SA Connect progress report

Telecommunications and Postal Services

12 March 2019
Chairperson: Mr J Mahlangu (ANC)
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Meeting Summary

The Committee heard a briefing by the Department Telecommunications and Postal Services on progress made on SA Connect. The Department said the annual budget allocation for SA Connect was R9,7 million for 2018/19, which was only adequate to rollout connectivity to 63 facilities. A rollover amount of R110 million was approved at the end of August 2018 and consequently the bulk of the connectivity rollout to 507 facilities could only begin in September 2018. In January 2019 a fast-track plan was devised to expedite service activations to be in line with the annual target. There had been no broadband infrastructure rollout target for Q1 and Q2 and the Q3 target of broadband infrastructure rollout to 313 facilities has been met. Preparatory work for 2019/20 had begun with the proactive installations of broadband infrastructure to an additional 400 facilities. Stakeholders were regularly engaged, through provincial steering committees, to provide project status updates and to ensure alignment between SA Connect and provincial broadband plans. The Department conducted ad hoc physical facility audits to verify broadband infrastructure installations and internet services assessment tests to ensure adherence to the requirements specification. SA Connect had trained 100 SMMEs on installation and 26 were participating on SA Connect’s program. The Department then spoke to the equity of various categories in SMMEs. On SA Connect’s Phase 2 Progress Update, the Department said that R1 billion has been provisionally allocated for SA Connect’s implementation for the 2021/22 financial year.

 

Members asked how many sites had been installed over the Parliamentary term. How many were connected and what was the total cost to do this? Was the Western Cape Province the leader? Why? What lessons could be learnt? How was the Department managing the power and security issues? How many issues were there and what steps should be taken to mitigate it? Members asked about the danger that USAASA and SA Connect might be overlapping in their work. Was USAASA’s work totally different or how were the two integrated? Were the same installers being used by USAASA and SA Connect? What was the unforeseen upgrades to sites as site audits had been done prior to the project‘s rollout? Members said there was a list of 12 Access Network providers, and some were unsuitable and asked if the  names were part of the original BBI panel. Members claimed that some of the providers had been paid before work had been implemented. Members asked how the SMME companies were chosen. Was there on the job training and who funded this? Who did the audit of installations before it was signed off?

 

Members asked if the equipment for the fast track plan could not be produced locally; if connectivity could not be implemented temporarily in mud schools until a proper structure was built; and what role the Department played in following up on vandalism of equipment. Members wanted a breakdown of all the races for the statistics provided on black owned SMME participation.

Members sensed that the primary focus was on the training and  asked why there was only an intervention in February deep into the financial year to ensure that the connection targets were met. What interventions were there for communities that did not have power and connectivity? What was the nature of the minor technical issues? Members said the document needed to be cleaned up as the graphics were not clear enough. The municipalities needed to have the provinces appended and various terms needed clarification.

Meeting report

Briefing by the Department of Telecommunications and Postal Services on SA Connect

Mr Tinyiko Ngobeni, DDG: ICT Infrastructure Support, Department of Telecommunications and Postal Services said the annual budget allocation for SA Connect was R9,7 million for 2018/19, which was only adequate to rollout connectivity to 63 facilities. A rollover amount of R110 million was approved at the end of August 2018 and consequently the bulk of the connectivity rollout to 507 facilities could only begin in September 2018. He said the number of facilities connected in Q1 and Q2 were 63 while broadband connectivity was provided to 194 facilities in Q3. In January 2019 a fast-track plan was devised to expedite service activations to be in line with the annual target. Only 36 of the 194 Q3 targets were connected because of budget constraints, and because unforeseen infrastructure replacement placed limitations on the speed of implementation. In addition, the 2017/18 budget rollover was granted later than anticipated, resulting in delays in issuing purchase orders for connectivity. Therefore  129 of the annual target of 570 were connected to date with 441 still to be connected. 291 of the 441 infrastructure installations completed, were awaiting service activations and 150 of 441 infrastructure upgrades were underway. He said there had been no broadband infrastructure rollout target for Q1 and Q2 and the Q3 target of broadband infrastructure rollout to 313 facilities has been met. All  313 broadband infrastructure installations were tested. Minor technical issues experienced at some facilities were being resolved and 22 of the 313 had services activated. The fast-track plan for service activations comprised of negotiating an agreement with the equipment supplier to fast track delivery, streamlining the development of bid specifications, establishing an Emergency Bid Specification Committee, training SMMEs to expedite delivery, and deploying interim wireless solutions. Invoices amounting to R13.3m were processed and paid for in Q3 and in Q4 to date, invoices amounting to R6.7m have been processed and paid.

 

Preparatory Work for 2019/20

He said proactive installations of broadband infrastructure to an additional 400 facilities, where connectivity was planned for 2019/20, had commenced and to date, broadband infrastructure installations to 137 of these 400 facilities have been completed. Stakeholders were regularly engaged, through provincial steering committees, to provide project status updates and to ensure alignment between SA Connect and provincial broadband plans. The Department conducted an ad hoc physical facility audit to verify broadband infrastructure installations and internet services assessment tests to ensure adherence to the requirement’s specification.

 

On SA Connect’s Socio-Economic Impact, he said that for service activations, it had 140 SMME suppliers on a database of which 100 had been trained for installations and 26 of these were participating on SA Connect’s program. He said 25% of the SMMEs were at least 51% owned by Black women; 25% were at least 51% owned by black youth; 1,7% were at least 51% owned by people with disabilities; while 71,7% of SMMEs were less than 51% Black owned. For infrastructure installations; there were eight SMMEs  participating on SA Connect of which three were women-owned and one was youth-owned

 

On SA Connect’s Phase 2 Progress Update, he said that R1 billion has been provisionally allocated for SA Connect’s implementation for the 2021/22 financial year subject to the Department’s business case and the implementation plan being finished before allocations were completed in the 2020 budget process.

 

Mr Gopal Reddy, Senior Manager: SITA, introduced a short video on how sites were connected to the core network.

 

Discussion

Mr C Mackenzie (DA) asked how many sites had been installed over the Parliamentary term. How many were connected and what was the total cost to do this? Was the Western Cape Province the leader? Why? What lessons could be learnt? How was the Department managing the power and security issues? How many issues were there and what steps should be taken to mitigate it?

 

Ms M Shinn (DA) asked about the danger that USAASA (Universal Service and Access Agency of South Africa) and SA Connect overlapping in their work. Was USAASA’s work totally different or how were the two integrated? Were the same installers being used by USAASA and SA Connect? What was the unforeseen upgrades to sites as site audits had been done prior to the project‘s rollout? She said she had a list of 12 Access Network providers and some, such as Brightwave and Altech, were unsuitable. She asked if  the names part of the original BBI panel. She claimed that some of the providers had been paid before work had been implemented. She asked how the SMME companies were chosen. Was there on the job training and who funded this? Who did the audit of installations before it was signed off?

 

Ms D Tsotetsi (ANC) asked if the equipment for the fast track plan could not be produced locally. She asked if connectivity could not be implemented temporarily in mud schools until a proper structure was built. She asked what role the Department played in following up on vandalism of equipment. She said she wanted a breakdown of all the races for the statistics provided on black owned SMME participation.

 

Ms J Kilian (ANC) said she sensed that the primary focus was on the training. She asked why there was only an intervention in February deep into the financial year to ensure that the connection targets were met. What interventions were there for communities that did not have power and connectivity? What was the nature of the minor technical issues?

 

The Chairperson said the document needed to be cleaned up as the graphics were not clear enough. The municipalities needed to have the provinces appended and various terms needed clarification.

 

Mr Ngobeni said that in the Department’s last presentation it noted that the first two and a half years of work, the Department had attempted various approaches and worked with a number of bodies to try to integrate the work. Since 2017 it had agreed with the National Treasury to work with the SITA and BBI. 2018/19 was the first time the program was implemented.

 

He said the Western Cape and Gauteng had higher numbers because they served a mainly urban population. SA Connect was working with people in rural areas who were furthest from urban areas and this increased installation costs.

 

Mr Ngobeni said the Department was trying to address the power constraints.

 

On the issue of training, he said that each entity had to have an enterprise development component and  it was in the interest of the entity to upskill potential service providers.

 

On the audit to approve installations, Mr Ngobeni said auditing was done at different levels, the technical level and the Department did physical inspections.

 

On the equipment from overseas, most were not manufactured locally as there was a need to build capacity for localisation of manufacture.

 

On mud schools, he said the Department would not want to exclude mud schools based on location.

 

Mr Ngobeni said that the unforeseen upgrades referred to upgrades undertaken by the Department of Education.

 

On the breakdown of the SMME stats he said the question was appreciated and would need to further break it down.

 

On how many communities benefited, he said schools benefited which was the primary goal which would imply communities were connected, beyond that it was to connect government facilities and communities.

 

On why the fast tracking was not done earlier, he said it could only be done after the approval of the rollover in Oct-Dec. The Department  was still hoping to  deliver on the target.

 

He welcomed the comments to improve the slides to make it easier to understand.

 

The training of SMME’s was done so that they could understand the Department’s requirements regarding standards and quality. 109 SMMEs were trained but only 66 responded to bids.

 

Mr Lumko Mtimde CEO: USAASA, said the DDG had answered the questions on overlapping of work and working together to avoid that. He said that out of the 609 sites at OR Tambo less than 50 sites had installations of the other ITTs and that was the work USAASA tried to avoid.

 

Regarding sign offs, he said there were different levels of sign-off before a site was signed off as fully installed. It was impossible for someone to be paid before work was signed off. There were payment milestones in the service level agreements for roll out and for connectivity and they were only paid on completion of the work.

 

There  were sites where there was no  connectivity installed as yet, and this might confuse people. From 2013 USAASA had installed 1047 sites. Some of the contracts for connectivity at these  sites had lapsed. If BBI took over all it would do was connectivity.

 

On the company Brightwave and other companies, he said a decision had been made by the then board at a time when he was not at USAASA to use the BBI panel instead of following the SCM (Supply Chain Management)  process. Treasury confirmed to him that the panel had a three-year period which would lapse in this year. These companies have rights and SCM was using that panel for USAASA. BBI had its own process.

 

Regarding comments made about the company  Brightwave, he said there was no basis for USAASA to confirm that comment. He could confirm connection to 295 out of the 609 sites at OR Tambo Municipality.  314 sites were awaiting board approval to activate be activated.

 

Regarding power and security, Mr Gift Zowa, Chief Technical Officer: BBI, said that there was full power and security at the core sites. At the final sites where services were provided there had not been security breaches but there had been power problems and they were looking at new designs like solar panels as a possible solution.

 

BBI were also using the companies Brightwave and Altech, but had not paid them until requirements had been met. Payment might have been made for equipment items such as cabinets.

 

Mr Zowa said he was not aware of Sakhelo as a service provider. He was then told it was auditors. He said the auditors were taken to sites where there were also Departmental presentations.

 

He said no equipment had been stolen.

 

Regarding the minor technical issues, he said it was the throughputs of the equipment which was monitored so as to improve performance.

 

On why equipment was not bought locally, Mr Reddy said that Treasury had developed a framework of agreements to get savings on government purchases. Through these agreements 25% had been saved. One clause however was that if you provided the equipment, you did not get to install it, so that local people could install it and hence the training of SMMMEs in equipment installation.

 

Mr Mtimde confirmed that the schools were in deep rural areas and there were none in urban areas.

 

The meeting adjourned.

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