The Committee convened to adopt the report on the Telecommunications and Postal Services budget vote. With no major changes to be made, the main issue concerned the role of Broadband Infraco in the roll-out of broadband, as it would be part of the State-Owned Company (SOC) rationalisation process involving the anticipated sale of non-core assets.
The Chairperson assured Members that the Committee had to give an opinion on any merger involving SOCs. The Minister and Executive could not act without consulting the Committee, and had to share the Committee’s comments as part of their Cabinet memo. There needed to be a meeting on SOC rationalisation, because the issues could be confusing and the Committee did not want to be constrained in their oversight.
The report on the budget vote was adopted, as well the minutes of a previous Portfolio Committee meeting.
The Chairperson commented on the passing of the anti-apartheid activist, Mama Ruth Mompathi, a woman she looked up to and really admired.
The Members expressed their condolences.
Adoption of Budget Vote Report
The Chairperson drew attention to the draft Budget Vote report, and said that many of the issues previously raised had been incorporated. These included all those of Mr C Mackenzie (DA), but not all of those of Ms M Shinn (DA). With respect to Ms Shinn’s issues, she explained it was felt the issues regarding the capacity of the Department had not been phrased properly, as it made the situation seem hopeless. On the issue of the Democratic Alliance reserving its position on the report, she had not included this because she wanted to address it in the meeting.
Since receiving the most up to date edited version, she had made some additional grammatical and formatting edits, spelling and punctuation corrections, and the deletion of a phrase, but had had no substantive edits to make.
Ms Shinn asked if there had been any feedback on what was happening to Broadband Infraco (BBI).
The Chairperson responded that she had received feedback from the Minister, and asked the Committee Secretary to circulate that letter to the Members. The Minister had responded that they were to receive a report, signed by the Director General (DG), explaining that Broadband Infraco would be part of the State-Owned Company (SOC) rationalisation process, and they would have a role to play in the broadband roll-out, but did not specify the amount involved. She had not yet responded to the Minister. She had consulted with the house chairperson, who had said that because there was an opportunity for an amendment, they had to quantify the amount based on what had been said by Treasury regarding the feasibility, given their constrained budget. The Committee needed an opinion from Treasury on whether BBI, as a schedule 2 entity, was feasible in the light of Treasury refusing to write guarantees for entities that were not properly constructed, She had been advised to call Treasury to come before the Committee to discuss the issue specificaly.
Mr Mackenzie asked if the Chairperson was aware of anything that the Committee was not, but should be, aware of, specifically relating to the Minister of Finance’s stated intention to sell off non-core assets in order to finance other spending priorities of Government. Was Broadband Infraco part of this programme?
The Chairperson responded that the consideration currently was to look at what was best and whether there were any duplications, and it was felt that BBI was a duplication of the Universal Service Access Agency of South Africa (USAASA) and others. They did not currently have a licence, and this was a limitation. The issue was how to address these short-comings. The question was whether the entity was sustainable; otherwise it became a burden on the state if it could not repay its loan from government, especially given the current deficit. A case had been made by BBI before the Department and the Minister of Finance to explain their situation, and based on this there would be a discussion and a decision made on the issue. There have been rumours of it being sold to Telkom, which she had been hesitant to share with the Committee, as Telkom had not separated its wholesale and retail operations. BBI was a government investment that may end up increasing value for private bodies, and this was not meant to happen, so these were issues that had been flagged. The government had called for a proper discussion with all relevant bodies to discuss the matter.
The same would be done for the Ikamva National E-skills Institute, because the Committee had to give an opinion on any merger in government. For example, it had an upcoming meeting to give an opinion on the merger of some state-owned companies. The Minister and Executive could not act without consulting the Committee, and had to share the Committee’s comments as part of their Cabinet memo. She assured the Members that they would be able to express their views, which was why her concern was mainly to assert that they could not sit back and do nothing. The Committee needed to look at the revised program and find a way to deal with the issue in a very detailed manner so they got clarity at the meeting. Letters did not help, as they only led to questions, so it helped to have a meeting where details and issues could be clarified. There needed to be a meeting on SOC rationalisation, because the issues could be confusing and they did not want to be constrained in their oversight, so this had to be a priority for the Committee.
She asked if she could call on the members of the Democratic Alliance to clarify their reservations in terms of supporting the budget.
Ms Shinn responded that such decisions were taken by the party’s caucus, and they therefore reserved their position.
The Chairperson jokingly responded that the new DA leader should consider decentralising power.
Mr Mackenzie jokingly agreed with the Chairperson. He commented on the excellence of the report, saying that it had greatly improved from last year, and that he shared Ms Shinn’s position.
Ms N Ndongeni (ANC) proposed a motion in support of the report, and was seconded by Ms D Tsotetsi (ANC).
The report was adopted with the prescribed edits.
Adoption of Minutes
The Committee perused the minutes report, and mainly spelling corrections were made, while a company name was corrected from “Fibre Core” to “Fibre Co.”
Mr Mackenzie proposed adoption of the minutes, and Ms Ndongeni seconded.
The minutes were adopted.
The Chairperson thanked the Members for the work done, which she attributed to the Committee working as a conscientious and steady team. The mistakes of last year had not been repeated. They had found their feet. She said they could anticipate a good budget debate due to their quality work, as compared to other committee reports.
The meeting was adjourned.
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