approval of rights for broadband national rollout? The Department was asked whether it had been structured correctly to focus on its strategic priorities.
The Universal Service and Access Agency of South Africa (USAASA) focused on the New Growth Path (NGP) targets, particularly on the creation of 100 000 new jobs by 2020 in the knowledge-intensive sectors of ICT, higher education, healthcare, mining-related technologies, pharmaceuticals and biotechnology. USAASA aimed to create 100% access to digital ICT for all South Africans by 2020 as a driver of new economic opportunities and digital equity. Interim implementing agencies included Sentech, Broadband Infraco, Telkom, the South African National Roads Agency Limited (SANRAL), Eskom, Transnet, and the private sector. The common challenges facing USAASA included insufficient resources for broadband infrastructure coverage, many role players but uncoordinated infrastructure interventions, no comprehensive policy for ICT in education, no national framework for e-leaning and collaboration, the high cost of terminal devices, infrastructure deployment and content development not being aligned, power supply, and basic schools infrastructure not being in place.
Members wanted to know whether Enterprise Resource Planning (ERP) had been implemented and the cost involved in the planning of the process. How was USAASA intending to incentivise the private sector to invest in under-served areas, as this had not been mentioned in the presentation? They also highlighted that it was concerning that USAASA seemed to have a lot of unbudgeted board meetings and wondered whether there was any specific reason for this. More clarity was sought on the tender process involved in the award to two broadband sites to upgrade or extend the networks and connect at least five schools and clinics in each locality. How many set-top boxes would be distributed in the next three years? It was important for the Committee to know whether the tenders for the manufacturing of set-top boxes had been awarded to any companies, as there had been no public announcement on the tender.
The National Electronic Media Institute of South Africa (NEMISA) was looking at ways to leverage ICT capabilities and tools to address the socio-economic needs and improve the human resource base of the country for equitable prosperity and global competitiveness. There was currently a process to advance the Ikamva National e-Skills Institute of South Africa (INeSI) into a fully-fledged public entity with its own enabling legislation, without delaying its present functioning. Both the National Treasury and DPSA had proposed that the stipulated process needed to be followed in this regard.
Minister’s opening remarks
Dr Siyabonga Cwele, Minister, Department of Telecommunications and Postal Services, said that the State Information Technology Agency (SITA) had appointed a new CEO. This was critically important to ensure there was stability in the entity. The Department was now in a process of finalising the long-awaited appointment of a CEO for the National Electronic Media Institute of SA (NEMISA). The Department would continue to look at ways to deal with challenges so as to maintain stability and the execution of key mandates. It was important also to fill other critical posts, like Chief Financial Officers (CFOs) and Chief Operating Officers (COOs) within both the entities, and the Department promised to finalise these appointments in the next three months.
The Department had intervened in the crisis at the South African Post Office (SAPO) and wanted to come up with a sustainable turnaround strategy, as this was a key institution for delivering government services to the people. The Department’s the key strategic elements to be delivered in the 2015/16 financial year would prioritise modernisation to deal with the challenges of access and affordability of forms of communication.
The Department would focus its attention on driving the infrastructure, e-Skills and e-Government to respond to the needs of the information society. There was also a need to assist in accelerating economic growth to the desired level of 5% by 2019. The Department was working with the private sector to curb cyber crime and to safeguard and protect government information. The Department had been mandated to ensure that affordable broadband was available. An effective e-Governance programme was important for the delivery of government services.
The current on-going disciplinary measures had been of concern to the Department, as they might potentially have disrupted its functioning. However, measures had been put in place to ensure this did not happen. The Department had met the Audit Committee last year and had raised the issue of consequent management, and it was in this regard that the Department had highlighted that there should be action taken against maladministration and other issues. The Department valued the role and input of the Committee, as it assisted in policy discussions.
Briefing by Department of Telecommunications and Postal Services (DTPS)
Ms Rosey Sekese, Director-General (DG), DTPS, stated that the Department’s 2015/16 strategic priorities were based on alignment with the National Development Plan (NDP), the Medium Term Strategic Framework (MTSF) and the 2015 State of the Nation Address (SONA). The priorities included broadband connectivity focused on radio frequency spectrum and cyber security, the cost to communicate, an Information Communication Technology (ICT) policy review, and a national e-strategy. Other priorities focused on the turnaround plan for the South African Post Office (SAPO), corporatisation of Postbank and a programme of action for the postal sector.
The uptake of broadband had been slow and there had been no strategic usage of broadband to solve pressing societal problems. The estimated broadband penetration stood at 17%, and internet penetration stood at 48% in 2014. The current market structure was inefficient, costly, and duplicated infrastructure in the urban areas. The Department could not roll out ICT infrastructure and services to reach all South Africans in line with the long term vision of a connected society. There was a slow prioritization, and therefore a slow migration to e-government services.
Ms Sekese said that South Africa’s high cost to communicate affected all sectors of society and remained a concern that had to be addressed through policy and regulatory instruments. The NDP confirmed that the price of services and equipment remained a significant barrier to expanding mobile phone and fixed-line use, with limited network competition further increasing costs. The NDP required the development of a seamless information infrastructure providing access to a wide range of converged services at a cost and quality at least equal to South Africa's main peers and competitors. The Department would continue to implement interventions within the Cost to Communicate Programme of Action which was aimed at facilitating investment in ICT infrastructure, promoting affordability of ICT services to consumers and facilitating market competition in the electronic communications market. The Department would further promote access to ICT infrastructure and enabling of the Broadband Policy (South Africa Connect).
Ms Sekese mentioned that in the 2015/16 financial year, the Department would be implementing the following interventions within the Cost to Communicate Programme of Action:
- Development of the policy direction on national roaming to facilitate access to infrastructure, improve competition in the market and reduce roaming costs.
- Development of a draft local loop strategy to ensure that quality improved, costs were reduced and fixed-line coverage was expanded to meet demand for high-speed telecommunications through increasing the reach of the local loop.
- Development of the policy direction on data costs aimed at reducing data costs following the broadband value chain analysis.
- Development and implementation of a monitoring and evaluation framework to assess the implementation and impact of interventions to reduce the cost to communicate, such as the effect of the reduction of wholesale termination rates on retail prices and on the on-net/off-net price differential.
The vision in the NDP adopted by Government in 2012 was in many ways the foundation of the ICT policy review process undertaken by government. The NDP stated that a “new policy framework would be needed to realise the vision of a fully connected society”. The policy review had not happened in isolation from other policy developments such as the National Broadband Policy (South Africa Connect) adopted in 2013. The ICT Policy Review would reinforce and extend the objectives set in the broadband plan. The policy process also recognised that the environment was changing rapidly and that policy interventions would need to be continuously assessed against the objectives set. It was thus being developed with a 2030 vision, but with specific focus on the next five years. Following the Cabinet approval of the National Integrated ICT Policy Green Paper, extensive consultation had been undertaken to inform the development of the discussion paper, which highlighted a range of policy options and possible policy approaches. The Department would utilise stakeholder input on the Discussion Paper to inform the finalisation and subsequent gazetting of the White Paper on a national integrated ICT policy. The White Paper would further inform the legislative programme of the Department going forward.
Ms Sekese highlighted that though ICT had the potential to facilitate South Africa’s economic development and contribute to job creation and poverty alleviation, ICT uptake and usage by government, citizens and businesses was relatively low in comparison with South Africa’s peers/comparator countries.The national e-Strategy was therefore focused on providing forward-looking strategic direction for the implementation of the ICT vision for South Africa. The National e-Strategy would serve as a basis to set a national agenda on ICT, in line with the NDP Vision 2030. The e-Strategy would also promote e-Government by ensuring that there was provision of infrastructure for universal access to services, as well as address uptake and usage of ICT by all, including rural and under-served areas. The NDP stipulated that the country had to develop a comprehensive and integrated e-Strategy that reflected the cross-cutting nature of ICT. Focus would also be on the development and implementation of an internet strategy aimed at increasing uptake, usage, access and awareness of the internet. Following the finalisation of the National e-Strategy Framework in the 2015/16 financial year, the Department would obtain Cabinet approval.
Ms Sekese saidd that the adaptation and modernisation of postal services was crucial to ensure their continued relevance and value, such that the existing postal infrastructure should be leveraged to provide an expanded range of goods and services to South Africans. Despite the declining trend in letter volumes, the postal services sector was an important component of the economic sector in South Africa, contributing approximately 3.16% to GDP. The Post Office was therefore an important national strategic asset, and its turnaround and sustainability was important to SA’s broad long-term developmental goals. Furthermore, the Post Office’s infrastructure had a far greater depth of reach to the citizenry than any other entity.
Following the development of the SAPO turn-around plan, the focus in the 2015/16 financial year would be on:
- Supporting, coordinating, monitoring and evaluating the implementation of the SAPO turn-around plan.
- Informing, facilitating, monitoring and evaluating the deployment of SAPO’s infrastructure in terms of post offices and Points of Presence (PoPs).
- Developing and obtaining approval of the National Address System Policy
The Postbank had a critical role in the financial service environment of South Africa, especially as it concerned economically marginalised citizens and those who were not in reach of the banking sector. Within this broader theme of universal service and access, the Postbank would lead the expansion of access to banking services to the majority of citizens, mainly in rural South Africa. The Postbank had a formidable customer base from which to launch new transactional services, including lending facilities, thus providing much needed financial services to those who currently did not have them.
In the 2015/16 financial year, the Department would focus on facilitating and coordinating the corporatisation of Postbank, with specific reference to:
- Licensing of the Postbank;
- Appointment of Postbank board members;
- Establishment of the Postbank Holding Company;
- Incorporation of the Postbank Company.
Mr Sam Vilakazi, DDG: Administration, said that the total budget allocation for the Department was R1.4 billion -- a reduction from R2 billion in the previous financial year. This was due to the movement of functions from the Department of Communications (DoC) to the DTPS. The budget allocation per programme for 2015/16 showed that infrastructure support would be allocated 45% of the total budget, followed by broadcasting, communication registration and support (32%) policy research and capacity development (7%), ICT International affairs (3%) and administration (12%). The budget for the South African Broadcast Corporation (SABC), Independent Communications Authority of South Africa (ICASA) and operational budget had been transferred from the DTPS to the new DoC due to the transfer of functions.
The Annual Performance Plan (APP) took into consideration the short to medium-term focus areas stemming from the NDP, the medium term strategic framework (MTSF) and the 2015SONA. Therefore specific interventions had been prioritised for the 2015/16 financial year, taking into consideration available resources and identified risks.
The strategic alignment (1) under the NDP focused on the urgent need for a full policy review. The MTSF focused on developing a new policy framework for ICT and the APP focused on the finalisation of the White Paper on a national integrated ICT policy.
The strategic alignment (2) under the NDP focused on ensuring 100% broadband penetration, and the MTSF also prioritised extending broadband penetration. The 2015/16 APP targets focused on the implementation of phase 1 of the digital development plan, prioritising on providing connectivity to 1 296 government institutions. There was also a need to develop an implementation plan for phase 2 of digital development.
The focus area for strategic alignment (3) under the NDP was the improvement of the quality, reducing the cost and expanding the reach of the local loop. The MTSF prioritised developing a strategy for the local loop to ensure that quality improved and costs were reduced. The 2015/16 APP targets planned to implement the cost to communicate plan of action, focusing on the development of a roaming policy direction, a draft local loop strategy, a policy direction on data costs, and a monitoring and evaluation framework implemented to assess implementation of interventions to reduce the cost to communicate
Ms Sekese said the strategic alignment (4) focused on the SONA 2015, which highlighted that the year 2015 would mark the beginning of the first phase of broadband rollout and the government would connect offices in eight district municipalities. Government had also decided to designate Telkom as the leading agency to assist with broadband rollout. The 2015/16 targets were for an e-Strategy and internet strategy to be developed and implemented to support the roll-out of e-Government and the broader advancement of digital opportunities, the review of the National Radio Frequency Spectrum and the development of a roadmap for the establishment of a wholesale open access network.
In an effort to ensure integrated and aligned planning, State-Owned Companies (SOCs) had been involved in the Department’s planning process, while relevant DTPS officials from core branches had participated in the strategic planning workshops of each SOC. A joint planning workshop had been held on 11 February 2015 to ensure alignment and synergy in terms of SOC priorities with those of the Department, based on the respective mandates of each SOC.
Ms Sekese took the Committee through the priorities of the SOC Unit. These included:
- The need to review the mandates and the funding models of SOCs under the auspices of the DTPS;
- Development of an oversight model for State Owned Companies under the DTPS;
- Development and approval of the ICT small, medium and micro enterprises (SMME) programme model;
- Facilitatating the full operationalisation and licensing of the Postbank with a full Board complement;
- Monitoring and evaluation of the implementation of the SAPO turnaround plan;
- Monitoring the financial sustainability of Broadband Infraco;
- Monitoring the implementation of the corporate/strategic plans of all the SOCs under the auspices of the DTPS;
- Facilitating the legal establishment of the iNeSi;
- Monitoring the implementation of shareholder compacts;
- Facilitating the rationalisation of State Owned Enterprises (SOEs).
The 2015/16 priorities for SAPO included the finalisation and implementation of the strategic turnaround plan (STP) involving a detailed corporate plan and the development of key priorities. Broadcasting digital migration (BDM) was focused on the alignment of SAPO’s distribution plan with the final approved BDM policy and qualification criteria. This involved:
- Conclusion of service level agreements (SLAs);
- Distribution of the digital set-top boxes, focusing on broadband access through the Post Office branch network;
- Positioning SAPO’s retail outlets to form the hub for broadband access;
- Partnering with Telkom to create SAPO hot-spots/ICT hubs within the SAPO retail outlets.
The Postbank corporatisation process included the following:
- Banking licence application process;
- Obtaining authorisation to establish the bank;
- Compliance with the regulatory and legislative framework;
- Approved memorandum of incorporation;
- Capacitating Postbank (Core banking IT systems, corporate structure, etc).
Ms Sekese said that the 2015/16 priorities for Sentech included infrastructure rollout, like the expansion of the Digital Terrestrial Television (DTT) network, completing four greenfield sites and installing 300 terminals. The Department also planned to assist Sentech to connect 33 community radio broadcasters and install 31 transmitters for SABC expansion. It was important for Sentech to generate a net profit of R195.7 million before tax and avoid financial irregularities, so as to obtain a clean audit.
The 2015/16 priorities for Broadband Infraco included strengthening capital expenditure management, and new product development for an additional revenue stream focused on a competitive open-access, carrier-neutral, connectivity enabler, that offered higher than industry service level performance and diverse route coverage. BBI had extensive pre-existing infrastructure that could be of vital importance in the implementation of SA Connect connectivity projects.
The 2015/16 priorities for the State Information Technology Service Agency (SITA) was comprised of a comprehensive procurement improvement strategy being implemented to improve procurement efficiencies and turnaround times, and lower IT costs for government. E-Government was important to drive modernisation of the public sector, to improve government business processes and enhance access to government services by the citizens, and to safeguard and protect government information.
The Department also planned to assist the Universal Service and Access Agency of South Africa (USAASA) and subsidise five million needy households with Set-Top-Boxes (STBs) through the scheme for STB ownership support. It would provide two municipalities in under-serviced areas -- Albert Luthuli local municipality and Vhembe local municipality -- with internet, and would connect three schools for people with disabilities in under-serviced areas with internet.
The 2015/16 priorities for the National Electronic Media Institute of South Africa (NEMISA) included building -- through campaigns, public awareness and partnerships -- a substantive formalised multi-stakeholder collaborative network involving government, business, SOCs, civil society, and organised labour that would contribute to the massification of e-skills delivery at all levels. Existing ICT education and training expertise, infrastructure and courses would be leveraged so as to produce three customised /targeted courses.18 existing ICT centres would be transformed into smart community knowledge centres to provide access to online courses and the training of 400 ICT practitioners, 1 250 e-literacy learners and 625 sector users.
Ms M Shinn (DA) said that all the entities that had presented to the Committee had emphasised that the splitting of the two Departments had been a disaster and should have been undone, as it had created confusion in the regulatory environment. How had the splitting of the two Departments impacted on the ICT policy review process? The splitting of broadcasting from the rest of ICT was totally against the world trends, the NDP and the ICT policy review. It was important for the Committee to know the criteria that had been used to choose Telkom as the leading agency in the rollout of broadband. Had the tender process been put in place to allow for fair competition? It was concerning that there was virtually no mention of the NDP in both the Strategic Plan and APP. The Department had also failed to highlight the critical role ICT played in economic development and job creation, and the major focus seemed to be on e-Governance. The presentation generally lacked incentives that could attract the private sector to invest in key projects, as it spoke very little about economic development and job creation.
Mr C Mackenzie (DA) said the ICT sector had been a rapidly growing industry in the world and the Department needed to keep up with that pace. It was clear from most of the Department’s plans that Digital Terrestrial Television (DTT) had been transferred to the DoC, except for the physical delivery of set-top boxes. He sought clarity on whether there had been an official decision taken to transfer DTT to the DoC. The NDP spoke about the importance of Public-Private Partnerships (PPPs) and part of the government’s strategy involved great collaboration between the State and industry. He wondered whether the Department had been noticing the Western Cape government’s model for the rollout of broadband, as it was a model that could be emulated throughout the country.
Ms J Kilian (ANC) said that Telkom had the largest terrestrial fibre network, and that could be one of the reasons why it had been chosen as the leading agency for the rolling out of broadband. It was concerning that most of the wi-fi spots and fibre network were located in urban areas, and she urged the Department to also expand this to remote rural areas to reduce the digital divide. She wanted to know whether the Department had been structured correctly to focus on the strategic priorities. This was important, considering that the Department had been leveraging the private sector to a very large extent. To what extent was the Minister and the Department formalising a regular interaction with the private sector, as this was important for the acceleration of the roll out of broadband to remote areas.
Ms D Tsotetsi (ANC) asked about the breakdown of the 1 296 government institutions to be provided with connectivity in terms of their location. This was for the purpose of oversight visits. Cyber crime was an issue that was likely to be a threat to the security of the internet and personal information, and needed to be addressed promptly. Was there enough capacity to deal with the approval of rights for national broadband rollout? What was the time-frame for this? She also wanted to know about the future of the Postbank, and the path that was likely to be taken by the entity.
The Chairperson said he appreciated the Minister’s assurance that he was dealing with the challenges within the Department, especially the lack of capacity in critical posts. It was impossible for the Department to achieve its strategic objectives without adequate capacity. It was commendable that the Minister had promised that all the critical posts within the Department and entities would be filled within the next three months, and she hoped that this process could be expedited. She also welcomed the appointment of the NEMISA and SITA CEOs, and hoped that all entities could have their CFOs in order to deal with the issues of finance. She commented that most of the documents were unclear and vague on the position of the Department, and this was one of the weaknesses that needed to be rectified. It was often difficult to monitor the budget for International Relations, as a branch within the Department.
The Chairperson said that it was totally unacceptable for the costs for consultancy to increase from 1% to 18.3%, as the priority should be on increasing the internal capacity of the Department and its entities. The only reasonable increase in the use of consultants should be 5% and not more. The Department would have to devise a plan to reduce the cost of consultancy, and also to advertise for the filling of posts. There was a need for an alignment between what had legislated and what was in the APP, so as to accelerate the implementation of legislation.
The Minister responded that he was not aware of confusion existing following the splitting of the two Departments, and if there was any confusion then it should be communicated through the proper channels. The purpose of splitting the two Departments was not in any way intended to get rid of the SABC, as this was an important institution, but was meant only to have a Department that would specifically focus on ICT. There was indeed a need to increase the capacity of the regulator so as to ensure that there was concurrence between the regulators and the entities. Experts had been involved in the splitting of the Departments, as it was important to focus specifically on ICT, broadband rollout and infrastructure. There were numerous departments that had been involved in the discussion for the splitting of the two departments, including the Department of Public Enterprises (DPE), which was housing entities like Broadband Infraco.
The Minister said that the Department would continuously work with the private sector in the development of infrastructure, as the private sector was also in need of the infrastructure for its operations. The focus in the rollout of broadband connectivity at the moment was on remote rural areas, as this was where the service was desperately needed. The Department needed to have a structured focus on the development of infrastructure in remote rural areas. He once again disputed that the splitting of the two Departments had created confusion in the regulatory environment and ICT policy review, as evidence proved otherwise. There was a need to take into consideration that the country was a little behind in the ICT area, and the creation of a department that would focus specifically on ICT was imperative.
The Minister said that there was already an existing infrastructure at Telkom that could be consolidated to all the government institutions that had the fibre network, to enable the country to provide broadband services to the masses. Telkom would also work with other entities to drive the delivery of broadband services to reach even those located in rural areas. The selection of Telkom as the leading agency in the rollout of broadband was also based on cost, as this was a SOC. It was important for the Department to finalise the spectrum policy so as to create a smooth path for the regulators, and this would create certainty in the market on how the spectrum would be used. The Department was quite aware of the challenges in the finalisation of spectrum policy, and that was why this process needed to be expedited.
The Department had been continuously engaging with the private sector on ways to expand the delivery of broadband connectivity, but this process would first require the finalisation of policies so that there could be certainty over the digital dividend. The Strategic Plan and APP touched extensively on the NDP, and the Department could not approve a document that did not relate to the NDP. The Department needed to find a way to work with the private sector that could improve economic growth and the Minister, Deputy Minister and the DG had been in constant engagement with the private sector. The Department would need to work together with the Department of Trade and Industry (dti) and Department of Small Business Development (DSBD) to create incentives for investment in SMMEs, as these were small companies that had been marginalised.
The Minister responded that the Department was encouraging foreign investment in the ICT sector especially in the manufacturing as this was an important tool for job creation and the South Africa companies would either partner or supported in the manufacturing of the technological products. The private sector should not only invest in big cities like Johannesburg and Cape Town but also smaller towns and remote rural areas. The DTT programme had been handed over to the DoC to be responsible with the project. The Department had not done an evaluation and assessment on the PPP in the Western Cape and therefore could not comment further on whether model was to be emulated to other provinces. The Department was working very closely with Western Cape and Gauteng as these were provinces that had plans in the rollout of broadband. The Department would also learn about the good and bad experiences from Western Cape and Gauteng on the implementation of phase 2.
The Minister said that the Department was aware that technology had been changing at an advanced pace and this was where the research institutions could play a crucial role in ensuring that the Department kept up with the pace of technological development. The Department was working very closely with the Department of Science and Technology (DST), particularly its research institutions, and was encouraging the entities also to work with these research institutions. The Department was planning to expand the wi-fi spots and fibre network to remote rural areas, as this was indeed where the service was needed the most and the offering of broadband to the post offices could create an opportunity for the expansion of the wi-fi spots.
The Minister said he believed that the Department had been structured correctly, but the structure would need to be amended, as new functions had been introduced, in order to find the appropriate structure that could deliver on the mandate of the Department. The Department did not have enough capacity to deliver on its mandate, as this was a very technical sector and this was a challenge that needed to be addressed urgently. The Department still needed highly skilled people with specialised skills in order to increase its capacity, and people with specialised skills were not as expensive as managers. It was important for the Department to look at mechanisms for bringing highly skilled young people into the organisation, as this was one of the priorities of government. E-skills development would also become relevant and important, especially when considering the internet revolution. The current problem at the post office needed to be looked from a global perspective, as other post offices around the world had had to come up with a turnaround strategy and a business model that would be sustainable.
The Minister said that the Postbank was still a profit making company and the Department would assist it to grow. This was where the corporatisation of Postbank came in -- there was no post office in the world that could possibly survive without a financial service. There was a Memorandum of Understanding (MOU) between the previous DoC Minister and the Minister of Finance on the regulation of finance for Postbank, as the regulations could not be the same as those for commercial banking institutions. The Department would continue to work with the Department of Finance, the Central Bank and the South African Reserve Bank (SARB) in trying to unlock some of the challenges that would allow for the smooth operation of Postbank.
The Department had noted the increase in the use of consultants. The Department should be making use of its internal capacity, and he suggested that it should make use of consultancy only in cases where it was absolutely necessary. The Department would need to monitor the legislation, as there were some projects that had been abandoned without any proper calculation of the costs.
Ms Sekese said that the Department was aware of the challenges in the implementation of e-Government and looking at ways to tackle them. There had been an engagement with international colleagues on ways to have bilateral engagements with countries that had done very well when it came to e-Government, and the Department would ensure that SITA was part of those discussions. The Department had decided to incorporate programmes that were contributing significantly to the functions of the Department and the unit of International Relations, together with the Southern African Development Community (SADC) experts who were responsible for entering into bilateral agreements with neighbouring countries in order to ensure harmonisation and integration of the radio frequency spectrum.
The Committee would be provided with a written response on the breakdown of the 1 296 government institutions to be provided connectivity in terms of location, and whether they were in urban or rural areas. The Department had noted the concern the cost for the advertisement of posts, but ensured the Committee that the cost of adverting posts would be significantly lower in the current financial year, as the majority of the posts had been filled. The Department had a good working relationship with the Western Cape and the DG in the office of the Premier. The Department had a challenge in the time it took for the approval of Environmental Impact Assessments (EIAs), as the rapid deployment policy aimed to reduce the time for the rollout of infrastructure and the municipal approval process. The Minister had already alluded to the fact that this was a very technical Department and therefore it required scarce skills in order to deal with multifaceted challenges.
The Minister added that the Department also had the challenge of capacity at the level of school connectivity, as this was prescribed in terms of the Universal Service Obligation (USO) and the regulator needed to have enough capacity to monitor the schools that had been connected to broadband. The Department would engage the Department of Basic Education (BDE) to avoid the duplication of services as there were cases of schools that had been connected three times, while other had not been connected at all. There was now a clear definition and meaning of connectivity in the broadband policy, and the private sector was very keen on assisting in the acceleration of school connectivity. Some of the schools that had been connected to broadband still needed to get advanced Long-Term Evolution (LTE) so as to modernise the way education was delivered in the country. The Department would also work with ICASA to find a workable model that would accelerate the delivery of high-speed broadband to all the schools in the country.
Ms Shinn asked whether the Department had a mandate to deal with broadcasting sector, as this had been articulated by Ms Sekese.
Mr Mackenzie said it was important for the Department to encourage and incentivise the private sector to invest in underserved areas, as the spectrum was often limited. The national coverage in the country was fairly excellent, but it was just a matter of using that as an incentive. He suggested that the DTPS needed to push the DoC to accelerate the rollout of broadband in the country.
Ms Tsotetsi asked whether the Department had had similar engagements with other departments on enhancing co-ordination and reducing the duplication of infrastructure, as the DG had already indicated that there had been engagements with SOCs with the intention of increasing co-ordination and reducing duplication. It was important for the Committee to know whether there were any anticipated problems which might interfere with the targeted times-frames. It was commendable that the Department seemed to prioritise on localisation in the manufacture of set-top boxes, but there had been little focus on women and people with disabilities. She requested that the Committee be provided with an audit on the tender to be awarded for the manufacturing of set-top boxes so as to see whether historically disadvantaged individuals (HDIs) had been accommodated.
A Member asked about the people who were responsible for the maintenance and upgrade of infrastructure after the schools had been connected, as some service providers would assist schools with connections and then disappear. What was the progress so far on the formulation of a regulation to deal with the duplication of infrastructure in well-off communities, to the exclusion of poor communities?
Ms Shinn asked whether the Department had any strategy in place to incorporate the private sector in some of the projects to be undertaken. She asked for the time-frame for the reviewing of the National Radio Frequency Spectrum Policy, and how this would be done. The country was already behind in the ICT rankings worldwide, and this was due to the poor rollout of the network. What was the Annual National Assessment (ANA) strategy, as this was not explained in the APP? She requested that the Committee be provided with information on five ICT position papers. It was indicated that the public had contributed to positioning spectrum management in Africa, and she wondered whether this was different from how South Africa allocated its spectrum.
Ms Shinn asked what the legislation was that would be expected to provide cyber security. It was confusing that the Department had mentioned the establishment of a cyber security institution, considering that there was already an existing institution to deal with this problem. What was the update on the ICT cyber-security framework? What was the update on efforts to co-ordinate an interdepartmental e-Government strategy? Who was driving the e-Government strategy in the country between SITA and the DPSA? She requested more information on the project implementation plan and project management office in relation to the rollout of e-Government. It was important for the Committee to know about the reason for the dramatic increase in outsourced services, as the Department had spent R52.5 million in 2014 and expected to increase this to R230 million in 2015.
Ms Kilian commented that a small percentage of the budget had been allocated to the branch of International Relations within the Department, but there still needed to be value for money. She wondered whether some of the international conferences had been of benefit to the country. It was concerning that the Department allocated only 7% to research, considering the rapidly changing environment in the ICT sector. The Department should consider developing internal capacity so as to reduce the reliance on consultancy. She supported the extension of broadband innovation as part of the rapid rollout of broadband to be covered nationally in 2019, and asked whether the 1 296 government institutions would include schools. There was a need for interdepartmental co-ordination and legislative intervention to deal with bureaucracy in the rollout of the network to small towns, as this often resulted in unnecessary delays.
The Chairperson said that the localisation of manufacturing was critically important, as this was part of creating job opportunities. It was absurd that the country did not have a manufacturing plant for Blackberry smartphones, despite the booming industry in the country, and this pointed to lack of localisation. The delays in the way the Department processed policies and policy announcements had an impact on economic development, especially the delays in the advisory panel for the implementation of Broad-Based Black Economic Empowerment (B-BBEE). The Department needed to deal with the increase in the cost of advertising posts.
Mr Vilakazi said that the knowledge and management strategy dealt with how the Department managed the storage and usage of information. The R95 million spent on consultancy referred to all the projects in the APP, and not all the reflected amounts would be used on consultancy. The Department was looking at international models that could be used to curb cyber crime, as the problem had been pervasive. Research institutions like the Council of Scientific and Industrial Research (CSIR) also played a key role in identifying new emerging threats. The Department needed to expand high capacity infrastructure to connect schools to broadband. The limited number of schools that had been connected to broadband was based on the limited funding, and the Department had to devise a plan to deal with this shortfall.
Ms Sekese said that the Department was part of the African Spectrum Working Group, and it aimed to firstly consolidate the national position on spectrum and then focus on the harmonisation of spectrum at the continental level. The key focus areas included security and flight tracking in the light of the recent disappearance of an Air Malaysia aircraft. The Department had partnered with the African Union (AU) in regard to capacity building and had also assisted in the planning and rollout of broadband strategy. Sentech played a key role in providing capacity at the regional level in terms of broadcasting and content. The Department did not have enough funds for research in order to drive the ICT agenda, and only R3 million had been allocated in the budget for the 2014/15 financial year. Research was important for the Department in order to enhance decisions on policy making, and the research that was conducted was often used in the implementation of policies.
Ms Sekese said that the Department needed to grow the internal capacity for ICT research and also to leverage the resources of other entities in order to share them. The Department would be concluding an MOU with the DST to tap into the existing capacity within that Department and further drive the ICT research agenda. The Public Service Act (PSA) and associated regulations had mandated the Department of Public Service and Administration (DPSA) to drive e-Government, but it was the Electronic Communications and Transactions Act that stipulated that the Minster of the DTPS must develop a national e-Strategy, which was the e-Government part. The Department was working very closely with the DPSA in order to ensure that e-Government was implemented smoothly.
The Minister said that the amended B-BBEE Act, which also amended the generic codes of good practice, expected all sectors of the economy to amend their adopted codes to align with the new elements. According to the Department of Trade and Industry (dti), the role of compliance became the responsibility of the Minister in the absence of the advisory council, but there was also a legislative loophole that needed to be amended, especially in the formulation of the advisory council.
The Chairperson asked whether the Department had the BEE ICT policy, as it was supposed to have been ratified in 2003.
The Minister responded that the policy was in the ICT sector of the Charter which had been adopted as a code which applied to the sectors, and this had sector participation.
The Chairperson said it was important for the sector to prioritise on transformation in order to bring meaningful change to the country, and wondered whether this was possible considering the lack of an advisory council to ensure compliance. What had been the impact of the lack of an advisory council on the compliance deadline?
The Minister responded that annual reviews of sector codes were expected, and an alignment of the elements of the sector codes was required by the dti for the implementation of B-BBEE. The advisory council was crucially important as a facilitator of transformation, as it would have sector representation from relevant industries. The Department needed to engage with big players so as to put measures in place that would facilitate transformation in the country, and most of the companies in the country were fully aware of this responsibility. The Department needed to finalise the process of proper implementation of B-BBEE in order to monitor compliance on transformation.
Briefing by Universal Service and Access Agency of South Africa (USAASA)
Mr Zami Nkosi, Chief Executive Officer, USAASA, said that the legislative mandate of USAASA fell under the PFMA (Schedule 3A) and the Electronic Communications Act. The NDP goals that had an influence on USAASA and the Universal Service and Access Fund (USAF) strategies and work included the implementation of an integrated e-strategy for the country and 100% broadband penetration by 2020. By 2030, USAASA planned for the deployment of a full range of government, educational, and informational services. The New Growth Path (NGP) targeted the creation of 100 000 new jobs by 2020 in the knowledge-intensive sectors of ICT, higher education, healthcare, mining-related technologies, pharmaceuticals and biotechnology. The Strategic Infrastructure Project (SIP-15) involved the expansion of access to communication technology. USAASA aimed to create 100% access to digital ICTs for all South Africans by 2020 as a driver of new economic opportunities and digital equity. Interim implementing agencies included Sentech, Broadband Infraco, Telkom, the South African National Roads Agency Limited (SANRAL), Eskom, Transnet, USAASA, and the private sector.
The MTSF priorities for next five years included the creation of more jobs, decent work and sustainable livelihoods for inclusive growth; rural development, land reform and food security; education; health; and fighting crime and corruption.
It was further indicated in the priorities that there was a need to rapidly expand access to, and use of, ICT infrastructure as follows:
- Invest in a comprehensive plan to expand broadband access throughout the country and substantially reduce the cost of communication;
- Connect all schools, public health and other government facilities through broadband by 2020, and at least 90% of communities should have substantial and superfast broadband capacity by 2020.
- Support and develop free wi-fi areas in cities, towns and rural areas.
Mr Nkosi said that the targets for SA Connect included 50% broadband access at 5Mbps by 2016 and 100% broadband access by 2030. USAASA also planned to increase school connectivity to 50% at 10 Mbps in 2016 and 100% by 2030. These targets would be reviewed periodically and supplemented by pricing and quality of service targets, as well as speed of installation and fault repair. USAASA supported the project delivery of the Universal Service Fund through the provision of world class project management, supply chain management and human resources and administrative support. The USAASA five-year strategic implementation plan for 2015/16 to 2019/20 included 98% availability of business systems and the improvement of business process automation. It was also important for USAASA to capacitate its legal team through internal processes, knowledge sharing and contract management, and to produce accurate financial statements to be compliant with Generally Recognised Accounting Practice (GRAP) and Treasury regulations.
Mr Nkosi mentioned that on the finance, USAASA planned to have 80% of USAASA and USAF procurement from B-BBEE entities and would build a partnership of R400 million raised in support of USAF.USAASA would also conduct 25 internal audits as per approved annual audit plan in order to assist the Agency to achieve a clean audit, and two bi-annual risk assessment workshops would be conducted in all divisions. USAASA would review and track all of South Africa’s national policies and regulations impacting universal service and access, and would make submissions and participate in the policy and regulatory process.
Mr Nkosi indicated that the common challenges of USAASA included:
- Insufficient resources for broadband infrastructure coverage;
- Many role players, but uncoordinated infrastructure interventions;
- No comprehensive policy for ICT in education;
- No national framework for e-leaning and collaboration;
- High cost of terminal devices;
- Infrastructure deployment and content development were not aligned (supply and demand);
- Power supply;
- Basic schools infrastructure not in place (non-ICT).
Mr Nkosi said that in light of resource considerations, the proposed new positions in the human capital plan included two telecommunications engineers, six project managers, a revenue accountant, a project finance specialist, and executive manager support. Other positions would be realigned and the existing budget would be used for the newly proposed specialist positions. Also, USAASA would need to deploy an enterprise resource planning (ERP) solution to enable the effective and efficient management of the organisation.
The budget allocation of USAASA in 2015/16 was expected to be R262 million, and R75 million in 2017/18. The term of office for the Board was coming into an end in September 2015 and this might lead to a leadership vacuum and organisational instability. This might also affect adversely the strategic trajectory of the Agency and the progress achieved with regard to the closure of access gaps in the country as required by the Electronic Communications Act (ECA).
The lack of an ERP system may lead to lost opportunities to operate and monitor the control environment more effectively and efficiently. The implementation of an ERP system was under way to mitigate this risk. Non adherence to Supply Chain Management (SCM) best practices and procurement processes may hinder the organisation’s ability to deliver projects on time and within budget. Board oversight, plus internal and external audits responsible for overseeing SCM and the enforcement of procurement plans, were designed to mitigate this risk. The lack of an appropriate organisational design may result in an inability to meet beneficiaries’ and key stakeholders’ requirements. The organisation’s design and human resource strategy had been revised to reflect the needs of the organisation and its mandate, and the implementation of the organisational design had already commenced.
Mr Nkosi said that R28.545 million was available for broadband, and the location of two municipalities -- Albert Luthuli local/Gert Sibande district and Mutale local/Vhembe district -- was informed by the DTPS’s eight priority areas. These two areas were the most under-serviced within the eight identified district municipalities and the plan was to upgrade and/or extend the networks and connect at least five schools and five clinics in each locality. R17.862 million was available for school connectivity, and the bulk of the funding allocation was going towards the maintenance of connectivity at the existing 180 schools. USAASA planned to install connectivity equipment, to wi-fi enable entire school access devices and interactive whiteboards. This would require maintenance of connectivity and fund maintenance for 24 months. The allocated budget for Broadcasting Digital Migration (BDM) was R181.16 million, and the target had been crafted solely against the funding allocation for the 2015/16 year. There was a cumulative R1.048 billion in the fund from prior years translating into approximately 1.3 million additional households. USAASA planned to subsidise 226 248 qualifying households, subsidised at an estimated R800 per household.
Mr Nkosi concluded by indicating that USAASA’s mandate had been broadened through recent policy developments, notably the NDP and SA Connect. The prioritization of BDM and broadband access nationally had a direct impact on the Agency and its projects. Organisational development and re-alignment processes were in place for a more effective USAASA and it was important to improve governance and accountability at both USAASA and USAF. There should be clear procedures and funds had been requested to obtain ERP for process flow. The budget had limited the organisation’s ability to provide adequate support for the delivery of universal access and service projects. There was a need to accelerate the rollout of broadband and ICT connectivity, which would require USAASA to scale up its activities significantly. Ramping up would require a larger budget than what had currently been approved for the MTEF period from 2014/15 to 2016/17.
Mr Mackenzie commented that the presentation by USAASA sounded like it was a fairly new organisation, although it had been running for years, and the priority seemed to be on building the organisation. He wanted to know whether the ERP solution had been implemented and the cost involved in the planning of the process. How was USAASA intending to incentivise the private sector to invest in under-served areas, as this had not been mentioned in the presentation? How many of the research papers that had been produced, had not been published? Why had they not been published? It was concerning that most of the performance indicators were very vague and difficult to measure.
Mr Mackenzie indicated that it was important for the Committee to know whether USAASA had its very own Geographical Information System (GIS) in place, and the kind of upgrade to be expected. The presentation by USAASA had also been riddled with clear discrepancies, and it was not clear whether the Agency targeted to obtain an unqualified audit or a clean audit. There seemed to be few projects happening at USAASA at the moment, as a lot of functions going forward seemed to be focused on the procurement and distribution of set-top boxes. It was concerning that the Agency also seemed to have a lot of unbudgeted Board meetings, and he wondered whether there was any specific reason for this.
Ms Kilian wanted more information on the EPR system, as this was important for monitoring the rollout of the digital migration process. It was concerning that there seemed to be few resources that had been dedicated to research, considering that whatever had been communicated at the International Telecommunications Union had to have been based on very sound research. She wondered whether there was co-ordination within the entities and the Department on strategies in place to deal with the duplication of services and excessive capital expenditure. There should be an adjustment in the legislation to avoid the simultaneous resignation of Board members. What were the specific risks to be tackled by USAASA?
Ms Shinn wanted more information on the partnerships to the value of R1.05 billion in support of USAF, and how those partners had been channelled and whether the right tender processes had been followed. On what basis had Telkom been included in the discussion around the possible funding to mitigate the challenge of insufficient resources for broadband infrastructure coverage? She also requested more clarity on the tender process involved in the award to two broadband sites to upgrade or extend the networks and connect at least five schools and clinics in each locality. How many set-top boxes would be distributed in the next three years? It was important for the Committee to know whether the tenders for the manufacturing of set-top boxes had been awarded to any companies, as there had been no public announcement on the tender. What was the status quo on the suspended senior staff member at USAASA?
Ms Tsotetsi wanted to know about the number of board meetings that USAASA had had so far, and whether there were any particular reasons for the high number of these meetings. How far was the preparation process for the implementation of digital migration and set-top boxes, given the mandate that had been set for that purpose? What were the criteria that had been followed in identifying the beneficiaries? She asked whether there was any particular reason for identifying the term of office for the board that was coming to an end in September 2015 as a potential risk, and the planning in place to counteract this risk. Was there benchmarking on the use of ICT? She asked about the status quo on the R2 million that had been put up in the past for research. It was important for the Committee to know about the suspended senior staff member at USAASA, and the way to expedite these investigations. What was the current development in dealing with non-adherence to SCM best practice and procurement processes, as identified by the Auditor-General?
Ms Maseko asked whether there was a way to adjust the number of schools and clinics to be connected in two broadband sites, as there may not necessarily be five schools or clinics in those areas. What was the strategy in place to deal with schools that had been given devices but were still without connectivity, especially those located in remote rural areas? She also asked about people that were involved in conducting research for USAASA, and whether there had been consideration of using those people within the agencies of other departments, like the Human Sciences Research Council (HSRC), including for consultancy.
The Chairperson wanted to clarify that it was the Department, and not USAASA, that was supposed to respond on the number of board meetings at USAASA, as they had been invited to participate in the meeting. It was important for the Committee to know about the allegations that USAASA had advertised the tender process for DTT, prior to a policy decision. She also expressed concern about how the Department dealt with school connectivity, as there seemed to be lack of co-ordination and it was often difficult to see the impact of broadband connectivity in most of the schools. She was worried about the high number of board meetings, and wondered if there was a way to regularise their number, as this was adding to the financial instability of many entities. It was pleasing that the performance indicators of USAASA were unambiguous, measurable and easy to do a performance assessment. How did USAASA position itself in terms of the changing environment in the ICT sector?
The Minister responded that DTT was not the main project for USAASA, as there were other equally important projects to focus on, especially in marginalised areas. The Department was also looking at ways to be inclusive for disabled people and women, as they also needed to be part of the plan in creating access to broadband. The Department was not completely happy with the performance of USAASA, as it still needed to focus on putting systems in place to ensure that there was accountability, monitoring and risk management. The Agency was at a stage where the focus was on performance. The targets of USAASA were disappointingly low, and this could be explained by the lack of funding.
It was important to have a highly skilled board that would be able to monitor and prevent potential risks, especially when dealing with procurement. The Department must start promptly with the process of looking for qualified candidates, as the term of office of the Board was coming into an end in September 2015, and some of the appointments had to go through the Cabinet process. It was difficult to understand the fuss around the appointment of Telkom as the leading agency in the rollout of broadband, considering that this was an SOC, and it had the largest terrestrial fibre network in the country. The Department was the major shareholder of Telkom and was interested in ensuring that the entity functioned efficiently. He agreed that Telkom was required to compete with other entities in the market. It was important for USAASA to work with other entities so as to be able to share resources and improve on harmonisation. The Department was working on the USAASA Act and the Committee would be updated on the progress in this regard.
The Minster said that the Department was engaging with the premiers of each province to also use their own resources to accelerate broadband connectivity, especially on e-Government. This was part of co-ordination and working together. The Department needed to set the standard on the number of schools to be connected, as it was pointless to connect to 50 schools, for example, and leave 40 schools unconnected, when it was more sustainable to connect to the whole district.
Ms Sekese said that the cumulative number of all board meetings by the Department was 24, and the Department held four stipulated board meetings a year. The Department ensured that the board meetings were compacted in order to deal with a number of issues and reduce the cost implications. She added that there had been on-going projects at USAASA since the 2011/2012 financial year, and this was the year of stabilising the entity.
Mr Nkosi said that there were several enterprise resource programmes in the market which indicated that the EPR solution was one of the systems implemented by most of the entities. The EPR forced the entity to be rigorous in terms of planning and attached a particular time-line for the execution of projects or stipulated targets, therefore creating efficiency and allowing the implementation of an integrated approach. The decision was yet to be taken on the implementation of this beneficial EPR solution, as it also had logistic modules that were able to link the supply chain to the allocated budget, therefore improving accountability and transparency. USAASA was using the substitution model as a strategy to incentivise the private sector, and was using an open bidding process. This was essentially about directly approaching the networking providers and explaining and incentivising them to invest in a particular project.
Mr Nkosi said that since 2010, USAASA had spent around R26 million on schools connectivity, focusing on Limpopo, the Northern Cape, Western Cape, Free State and Eastern Cape, and 400 smart devices had been given to different schools. The teachers had needed to be trained on how to use the smart devices in order to improve the learning experience of the students effectively. In the current financial year,15 schools were to be deployed in the Northern Cape and North West. USAASA was now currently focused on ensuring that students and teachers could be connected to the internet anywhere where they were located within the precincts of schools.
Mr Nkosi said that the Department allowed the entities to plan better in terms of executing key mandates and the on-going meetings allowed USAASA to plan ways to use resources and the amount of work to be completed in a co-ordinated manner. There was a work-based GIS at USAASA which was used for planning purposes, and was also important for finding the location of the schools and clinics to be connected to broadband. The GIS also allowed USAASA to know about the existing infrastructure in a particular location and the estimated budget to be allocated. There was no problem with USAASA interacting with Telkom or MTN, as this allowed the entity to share resources, particularly on infrastructure.
The research division was important for USAASA but there was a problem of capacity in the research unit and there was a plan in place to partner with universities in order to get the right skills. USAASA interfaced with various departments, including the DBE, on ways to accelerate school connectivity, and this also assisted in the sharing of budget. USAASA was allowed to tell the beneficiaries about how the government planned to roll out the set-top boxes. The DoC was currently the one that was fully responsible for the delivery of set-top boxes, as already alluded to by the Minister.
Mr Nkosi said that the criteria that were used for identifying the beneficiaries included income (less than R3 200) and nationality (only for South African citizens), and the initial number in 2008 was 5.2 million people. The National Household Survey (NHS) in 2013 showed the figure had increased from 5.2 million to 6.1 million and USAASA was finalising the database of indigence in all the provinces. The Committee would be provided with information regarding the suspended senior staff member at a later stage. There were indications that the disciplinary action had been concluded and the matter was now awaiting the final decision or outcome. USAASA was looking at a sustainable funding model that could be used to accelerate broadband connection to schools, as the DBE had already indicated that it was struggling with funding.
USAASA had chosen the five schools and clinics on the basis of affordability and there were plans in place to get more funding from the service providers to extend to other schools and clinics. The tender process for the delivery of set-top boxes had actually been designed to assess capacity and experience to deliver, and there was a standard of approval. The adjudication and evaluation in the tender process was meant to ensure that there was transparency in the awarding of the tender and USAASA was working very closely with the dti on the maintenance and sustainability of the localisation process and the critical role of SMMEs. Telecentre programmes became obsolete in the environment where the main focus was on upgrading networks and geographic coverage, as opposed to the public getting coverage. However there was still a focus on maintaining and upgrading the existing telecentres to keep them up and running.
Ms Shinn asked whether it was true that about 20 bidders had been given a share in the R4.3 billion prize for the manufacturing of five million set-top boxes as had been reported in the Business Day. If this was true, why was this information not formally announced?
The Minister responded that he did not rely on the newspapers to be informed about the key projects of relevant entities, and he wanted to put it on record that the only information he had received was that there had been a strict tender process for the delivery of set-top boxes. The concern of the Department was focused on ways to ensure that there was compliance with transformation requirements.
Ms Shinn asked if it was possible to get the name of all the bidders for the delivery of set-top boxes.
The Minister responded that he did not deal with name of tenderers and this question must be directed to relevant parties.
Mr Nkosi said that the tender for set-top boxes had closed in January 2015, even before the government had finalised policy, and had been divided into three categories -- antennas, terrestrial boxes, and boxes to access satellite broadcasts There were indeed 20 service providers that had been approved for the delivery of set-top boxes, four service providers for DTT antennas, three for Direct-To Home (DTH) antennas and eight for DTT set-top boxes. Five service providers would supply and manufacture boxes for areas without terrestrial broadcasting signals to access free TV, using satellite broadcasting. The intention of the set-top boxes was to promote inclusivity and increase the manufacturing and supply base. USAASA was in the final process of negotiating with service providers about a reasonable price for the provision of set-top boxes.
Mr Nkosi said that there was a greater emphasis by the dti on the issue of localisation in the manufacturing of set-top boxes, and USAASA was also focused on increasing the manufacturing capacity in the country. There had been no particular emphasis on people with disabilities, but this was assumed to be incorporated in B-BBEE and other measures of transformation.
Briefing by National Electronic Media Institute of South Africa (NEMISA)
Ms Moira Malakalaka, CEO, NEMISA, said that the mandate of NEMISA was to promote e-skills human capacity in South Africa. Its mission was to provide a national integrated e-competence development management system towards sustainable social economic development in the country. NEMISA was looking at ways on how to leverage ICT capabilities and tools to address socio-economic needs and improve the human resource base of the country for equitable prosperity and global competitiveness. The key activities of focus for NEMISA were on skills, individual usage, government usage and social impacts and affordability. The strategic position of the Ikamva National e-Skills Institute of South Africa (INeSI) in the future of iNeSI and its current work had already been designed and mapped, covering skills, individual and government usage, social impacts and affordability.
Ms Malakalaka said that multi-stakeholder collaboration had taken place, focussing on service delivery, proxies, building e-astuteness, knowledge for innovation, aggregation, community based leadership, and monitoring and evaluation. There was currently a process to advance iNeSI into a fully-fledged public entity with its own enabling legislation, without delaying its present functioning. Both National Treasury (NT) and the DPSA had stipulated the process to be followed in this regard. The NEMISA would be allocated a total of R12.5 million for the 2015/16 financial year and this was expected to increase to R14 million in 2017/18.
According to the MTEF allocation for the e-skills branch and the Institute for Satellite and Software Applications (ISSA), the transfer of the e-skills would be dependent on the signing of an MOU by the DG and CEO of NEMISA. The projects and programmes to be undertaken in respect of these funds would be discussed and agreed with the DG and the Minister. It was important to note that section 53 (3) of the PFMA states that entities may not budget for a deficit, and the entity was therefore requesting the Committee, in its 2015 MTEF plans, that the Institute did not commit to unfunded mandates, as these could lead to the non-achievement of targets.
The Chairperson said it was clear that the meeting needed more time, as there were many issues that had still to be discussed and responded to by the Department. The Committee would allow the Department enough time to appropriately deal with all the pending investigations and then report to the Committee when they were concluded. There were number of challenges that needed to be addressed, as highlighted earlier, especially on compliance to transformation, accountability and transparency. She thanked everyone who had been present at the meeting, particularly the Minister, for providing responses on a number of issues that had required clarity.
Apologies and Adoption of Programme
The Chairperson reported there had been apologies from Mr P Mabe (ANC) and Ms N Ndongeni (ANC) and Prof Hlengiwe Buhle, Deputy Minister of the DTPS.
The Chairperson requested Members to adopt the Programme Oversight Visit 2015.
Ms M Shinn (DA) moved the adoption of the Programme Oversight 2015 and Ms L Maseko (ANC) seconded.
The Programme was adopted as is.
The meeting was adjourned.
- Department of Telecommunications and Postal Services, USAASA & NEMISA on their Strategic and Annual Performance Plans, with Minister present 1
- Department of Telecommunications and Postal Services, USAASA & NEMISA on their Strategic and Annual Performance Plans, with Minister present 3
- Department of Telecommunications and Postal Services, USAASA & NEMISA on their Strategic and Annual Performance Plans, with Minister present 2
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