Broadband accessibility & SA Connect: USAASA update

NCOP Public Enterprises and Communication

05 February 2020
Chairperson: Mr T Matibe (ANC; Limpopo)
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Meeting Summary

The Department of Communications and Digital Technologies (DCDT) and Universal Service and Access Agency of South Africa (USAASA) gave a briefing on the SA Connect project which aimed to deliver widespread broadband access to the country's population. Phase 1 for achieving connectivity is limited to 970 sites due to lack of funding. In January 2020, the number of sites connected is 630, and the remainder will be connected by the end of the 2019/20 financial year. Challenges were the burglary of equipment, and unforeseen risks such as crowding, which took place around schools where the public wanted free wifi.

Members criticised the Department and USAASA for not having proper governance in place at USAASA. They were distressed about all the vacancies and lack of permanent appointments. They emphasised the need for a functional entity that delivered on its targets and ensured security of delivered digital infrastructure in communities. Members had hoped to liaise with the Board. However the Department noted that the Board had been dissolved and an executive caretaker appointed this month for 12 months in lieu of a board to ensure current operations are looked after. This will fast track the restructuring at USAASA and its Fund into the Digital Development Fund. Members also asked about the Special Investigating Unit (SIU) investigation report and about the recovery of money. [Note: Parliamentary Question on SIU report on USAASA]


Meeting report

The Chairperson asked everyone to introduce themselves. The Department of Communications and Digital Technologies (DCDT) delegation included Mr Omega Shelembe – Deputy Director General: SOC Oversight; Mr Tinyiko Ngobeni – DDG: Infrastructure; Ms Nosisi Madlanga – Chief Director: SOC Oversight; Ms Zaytoen Anthony; Ms Zandile Ngubeni; Mr Bathandwa Mlambo – Ministry Parliamentary Liaison Officers. The USAASA delegation included: Mr Basil Ford – Executive Caretaker; Ms Selloane Motloung – Company Secretary; Ms Mary-Ann Ratlhogo – Executive Assistant to Executive Caretaker; Mr Lavhelesani Netshidzivhani – Risk Manager; Mr Thelela Mvambo – Acting Executive Manager: Operations; Mr Mokgobo Sephiri – Acting Chief Financial Officer.

SA Connect: Department of Communications and Digital Technologies (DCDT) briefing
Mr Omega Shelembe, Deputy Director General: SOC Oversight, presented, discussing the SA Connect approach which is all about connecting government, business, and individual users.

The implementation of the broadband programme is intensive as it covers every part of society, government, business and citizens. From government’s point of view, the focus is on government connectivity, using aggregation of demand, as each government facility requires connectivity for service delivery. Entities like ICASA and contribute to enhancing connectivity to government.

The focus on providing connectivity to business is to stimulate economic growth. There is policy allowing government to put infrastructure in place to get to remote areas. They deal with challenges such as duplication as infrastructure non-duplication is important. If connectivity is fixed, then they need way-leaves, which local authorities grant.

Citizen connectivity is provided by the private sector as part of licences. From a mobile wireless point of view, the purpose is to provide broadband connectivity. Most of the country does not have fixed infrastructure to connect households, so they rely on mobile connectivity.

Mr Shelembe said that they were there to provide feedback to the Committee on the government connectivity programme. DCDT did an infrastructure gap analysis to assess the state of infrastructure in the country. They identified which areas need infrastructure – and rural areas and townships do not have access. Government facilities such as health and police were assessed in the gap analysis to see how far they are from infrastructure, and it was determined that 42 000 government facilities need connectivity. They need a programme to connect all these government facilities.

Phase 1 progress
The programme is split into two phases: the pilot phase and phase 2. They did an assessment and established that Western Cape and Gauteng have broadband programmes. Therefore they excluded Western Cape and Gauteng as they can run from their provincial government. The approach the Department is taking is that most government facilities are schools. The principle is that to cover each school, will by default cover every community, as each community has at least one school. The South Africa Connect policy targets schools, to be achieved at different stages. That is phase1 for SA connect.

Mr Shelembe discussed progress on this by referring to funding. Phase 1 of connectivity is limited to 970 sites because of lack of funding. The implementation is carried out by Broadband Infraco and State Information Technology Agency (SITA). At 22 January 2020, the number of sites connected is 630, and the remainder will be connected by the end of the 2019/20 financial year.

SA Connect Phase 2 progress
DCDT requested funding and was told to look at other options, outside of relying on the fiscus. The consumption of this product is going to increase. They are doing a feasibility study to approach other funding institutions to assist such as the Development Bank of Southern Africa (DBSA). This feasibility study is going to be a national study and they will have the results of the study in 2020/21. The request for proposals (RFP) to the open market for a service provider to conduct the study, will be issued by this coming weekend.

Universal Service and Access Agency of South Africa (USAASA) update
Mr Basil Ford, USAASA Executive Caretaker, said as he had been in his position for only one week, he had asked the USAASA Risk Manager to take the Committee through the last part of the presentation.

Mr Lavhelesani Netshidzivhani, USAASA Risk Manager, spoke about the Roadmap Models which were models USAASA implemented, not without challenges:

• Model 1 Telecentre model had challenges and sustainability problems such as vandalism and burglary. They were theft high-maintenance.
• Model 2 Cyberlab model made use of refurbished desktop computers.
• Model 3 Thin Client model came about to discourage theft and burglary whereby the monitors were connected to a centralised server.
• Model 4 Trolley model had a lockable trolley that was moved from class to class.
• Model 5 Tablet model was the last model before the model they are currently using.

The current model connects schools and government facilities using radio antennae. In a school you get wifi in a library and you can extend it to the whole school so that all students can get access to the wifi service. Even people who are not students gathered outside the school, to access the wifi. This posed a security risk for the school as crowds gathered, which was not intended. It also posed a burglary risk, so after lessons, principals switched off the wifi connectivity and this affects other facilities connecting to the main site as well.

Other challenges faced were issues with connectivity, and inconsistencies such as electricity. In the Eastern Cape severe weather affects connectivity, which was also a challenge.

They try to make the service they provide sustainable and they are coming up with different models to ensure they commercialise it and ensure sustainability. A more robust infrastructure needs to be deployed.

Ms W Ngwenya (ANC, Gauteng) said it was important for the presentation to mention that this programme was in line with the strategic objective of USAASA, which is to provide digital service, including to rural areas. She had concerns with the security of this project. The presentation mentioned that implementation is currently limited to 970 sites. Should you get enough funding, how many sites are you prepared to do? She asked if USAASA is monitoring the Phase 1 implementation of 970 sites for broadband. If yes, how are you conducting your monitoring and if no, why not?

She referred to the pilot project and ask what is the time frame for the pilot project before it ends?

She was worried about security for the roadmap models. The presenter spoke about the security challenge but if we do not have a strong security, all these projects are going to go down the drain, especially at schools. If there is no security, how sure are you that the computers will be there in the morning.

Mr M Nhanha (DA, Eastern Cape) remarked that there was no one from the USAASA Board present. It bothered him that the Committee only engages with bureaucrats. “We also want to be exposed to board members, I needed to make that comment."

He referred to the presenter’s comment that the project is piloted in OR Tambo District Municipality in Eastern Cape. The municipality referred to in slide 20 is not in OR Tambo. It got amalgamated with Queenstown to form something else, so the municipality mentioned in the presentation is non-existent at this stage.

He brought up the crowd gathering around schools which can cause a host of issues. With their expertise and knowledge in this space there should be ways to discourage crowd gathering. He suggested they look into solutions such as changing passwords and access codes on a regular basis. Given today’s technology this can be done remotely to prevent crowd gathering.

On connectivity to schools, he said that he has two in-laws who are both school principals but they are computer illiterate. They were given laptops, cell phones, iPads. These items are gathering dust at their homes. What are you doing to mitigate this kind of situation? It is throwing money to give people there tools yet unfortunately they cannot use them. What are you doing to address this?

He had been informed that USAASA is presently fighting a number of lawsuits from service providers. It is required to budget for such events but it has not made any such budgetary provision. Is it confident that it has a watertight case or does it not have sufficient money to budget for this?

He referred to South African Airways and said that some of the SAA board members were serving on no less than 21 boards. Now there are 30 days in a month. One has one's own personal business as well. How would one ever have sufficient time to apply one's mind to SAA. He wanted to check how many other boards USAASA board members are serving on. And which are those boards?

Mr A Arnolds (EFF, Western Cape) said that it was distressing listening to the presentation. They did not even get an update on the governance of USAASA which is the most important part. You are not going to solve your difficulties if there is no stability in the entity itself. He did not know why they did not raise those issues because this is where they must start.

Mr Arnolds drew attention to the statistics and performance of USAASA and said that it cannot go on like this. From 2013 until now in terms of targets and performance, look at clinics – 254, government facilities – 34. This entity is not performing at all. They are not efficient and not performing the task at hand. For us it is not on. The model did not work in the first place, and they are still struggling with burglaries. Why are you here if you cannot look after infrastructure? We want an efficient entity. It must be run efficiently.

Ms T Modise (ANC, North West) said that USAASA does not have a CFO. One cannot run an entity without a CFO. They say that by the end of March 2020 they will connect the remaining sites, but where are they going to get money. They are still struggling with the money. What is their plan? It seems that USAASA cannot sustain itself as an entity. What is the plan to overcome these challenges?

The Chairperson said that he was covered by the Members’ questions. He wanted to check what the progress was with the Special Investigating Unit (SIU) investigation. How is USAASA planning to recover the money? He asked the Department what the plans are for a permanent USAASA Board. They cannot be in a situation where there is no permanent board forever. “We need a functional entity to ensure efficiency".

The Chairperson noted the underperformance. You cannot run an entity with acting staff. The presentation needed updating as it reflected old municipalities; some have merged in 2016. What are the plans of the Department to address the targets which are very, very low?

Mr Shelembe replied that Phase 1 has 6135 facilities. They are working on a programme for Phase 2 funding. Treasury says they must explore external sources. They are working with the DBSA. “When done, we can access more funding to upscale the programme. They hope to start funding after the feasibility study.

There is monitoring during implementation. They get feedback on a weekly basis and issues get escalated to the DDG to assist. They also have monitoring facilities during operation.

The pilot project - as much as it is a pilot project - is seen as a feeder to Phase 2. It is going to be supported to ensure there is sustainability. You do not want to connect for a short period and in a year there is no connectivity. Once education relies on digital technology, the availability of such is going to be very high. There are lessons we are learning. For Phase 2, we will take advantage of whatever we have learned. It is a good thing to allow the community to use the service, for example at a clinic, and to have access to wifi. However, the unintended consequences are beyond us. We do not have that competence but want to work through this. They would look at the password, and pilot the change of passwords. They would feed this back to their technical people. Trolleys were used for security, that was because of the criminal element.

At some point they partnered with stakeholders to provide training to teachers. People need to be literate. In the Department of Basic Education, the budget initially covered the device and training; they need that training with the infrastructure. It is a mandate of Basic Education. The problem is that the scale is not meeting the demand, and they need to look at the number of people that need to be trained. They need to work with Basic Education.

On money to finalise connectivity for the remaining sites by financial year-end, Mr Shelembe replied that they do have money. These districts are very remote; there was a lack of infrastructure. They are working at finalising; the project is being implemented until the services are activated. They try to rationalise entities, to create infrastructure under one entity.

Mr Ngobeni replied that the presidential proclamation would merge entities. They have Cabinet go-ahead to finalise the business legislation to give effect to the Sentech and Broadband Infraco (BBI) incentive. They are re-purposing SITA now to focus on being a state IT company, so there is a lot of work there, including reviewing legislation and the new business case for the company. For USAASA and the Universal Service and Access Fund (USAF), work is underway to convert these into the Digital Development Fund (DDF). It will finance the project and consider funding the proposal with funding coming from government and the industry. Other work they are doing is looking at rationalising the regulatory functions in the ICT sector. On the skills development side, re-structuring work is currently underway, at different stages from different entities.

USAASA used to have a Board but it came to an end in 2018. And the interim board term ended at the end of October last year. The Minister has now appointed an executive caretaker who will be there for 12 months to ensure current operations are looked after. This in our view will fast track the restructuring we want to take place at USAASA. We do not have a Board, we now have an Executive Caretaker; therefore no Board is here today.

The Department is assisting the Minister to make appointments into the boards in terms of the DPSA guide on board membership. Board members should not serve on more than three boards. They cannot do justice to the job at hand, yet continue to derive financial benefit in the form of fees.

Mr Ford apologised for being nervous. He said it was his first time there and thanked the DDG for clarifying his appointment. His appointment is full time and so he is dedicated full time to USAASA. The Department gave him a brief. One of these is to stabilise the entity and ensure permanent positions are appointed as quickly as possible. He did not know what the overall budget is, but will find out and report back.

He noted the concerns around performance, and when they came again next year, he hoped the same concerns will not be raised again.

Ms Selloane Motloung, USAASA Company Secretary, replied about the SIU report, saying that the recommendations were applied and 90% were implemented into their policies. By the time the SIU report was released, the Board had already left USAASA. The question of whether financial recovery could be made needed to go to their Legal section, to go after them. USAASA had budgetary constraints so they could not go after them; it was going to cost a lot of money. The then Board had said how much they had to spend on recovering money, so it could not be done.

The Chairperson said that the NPA has established a unit that deals with recovery of funds. If USAASA cannot do it, why do you not refer it to the NPA unit? We cannot leave that.

Ms Motloung replied that in some instances that referral to NPA was made. The USAASA Legal section indicated that they would do that. She said that she will follow up.

The Chair said that the Committee needed that report in writing.
Mr Nhanha said that USAASA should also detail the budget in their response.

The Chairperson said the Committee will give them a time frame to give a report back to cover all those items.

Mr Arnold said that when they return, they should bring the USAASA human capacity report.

The Chair said that USAASA should deal with all of that in the report and bring it back to the Committee.

Mr Ford said that they noted this and will respond appropriately.

The Chair asked for a time frame for the report and asked if the Committee can give them two weeks.

Mr Ford appealed for more time. He needed to assess the structure in terms of who is where and assess what to do. He would rather come back to the Committee with a structure that makes sense because the one that exists you will see acting / acting / acting.

The Chairperson said the Committee would allow them to finish this quarter. In the next quarter you must bring us that report.

Mr Ford thanked the Chair.

Mr Netshidzivhani replied that they partnered with  OR Tambo District Municipality and other stakeholders to ensure teachers and officials will be trained. Going forward, they are going to other areas to roll out their services. They admit that they had challenges with security. They have learned some lessons and are working on a new model to take that into account. They have implemented over the years and this experience puts them in a better position to implement now. They ensure they deploy with security.

He explained that when they say government facilities they do not just mean schools, they are also referring to police stations, libraries, Home Affairs — they do connect them as well, and not just schools.

The Chairperson said that whatever is left out must be covered in the report. He thanked them.

The meeting was adjourned.        .


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