Department & GCIS 2019/20 Quarter 2 & 3 performance; SOE convergence & board appointments; with Minister & Deputy

Meeting report

Deputy Minister’s Opening Remarks

Ms Pinky Kekana, Deputy Minister of Communications, stated that the Department was doing well. However, there were a number of issues that it could improve on, such as the 30% set aside for advertising using community media platforms, as well as ensuring that Departments fulfill quotas for disabilities and other quotas, despite the financial constraints faced. Innovative solutions needed to be created to reduce the budgets, but to still do the work.
Government Communication and Information System (GCIS): Presentation

The Government Communication and Information System (GCIS) told the Committee that the target of the number of radio products and services provided was had been underachieved. Fewer radio services had been requested than anticipated when setting the target, and this was attributed to overall budget cuts. The radio unit would explore other platforms that did not necessarily require huge budgets. The target of 25 government communicators being trained was underachieved, as only nine were trained. This quarter coincided with public servants studying, and less training being requested. While the annual target had already been exceeded based on previous demand, there were likely to be significantly more training requests in quarter four.

Many government media briefings took place, and the GCIS preferred these to be at the GCIS. More work was needed to get all government briefings through Tshedimosetso House, Hatfield, and the Imbizo Centre, Parliament. It was targeted that 25 media briefings would be conducted, but only 16 had taken place.

Discussion

Ms P Faku (ANC) commended the GCIS for their great performance. Print media targets had not been achieved, and should have been achieved by the Department considering the level at which it operated. These issues needed to be managed in the next presentation to the Committee. She said there needed to be more uniformity in how communications were managed, especially on pronouncements of Cabinet. The presentation had stated that some people were not available for training, but standards needed to be set for spokespersons and other persons at the national and provincial level, so they had to attend training. It must be ensured that all government departments understood that they needed to utilise platforms such as community radio stations and other similar platforms, as people needed to hear the pronouncements of Cabinet.

Mr L Mokoena (EFF) said that the Free State office had reported that there were complaints regarding ineffective GCIS departments. Furthermore, the globalisation of the rugby world cup homecoming had been largely successful, while on the other hand, the homecoming of Zozibini Tunzi, Miss Universe, was not as successful. How society was being galvanised needed to be more equal, as this portrayed a wrong impression of where they were in society. The lack of radio station coverage in rural areas needed a solution, because key issues on health or voting agitation did not reach rural communities, resulting in them remaining marginalised. These areas were adequately equipped with community television stations, and legislation needed to be loosened up so it was not as cumbersome in order to get television stations going.

Mr L Molala (ANC) commented that community radio stations should be the biggest concern, as they needed the most support. Co-ordination around government communications to the public should be central.

The Chairperson said that the district delivery model was an issue linked to the budget. The budget needed to be consolidated for communications. Training was also hindered by budget, and he asked for clarification on the R15 million that had been mentioned. Was it a consolidated report?

Department’s response

Deputy Minister Kekana said that the GCIS and the Media Development and Diversity Agency (MDDA) should be taken to the Presidency. Regarding the question about reaching out to community media platforms, this was dealt with by the MDDA and not necessarily the GCIS. The 30% of budget set aside that had been mentioned in the opening, was a chunk of money that was not found with the Department but was part of a separate department. The Department was engaging with Treasury to find documentation that would help it to hold other departments accountable for this spending on communication. There was a general undermining of the GCIS, so the Department was looking into reconditioning the institution as the centre of government communication. This would ensure that departments and entities had a central message released to the public. This co-ordination was necessary, and issues such as the disparities mentioned regarding the rugby world cup and the homecoming of Miss Universe, would not happen. The Department wanted communicators to be more responsible to the GCIS, which would require training and a coordinated centre. The first priority was strengthening the institution and filling the vacant posts.

Ms Phumla Williams, Acting Director General: GCIS, said that South Africans needed to change their mindsets regarding community radio stations. They had to be seen as a valuable means of communicating their messages, as well as those of political parties and government departments as well. Community radio stations needed support, as there was other no way for them to succeed. A decision had been made to no longer buy media through outsourcing, for the reason that media agencies would not utilise community radio stations. At least 10% to 20% of departments’ budgets for advertising should go to community radio stations so that they could survive.

Mr Hennie Bekker, Acting Chief Financial Officer (CFO), GCIS, said that they had concluded interviews for the position of provincial director. The recommenced candidate was of high quality and would improve the overall performance of that office. There was one consolidated report of all the izimbizos that played a supporting role to other Departments. The Minister or Premier would ask the GCIS office to assist in coordination on this. In a quarter, it would all be assimilated into a report. There was a large aftercare element, but this was dealt with by the lead department or premier that handled the particular imbizo. A communication framework was being worked on which was very tightly aligned to the district development model. The technical committees sitting at a district level for the running of the digital terrain model (DTM) would have the GCIS district coordinator sitting on the technical committee to make sure they pulled all the communication colleagues into supporting the model.

Ms Tasneem Carrim, Acting Deputy Director General: Content Processing and Dissemination, GCIS, thanked the Committee for their support of community radio. The differences between the GCIS and the MDDA were challenging, but the GCIS had put together a schedule for all their clients that included community media. It was not stated in the annual performance plan (APP) however, that the GCIS provided community radio and print with free content, such as news bulletins. The GCIS organised shows with about 55-58 community radio stations as one. This meant if a Minister or Member of Parliament went to the GCIS studio, they were able to connect with all 55-58 community radio stations around South Africa. This was very valuable to government, and the radio stations were paid for this programming. In August 2018, a communication policy was adopted by Cabinet for the first time. It stated that government officials must respond to a call by media within a designated time. It governs the advertising and campaigning of government. The GCIS reports to Cabinet twice a year on government’s interaction and responses to media calls.

Department of Telecommunications and Postal Services (DTPS): Presentation

The Department of Telecommunications and Postal Services (DTPS) committed to achieving 22 Annual Performance Plan (APP) targets in the 2019/20 financial year. As at the end of the third quarter, 15 quarterly targets had been achieved, while seven were not achieved. This reflected a 68% achievement as at the end of quarters two and three.

The African Preparatory Meeting (APM) for the World Radio Conference (WRC) 2019 was hosted by South Africa. South Africa’s position was approved and advanced at WRC-19. 570 broadband facilities were connected and monitored. The draft Postbank Amendment Bill for the corporatisation of the Postbank, was developed consulted with relevant stakeholders. The reconfiguration of the Department had a start-up structure for the Department of Communications and Digital Technologies (DCDT), which was developed and approved by the Department of Public Service and Administration (DPSA), as planned. However, the transfer of employees into the newly reconfigured Department did not take place due to delays from DPSA, as the lead coordinators of this process.

The business case for the Digital Development Fund Bill could not be finalised due to approval delays by National Treasury on the appointment of the Government Technical Advisory Centre (GTAC). The draft Big Data and Cloud Policy was developed, but stakeholder consultation was delayed due to the need for the incorporation of additional issues into the draft policy. The framing document for the revision of the integrated information communication technology (ICT) policy White Paper was delayed as it was to be informed by the report of the Presidential Commission on the Fourth Industrial Revolution (PC4IR), which was released in January 2020. The Department was in the process of appointing a service provider to assist in expediting the project. This had showed the cracks in policy development.

In the e-Government programme for smart communities, the Digital Transformation Conference was postponed, as the Department had prioritised the development of a smart communities framework for consultation at the conference with relevant stakeholders. In terms of establishing partnerships, the Internet of Things (IOT) Council had signed a Memorandum of Understanding (MoU) with Department. The Department would prioritise the signing of the MoU in order to commence implementation.

Infrastructure installations to 194 facilities had been successfully coordinated, but only 89 facilities were connected, thus resulting in a shortfall of 11 facilities. Delays were largely due to technical issues such as network configurations between Broadband Infraco (BBI) and the State Information Technology Agency (SITA), which were in the process of being resolved.

Department of Communications (DOC): Presentation

The Department was committed to achieving 18 annual performance plan (APP) targets in the 2019/ 20 financial year. As at the end of the third quarter, 13 targets were achieved, while five were not achieved. This reflected a 72% achievement.

 Delays in the signing of an agreement between the DPSA and unions at the Bargaining Council had resulted in an underachieved target for the reconfiguration of departments. The agreement provided guidelines for the transfer and placement of employees. The process of matching and placing employees had commenced, and the transfer of employees into the reconfigured Department would be finalised in quarter four.

The project management office (PMO) established and operationalised to support the Presidential Commission on the Fourth Industrial Revolution, had not been achieved. The recruitment process was being finalised. An operations report on the PMO for the PC4IR would be developed in the fourth quarter. Implementation of the audio-visual small, medium and micro enterprise (SMME) programme, focusing on 4IR skills and enterprise development, was not achieved. In quarter three, SMMEs in the Northern Cape Province focusing on 4IR skills and enterprise development had been inadequate.

Discussion

Ms Faku said that the audit findings would hopefully improve in the next quarter. Both the Department of Telecommunications and Postal Services (DTPS) and the DOC needed to find a strategy or some kind of incubator programme that developed SMMEs. Strategies for black economic empowerment (BEE) were also needed. She commended the DOC for paying invoices within 30 days, and for achieving most of the targets.

Ms Z Majozi (IFP) said that the seven targets that were not met out of 22, could be attributed to a lack of policy development, as it was policy that drove departments and implementation. As the communications department, it should not have had a policy on information technology (IT) that had not been achieved. In future, policies needed to be in place for every sector. She asked that the Department give a more in-depth feedback from the Auditor General (AG) in order for the Committee to understand the single target not met and its implications.

Ms P van Damme (DA) said that there were media reports in the last week that stated the SA Post Office (SAPO) was unable to pay grants. She asked the DTPS to comment on the matter.

Mr L Mokoena (EFF) said he was concerned with the DTPS’s growing reliance on Treasury making policies for the Department. Why was the Department waiting for the Government Technical Advisory Centre (GTAC) to develop policy for the digital development fund? Had Postbank and SAPO separated, and what were the reasons for the separation? The Committee had received complaints regarding the board allegedly being involved in the procurement offices around the time the Acting Chief Executive Officer (CEO) was suspended, and he wanted this to be clarified. He said that the platform for legislation was in Parliament, so there was nothing wrong with departments initiating policy, but it must be in consultation with Parliament. Departments developed their own policy and it later got rejected because it was not done in consultation with Parliament.

Mr L Molala (ANC) said that a line had not being drawn between the DOC’s unit that dealt with monitoring entities, and what was done in Parliament. A synergy needed to be developed before issues arose. He asked for an indication of how many people had been trained and were in training in the SAPO agreement on training and volunteers. Engagement in Parliament on the Broadcasting Amendment Bill needed to be done in advance, as it may be a lengthy process before it went to Cabinet. With regard to the reconfiguration of departments and entities, the deadline was April, which was around the corner, and there seemed to be no finality on the matter, so perhaps a transitional process must be considered. The presentation had mentioned that a memorandum of understanding regarding e-government/smart communities needed to be signed, but this was later contradicted and stated it had been signed. He asked for clarity on whether it had or had not being signed. Were there any measurable outcomes from the Departmental participation in international forums?

Ms S Xego (ANC) asked if the Department would successfully reconfigure by the 1 April? Were there critical bills that needed the attention of Parliament?

The Chairperson asked for clarity regarding the conversion of a loan into equity.

DOC’s response

Mr Robert Nkuna, Director-General: DTPS, said that the DTPS had given the Department of Public Service and Administration (DPSA) everything required for the reconfiguration of departments. It had also given National Treasury everything needed to finalise a new budget for the new Department. Entities were not required to be merged by April -- only departments needed to be reconfigured. There would still be consultations over the reconfiguration of entities, as it required an amendment to legislation.

The media reports regarding the board of the SAPO being involved with procurement was not information gained at press conferences, but rather from leaked information. The board had responded to the best of their ability, but it would be followed up more proactively. The reports regarding the SAPO not paying social grants would be followed up on for more details.

The suspension of the Acting CEO was being investigated by the board. Nobody had been found guilty as yet, but the processes were under way. The Minister would take it up with the board to see if there was merit in allegations that the board was meddling in procurement matters. The Department was unaware of any transactions that the new board might have concluded. The board was looking into getting into partnerships, as it was clear that the fiscus was tired of supporting the SAPO.

The separation of SAPO and Postbank would affect the balance sheet of the SAPO. What would remain of the SAPO in the event of a separation was still being considered. The MOU with the Internet of Things Council had not yet been concluded. The World Radio Conference would need to come to Parliament for rectification to be translated into legislation. A key outcome of the conference had been the global standards for how 5G would be licensed throughout the world. The R1.3 billion loan for broadband was supposed to be a grant, not a loan, but when the Public Enterprises entity was established, it was then treated as a loan. The DTPS had been trying to reverse this, but the other shareholders – namely, the International Broadcast Centre (IBC) had advanced money to BBI. Thus, the Department had wanted the IBC to also convert the loan to equity, but there had been a delay as the BC meets only on a quarterly basis. Progress on this would be dealt with and reported at the next meeting.

Mr Omega Shelembe, Deputy Director-General: ICT Oversight, DTPS, stated that the advance to the BBI was a historical loan. The reason behind the conversion of the loan to equity was that it made the company not look attractive for other possible loans. These were loans that were not intended to be loans, but were now creating difficulty for the business. Funding given to state-owned entities (SOEs) going forward needed to be conditional, as stated by the Finance Minister in the budget statement. The Department was willing and could take guidance from Committee on the oversight role performed by the Department over SOEs.

Ms Nomvuyiso Batyi, Special Advisor : DOC, said that Bills coming to Parliament could be improved, as the Department had tabled potential bills coming up in the next financial year. The Department took not of the comments made by Mr Mokoena. Parliament had internal advisors, and the Department was being guided by Cabinet and cluster conversations, so the point where these converged needed to be determined. The DTPS had transferred an amount R5 million to the SAPO for its volunteers. The DTPS was waiting for an invoice from the SAPO, detailing how many applications had been processed. The Auditor General had not provided a formal letter with progress figures. Once the letter had been provided, it would be shared with the Committee. The Department had developed internally, but it needed to be tested using GTAC, so it was not necessarily an over-reliance on GTAC.

Minister’s Response

Ms Stella Ndabeni-Abrahams, Minister of Communications, said that when she was appointed, she had met with the SAPO leadership of the time and SASSA regarding how calculations were made in relation to the South African Social Security Agency (SASSA) project. SASSA had acknowledged a few discrepancies that needed to be corrected, which they were waiting for them to finalise. The dates regarding when money needed to be paid upfront was being discussed at National Treasury. The SAPO did not have an issue with capability, but it was rather an issue that was a political matter, where individuals wanted to contest the government’s ability to provide these services efficiently. There had never been a case where a beneficiary had not received their grant due to there being no money. The exception to this had been due to criminal deterrence, such as money being hijacked, or network issues. The SAPO, the Department of Social Development and SASSA, were determined to keep the project within the SAPO, and all media reports stating that SAPO would run out of money to pay beneficiaries was a blatant lie.

The recruitment process for a chief financial officer (CFO) and CEO was currently under way, and recommendations for a final appointment should be tabled by the end of March. There had been a number of people suspended, other than the Acting CEO previously mentioned, which had not been done by the previous board. The suspended employees were still on the payroll, however. The current board had found that they were deliberately slowing down the process and had thus taken the decision to suspend them without pay should they not avail themselves of suspension procedures. Government would not be held to ransom by individuals who wanted to serve their own interests. People making irrational decisions by suspending people with invalid information would also be held accountable, and consequences would be faced by all.

Parliament would be provided with the critical Bills once the reconfiguration had been finalised. There was a principal Act that affected all the other legislation which was being deliberated on in the Cabinet lekgotla, which was affecting the finalisation of the reconfiguration. The SOE rationalisation was not only a departmental issue, but also a government matter. The Department was required to provide policy oversight to entities that reported to it. When funding was allocated to the Department, it needed to be aligned to the plan presented to Parliament and Treasury, so the SOE policy needed to be aligned with the budget vote.

The Minister said she had met with a number of Ministers, Parliamentarians and the Portfolio Committee on Home Affairs, who all wanted to pull-out of SITA due to its inability to meet their requirements. The government did not want to see higher rates of retrenchment. SITA, however, did not receive funding from government. Its inability to meet the requirements of its clients threatened its existence, so it needed to be reconfigured. The board’s term had ended in December 2019, so a specific term would be organised to look into the current challenges as it transitioned into a reconfigured SITA. Cabinet approval was needed for appointing executive caretakers to help in the transitional process. The Department had explored all legal avenues.

Becoming a funded organisation needed to be looked into while considering the emerging challenges. Key to the challenges, which everyone called for, was spectrum release. For instance, if the Independent Communications Authority of South Africa (ICASA) decided to license, the available spectrum must be considered. It was currently at 27%, according to the latest reports. This meant that they would not be able to generate what they would want to generate on the spectrum. Shareholders therefore needed to intervene in the digital migration process that was delaying matters due to unavailability of funds, but also due to challenges faced in general, starting from ICASA, where the correct systems had not been put in place.

The Department had requested approval from Cabinet to change the digital migration model. The model had proven to be inadequate, as set-top boxes were still needed. The Minister had removed the tender for set-top boxes now there were none in the market, as manufactures were waiting for a tender. Cabinet had approved that the Department may seek alternative funding for manufacturers of set-top boxes so that the Department may provide them to the market, which they were responsible for.

The Chairperson thanked the Minister for her input on the matters raised by the Committee. The SOE reconfiguration was on the agenda for the meeting, but in the interests of time, the Committee would be provided with a report on the matter regarding the new status quo of the entities and how far the Department was with the plan presented in August 2019 on the process of merging.

Mr Molala requested that the Committee be given the opportunity to engage with the new SAPO board so important questions could be more relevantly answered.

The meeting was adjourned.