Hansard: EPC: Debate on Vote No 32 - Telecommunications and Postal Services
House: National Assembly
Date of Meeting: 21 May 2015
Summary
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Minutes
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Thursday, 21 May 2015 Take: 9
THURSDAY, 21 MAY 2015
PROCEEDINGS OF EXTENDED PUBLIC COMMITTEE — OLD ASSEMBLY CHAMBER
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Members of the Extended Public Committee met in the Old Assembly Chamber at 16:40.
House Chairperson Ms M G Boroto, as Chairperson, took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.
The MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES
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START OF DAY
APPROPRIATION BILL
Debate on Vote No 32 - Telecommunications and Postal Services:
The MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES: Hon House Chairperson, Ministers and Deputy Ministers, hon members, leaders of the information and communications technology, ICT, industry, distinguished guests, fellow South Africans, I am pleased to introduce the R1,4 billion Budget Vote No 32 on Telecommunications and Postal Services for policy debate and adoption by the House during this historic year of the 60th anniversary of the Freedom Charter. The charter continues to guide our policies as we implement our Vision 2030, the National Development Plan, NDP. We are part of the revolution that is driven by high-speed broadband Internet.
It is against this backdrop that we commend His Excellency President Zuma and the ANC for establishing this new department, which focuses on the radical socioeconomic transformation of our society using ICT to deal with the effects of persistent unemployment, inequality and poverty prolonged by the legacy of apartheid. In line with international trends, the availability and wide use of ICT is critical for socioeconomic development and will make South Africa globally competitive.
After much planning and consideration, it was announced by His Excellency President Zuma that, in this financial year, we will begin phase 1 of broadband roll-out in eight rural districts. These are Vhembe, Dr Kenneth Kaunda, Pixley ka Seme, Thabo Mofutsanyana, Gert Sibande, Umzinyathi, Umgungundlovu, and O R Tambo. The objective is to roll out scalable broadband infrastructure to connect all government institutions in these districts over the next three years. At the same time, we are finalising the business case and funding plan for phase 2 of broadband roll-out for the rest of the country, to be implemented from 2016 to 2020.
In the current financial year, we have been allocated R200 million to begin connectivity in these eight districts. We have already visited Vhembe, Umzinyathi, Umgungundlovu and O R Tambo. We have been encouraged by the political, traditional and community leaders who enthusiastically welcomed this project in their districts. We will be visiting the remaining districts in the next two weeks.
I wish to take this opportunity to recognise the Mayor of the O R Tambo District Municipality, Cllr Nomakhosazana Meth, as well as my special guest, Miss Lindelani Malinda, a student from Thengwe Secondary School in the Vhembe District. [Applause.]
Telkom’s designation as the lead agency for broadband roll-out is based on the investment it has made in rolling out an extensive fibre network, which accounts for 86% of the existing 170 000km of national fibre network. The department will be finalising the business case which will demonstrate the value for money and appropriate legal prescripts in finally designating Telkom as the lead agency for this broadband roll-out.
However, it is worth noting that Telkom, on its own, has committed most of its R5 billion capital budget towards reaching more areas and upgrading its technology as their main contribution to the implementation of South Africa Connect. Broadband roll-out is a huge but urgent project, which must not be delayed if we are to remain globally competitive.
Broadband Infraco has allocated R319 million over the next two years to extend its broadband infrastructure by 1 000 kilometres. It plans to establish 41 new points of presence, including in underserviced towns, such as Ulundi and Stanger. However, due to the projected cash-flow challenge, the company has scaled down 30 infrastructure-upgrade projects to the value of R450 million. In addition, we have advised Broadband Infraco to further scale down noncritical projects for it to continue as a going concern.
Over the last three years, the Universal Service and Access Agency of South Africa, Usaasa, has radically changed the lives of the people of the Msinga, Emalahleni, Joe Morolong and Ratlou Local Municipalities, who previously had little or no access to telephony or the Internet. The agency deployed and upgraded mobile networks to offer broadband, benefiting schools, small businesses and community members.
I am aware that some of the committee members visited some of these sites. I also had an opportunity to visit Msinga and Emalahleni recently, where I met mayors and councillors who are monitoring the positive impact of these networks and asking for their extension. All of them testify that these technologies are improving service delivery. An example is a local clinic in the Emalahleni Local Municipality, in the Eastern Cape, which is now connected to the high-speed 3G network. The clinic is now online and using the Internet to improve its service delivery. The nurses informed us that ordering medicines online has reduced supply delays from two months to just two days. In addition, they say they no longer experience problems of medicines expiring in their storerooms, as they now don’t have to order in bulk but only order what they actually need.
In the same municipality, we also visited a young entrepreneur, Vuyiseka Xatoto, who used to sell vegetables on street corners. However, thanks to the availability of these networks, he now operates from home and has expanded to sell high-value services, such as airtime and electricity. They say these technologies are improving service delivery and people’s lives. Bathi siyaqhuba. [They say we are moving forward.]
This financial year, Usaasa will upgrade networks at the Mutale and Chief Albert Luthuli Local Municipalities, where they will be connecting 10 more schools. The agency is also planning to connect three schools for people with disabilities. This year, the department will work with the regulatory body, the Independent Communications Authority of South Africa, Icasa, to review the levy for the Universal Service and Access Fund, Usaf. The aim is to align ourselves to the 1% charged by developing countries if we are to narrow the digital divide in these underserved areas.
On 6 March this year, Sentech completed its digital network deployment for digital migration. The network is ready, and they have R108 million for dual illumination for this year. This entity will also spend R180 million to upgrade its infrastructure. More importantly, Sentech, through its social corporate responsibility approach, connected community radio broadcasters to the parliamentary channel, last year. This means our communities are now able to easily follow the work we do in Parliament. I would like to greet all the listeners of the community radio stations who have tuned in to listen to today’s parliamentary proceedings. [Applause.]
We wish to commend the mobile and IT companies that have joined hands with government to roll out Internet connectivity. Just last Sunday, the community of Qunu benefited from the upgrade of the network to long-term evolution, LTE, and received a donation of connected computers to their local library. The librarians, students, farmers, and the unemployed and ordinary people now have the same access to high-speed Internet as those who live in the richer suburbs of Johannesburg and Cape Town. [Applause.] Indeed, the people of Qunu, such as one of our visitors, Ms Anda August, from the Mandela School of Science and Technology, can now proudly say that the Internet is the greatest equaliser in the world. Bathi siyaqhuba ngempela. [They say we are really moving forward.] [Applause.]
All state-owned entities, SOEs, responsible for ICT infrastructure, specifically broadband, are now under the department to achieve greater co-ordination and efficiency. During this financial year, the department will finalise a strategy for their rationalisation. The State Information Technology Agency, Sita, will drive e-governance and the security of these government networks. The National Electronic Media Institute of South Africa, Nemisa, will drive massification of e-skills. The South African Domain Name Authority, .zadna, will drive the allocation of domain addresses. The hon Deputy Minister Mkhize will elaborate on these programmes.
The Strategic Turnaround Plan of the SA Post Office, Sapo, has been finalised and will be submitted to Cabinet for approval. Let me take this opportunity to thank Deputy President Cyril Ramaphosa for his leadership and wise counsel in this process. The plan has identified and prioritised key strategic interventions to bring stability to the Post Office. We will prioritise the monitoring of the effective implementation of all aspects of the turnaround strategy.
The first and most urgent priority is the appointment of the board of directors. This process is already under way. At the same time, we will be expecting Sapo to appoint capable management to drive the implementation of the turnaround. The deployment of efficient ICT infrastructure to enable the delivery of modernised and efficient postal and banking services will be critical to Sapo’s turnaround.
In the next two years, priority will be given to connecting all post offices to the broadband network and to upgrading its IT systems. A new business model has been highlighted as key to the new approach. The SA Post Office will reduce its over-reliance on mail business and move towards balanced revenue, with a focus on retail, logistics, the Postbank and other e-services. We would like to thank the trade union movement which continues to work with us as we stabilise the labour environment at the Post Office. I would like to call on all stakeholders to join hands in an effort to regain customer confidence and loyalty.
Despite the challenges faced by Sapo, the company rolled out half a million new addresses. In addition, Sapo attracted 36 unemployed graduates from poor communities to participate in its work experience programme. We are pleased to announce that two of those students who benefited from this programme, Leon Isaacs and Siyanda Qoboza, have joined us today as employees, not just students, of Sapo. [Applause.] So, we can proudly say the Post Office delivers, whatever it takes.
We will work with Icasa to improve the regulation of the postal industry. This includes that of the extra-territorial offices of exchange.
We remain committed to the programme of financial inclusion through the corporatisation of the Postbank. We have made progress through the interaction with the SA Reserve Bank in the following areas. We have finalised the assets and liabilities separation between Sapo and the Postbank. We have provided the five-year cash projections for the Postbank. We are currently finalising the fit and proper assessment of prospective candidates for the Postbank Board, and we are finalising the discussions on the bank holding company, in line with the Banks Act and the South African Postbank Limited Act.
On 23 April, I received the final report of the National Integrated ICT Policy Review process. It is evident that many South Africans participated in this process, through public hearings and written submissions. The report represents an overwhelming sense of South Africans working together to bring about the policy environment that will make our task of using ICTs for development a success.
Key policy areas in the recommendations of the report include, firstly, a policy on universal, affordable and equitable access to communications infrastructure by all South Africans; secondly, an open-access policy that will reduce duplication, allow infrastructure sharing and direct competition away from infrastructure to services; thirdly, a rapid deployment policy to enable the deployment of infrastructure for connectivity at a low cost and to remove bottlenecks; fourthly, a policy on the growth of the sector and local manufacturing in order for small businesses to thrive and to create jobs through ICTs; and lastly, a national policy on spectrum to deal with the use and allocation of this scarce resource.
Government is studying the recommendations in the report with the aim of finalising the National Integrated ICT White Paper for submission to this Parliament, this financial year. I would like to thank the panel for the sterling work done. I also want to extend my gratitude to the public for their active participation in providing us with their contributions.
I am happy to announce that, last Friday, more than 300 South Africans from across the spectrum of ICT, NGOs and trade unions joined me to launch the National ICT Forum, which will assist in the implementation of policy and the development of the ICT sector in South Africa. The forum has organised itself around four chambers: the economy, social outcomes, governance and security of digital networks, and the sector for inclusion of marginalised groupings, such as people living with disabilities.
As we roll out broadband and increase the uptake and use of ICT, we need to assure the public’s confidence in the security of these networks. We have made progress in the establishment of the cybersecurity hub in collaboration with the Council for Scientific and Industrial Research, CSIR, as announced last year. I recently visited the hub and was privileged to experience what it has to offer. We will continue to work together with the public and the private sectors to expand the capabilities of the hub as we prepare for its official launch in August, this year.
On the international front, we will continue to participate in multilateral and international fora, including the World Radiocommunication Conference to be held in November, this year. In addition, we will work with our fellow Brics countries to establish an ICT working group and plan of action for collaboration on ICT issues.
I am aware of the ongoing leadership challenges which have negatively impacted on the ability of the department to execute its functions timeously. I am attending to these challenges as a matter of urgency in order to ensure that the department delivers on its mandate.
In conclusion, I would like to extend my gratitude to all members of the portfolio committee under the leadership of the hon Kubayi for their excellent oversight work. I thank my own Deputy Minister, Professor Mkhize, for her excellent support. I would also like to thank the director-general and all employees of the department for their assistance, and my Ministry staff for their dedication. Let me also thank my wife and family who are with us here today for their support.
I call on this House to endorse this Budget Vote for the Department of Telecommunications and Postal Services. I thank you. [Applause.]
The HOUSE CHAIRPERSON (Ms M G Boroto): Thank you, hon Minister. Before I continue, may I welcome our distinguished guests in the gallery? Your presence here is highly appreciated. However, the bad news is that you cannot participate in the proceedings of this House. That includes the clapping of hands. So, work with me to maintain the decorum of the House. I thank you very much.
Ms M T KUBAYI
The HOUSE CHAIRPERSON (Ms M G Boroto)
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Ms M T KUBAYI: Hon House Chairperson, Hon Minister, Deputy Minister of the Department of Telecommunications and Postal Services, Members of Parliament, board chairpersons, board members, CEOs present, the students from the University of Cape Town who have been observing our process, as Parliament, on how we pass a budget, stakeholders, ladies and gentlemen, riperile [good evening].
Let me first acknowledge that, on this day in 1978, in our political calendar of events, the leader of the SA Communist Party and ANC stalwart, Ntate Kotane, died in Moscow. I congratulate the South African government for ensuring that his remains are brought back onto South African soil, as we commemorate 37 years since his passing.
Twenty years earlier, on this day in 1958, the Postmaster-General of England announced the first direct-dial telephone calls. The new, automated telephone connection meant that the operator was no longer needed. Communications tools and methods have evolved over time and now the matter is about the quality of service, affordability, accessibility and coverage provided within this space.
President Zuma declared this year as The Year of the Freedom Charter. The Freedom Charter is a living document and shouldn’t be treated as some recitation but as a document that carries a mandate from the people of South Africa for all of us.
At the core of government’s mandate is the transformation of the economy and inclusive growth. Radical economic transformation requires co-ordinated interventions in a number of sectors to fundamentally alter the structure of the South African economy. This requires an effective state that is decisive in its pursuit of structural change. The mandate includes advancing small, medium and micro enterprises, SMMEs, and co-operative development through set-asides for SMMEs and co-operatives to uplift the informal sector of the economy. “The People Shall Share in the Country’s Wealth” is not a slogan, but a mandate from the people of this country. There is a strong need to focus on the transformation of this sector.
South Africa continues to face the triple challenges of poverty, unemployment and growing inequality. Creating employment is not only the responsibility of government. Other sectors also have a role to play. In recent years, we have witnessed more and more announcements in this sector to shed jobs. This is extremely worrying, especially at a time when the NDP calls for bold leadership from both the public and private sectors to create job opportunities for the economy to make South Africa an even better country for all of us who live in it.
While we cannot instruct private companies and entities on how to run organisations effectively, equally, we cannot clap our hands when more South Africans will not have the means to provide for their families. This is a challenge that we must not only face. All of us must find lasting solutions to it. We cannot build a stable country and stable companies when the majority of people of this country do not have the means to survive. It is a risk for all of us if we are faced with this situation.
In fact, the sector-wide organisational rationalisation of staff flies in the face of the Freedom Charter we celebrate this year, in particular, the clause that states: “There shall be Work and Security.” This, again, is not a slogan but a mandate for all of us to follow.
The story of South Africa is not about people who quit when things got tough. It’s about people who kept going, who tried harder, and who loved their country too much to do anything less than their best. It’s the story of men and women who gave up everything to set up this organisation 103 years ago. It is a story of those who overcame oppression and fought for just and fair treatment of all human rights. It is a story of men and women who gave up their lives so that South Africa can belong to all who live in it. It is a story of young and old who believed that no government can justly claim authority unless it is based on the will of the people. This is who we are, as South Africans.
To respond to the challenges that are faced by this country, the ANC-led government, in partnership with the role-players, agreed on the long-term planning of all sectors. This includes the National Development Plan: Vision 2030 to expedite the creation of a better South Africa - and the future is undoubtedly broadband.
I need to say this. Even if the future is mobile, fixed broadband will still play a vital role. However, the lack of access to the 2,6 GHz bands for LTE is impacting negatively on the quality of the mobile and fixed-line broadband data networks in South Africa. We look forward to the development and publishing of the spectrum policy to ensure growth in this sector, hon Minister.
As part of its mandate, the portfolio committee received the strategic plans and annual performance plans from the department and its entities for interrogation. It can then make recommendations to Parliament on the Budget Vote of the department and its entities, as per the Money Bills Amendment Procedure and Related Matters Act of 2009. This Act allows the committee not only to reject or pass a Budget Vote, but to intervene in the budget.
Over the medium period, the overall departmental budget will increase from R1,4 billion in the 2015-16 financial year to R1,5 billion in the 2016-17 financial year. The budget is also projected to decrease to R1,3 billion during the 2017-18 financial year. From the budget of R1,4 billion allocated to the department for the 2015-16 financial year, R679,7 million, or 48,1%, is allocated for current payments. This includes compensation of employees, and goods and services. The 2015-16 financial year shows a different picture on the overall allocation of the department. A large portion of the department’s budget, which amounts to R642,8 million, or 46%, is allocated to ICT Infrastructure Support.
It is important to note the opportunity created by the decision by the President of this country and Head of State to create two departments from the old Department of Communications. This has constantly shown, and we, as the committee and members, have reiterated the importance of this decision, especially from the ICT point of view. We feel that there hadn’t been much emphasis and focus on the work on ICT, previously.
We support the process initiated by the Minister for the rationalisation and repositioning of the department to ensure that there is no duplication of mandates and that there is value for money in the department and its entity. We have requested the Minister to look at the capacity of the department and to act in the best interests of the public and the sector.
The committee felt that special attention should be given to the programme that has been underspending in the past and also ensure that the state-owned companies, SOC, unit is strengthened. We further raised concerns on the increased amount allocated for consultants, compared to the previous year. This is specifically because the President, as the Head of State, during his state of the nation address instructed departments to reduce costs on consultants. In this regard, we advised the department to submit a revised plan for this money.
The committee commended Usaasa on its work and current stability. While noting the important role played by Usaasa on the digital migration project, it is also important that the other work done by this entity is not overshadowed. The projects by Usaasa to connect rural communities remain critical. We witnessed this work when we visited Msinga during our oversight visit.
We welcome plans for more rural communities to benefit from this total universal connection. These aren’t just limited to a school or police station - Usaasa’s new model connects the community in its entirety. As the committee, we observed that the current policy and legislative environment for Usaasa needs to be reviewed in line with the modern broadband and data services, as its mandate was developed to cater for the telephony era. We look forward to that, Minister.
On the Ikamva National e-Skills Institute, iNeSI, the committee noted the importance of ensuring that there is a drive to develop skills within this sector, especially focusing on young people. We will monitor the progress of the merger and the link of this institution to the training sector, as we stated in our report.
Regarding Sapo, we commend the work done by the Deputy President, the Minister, the administrator and the current management of Sapo but, more importantly, the workers at the Post Office to stabilise and stop the bleeding at the company. The turnaround strategy creates an opportunity to build an organisation that is reliable, accountable, credible and effectively run. We continue to urge all stakeholders within the postal sector to work together to create a Sapo of the future. It is possible and it can be done.
With regard to Sita, the entity presented documents that were rejected by the committee. It was requested to resubmit, and this was done. There is a need for the entity to focus and start delivering on its mandate. We welcome the announcement by the Minister to look at Sita more closely. We believe attention must be paid to the structure of the entity, the board, the legislation and policies within the institution to ensure it delivers on its mandate. The appointment of Dr Mohapi gives us hope. However, we believe the environment at Sita needs to be addressed holistically, otherwise we fear that we might see the nineteenth chief executive officer.
On behalf of the committee, I wish to thank Mr Nomvalo, who was the chief executive officer of Sita. He worked hard during his tenure in a difficult environment and we wish him well in his future endeavours.
Broadband Infraco’s financial difficulties hampers it from achieving its objectives and founding legislation. The committee has requested the Minister of Finance and Minister Cwele to pay urgent attention to the situation at Broadband Infraco and ensure there are no unintended consequences.
We call Sentech the flagship entity. The committee commended the good work done and congratulated the entity on its 100% signal state of readiness for digital migration. Furthermore, we noted the stable environment within which the entity operates. We wish to congratulate the former chief executive officer who has now joined Sita, together with the board, which has left. We want to wish them well in their future endeavours and congratulate them for the work done in steering the ship at Sita.
The above are just a few comments. More detailed observations and recommendations are in the report tabled by the committee.
In conclusion, a journey of a thousand miles begins with the first step. If all of us can take the first step of ensuring that we do what we are expected to do, surely we should be able to build a thriving ICT and postal sector? It can be done. It is possible.
The ANC supports Budget Vote No 32. [Applause.]
Mr C MACKENZIE
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Ms M T KUBAYI
Mr C MACKENZIE: House Chairperson, while this isn’t the Health debate‚ I want to talk about four doctors and one very sick patient, Sapo. The first doctor is the appointed administrator‚ Dr Simo Lushaba‚ whose turnaround plan aims to miraculously turn the 2015 loss of R1,2 billion into a massive R1‚3 billion profit in just two years, by 2017.
How is the doctor going to effect this miraculous cure? Like a surgeon, he will cut and cut. Almost 3 000 staff will be chopped. Eight mail processing hubs and 652 retail branches will be shut down. He says he will put this patient on the road to recovery by cutting out its heart, liver and lungs, and yet still grow revenue doing much, much more with much, much less - but how will he do this? Well, Sapo aims to generate 55% of its future business on the back of a Cabinet instruction that government must redirect at least 30% of its mail and logistics business to the SA Post Office.
The DA’s Values Charter is based on freedom, fairness and opportunity. There is none of that here. The plan shuts down opportunity for any new entrant, SMME or other players in the market and it’s grossly unfair to any business competing in this space. It introduces a hidden subsidy for Sapo via the back door because no matter how atrocious or inefficient the service, the new customers - government departments and state-owned entities - are forced to use the Post Office. There’s no need for the entity to compete fairly on price or efficiency in a free market. This is a recipe for inefficiency on a massive scale with service delivery, once again, the biggest victim of all.
The second doctor is Minister Siyabonga Cwele, a medical doctor, whose charming bedside manner has sadly failed to stop Sapo’s terminal decline. After watching from the sidelines for months as the worst and bloodiest Post Office strike in recent history bled customers at a fatal rate, he finally acted. You can’t fault his diagnosis. With surgical precision, in November last year, he cut off its head by firing – sorry, resigning – the whole Sapo board of deployed ANC cadres and union representatives. He injected hundreds of millions of taxpayers’ money into the entity to keep it alive, and put it under administration, the intensive care unit for state-owned entities.
So, what were the Sapo directors doing while the entity was bleeding to death as a result of their criminal negligence? Well, they got paid, and they got paid very well. Over the last two financial years, the chairperson of the board, the third doctor, Dr Manzini, banked a princely R917 000 for attending 28 meetings. Mr G Mothema took home R872 000 for 16 meetings. Ms N Kela pocketed a whopping R1,038 000 for 36 meetings and Ms N Mthethwa cashed in R1,249 000 for 31 meetings. [Interjections.] The list of multimillion rand payments goes on and on.
As if this isn’t painful enough, the real insult to injury is the salary of the chief executive officer, Chris Hlekane, who took home R1,5 million in 2013 and a staggering R3,108 000 in 2014. That was the year Sapo didn’t table its annual report before Parliament because the Auditor-General couldn’t sign off on those financial statements. While Sapo’s management should run the enterprise, the board must exercise oversight by setting the direction and providing guidance. [Interjections.]
While not required to be hands-on, the board shouldn’t be hands-off, either ...
The HOUSE CHAIRPERSON (Ms M G Boroto): Order, hon member!
Mr C MACKENZIE: ... as this one was, bringing Sapo to complete collapse. A developmental mandate is no excuse for a lack of good governance. In fact, given the shareholder is the government - and therefore the South African people - good governance by directors of state-owned companies is just as important as that imposed on private-sector companies.
The symptoms of bad governance were clearly visible as far back as a year ago. The independent auditor’s report for the year ended March 2014 found “a material uncertainty which may cast significant doubt on the entity’s ability to continue as a going concern in future.” For the year ended March 2015, the report found the entity had breached several sections of the Companies Act. Critically:
The entity didn’t comply with section 129 of the Companies Act to consider a resolution to commence voluntary business rescue proceedings when it had reasonable grounds to believe that the entity was financially distressed.
It holds the board directly responsible for this serious breach of corporate governance.
The Companies Act makes no distinction between executive and nonexecutive directors. It applies to all of them. Section 77 of the Companies Act holds directors to account for consenting to carry on a company’s business, despite knowing that it amounted to reckless trading. So, who will be held to account?
I must acknowledge the Minister for having the courage to fire – sorry, resign – the sickly board in November last year, ending their free ride. However, will he send a message to other delinquents on the boards of state-owned companies, like SAA, the SABC and Eskom, that bad governance has consequences for them, personally, by laying charges under the Companies Act against those directors whose negligence led to Sapo’s critical condition?
My fourth doctor, the honorary doctor President Jacob Zuma, infamously told a SA Local Government Association, Salga, summit recently, “If I was a dictator, I would change a few things.” The SA Post Office’s dictator, Dr Lushaba, is not a Sapo director, either - or is he? Tell us, Minister, when will this competent SA Post Office board you spoke about be appointed?
An effective board creates value. It will take high-quality decisions to help Sapo achieve its objectives in a sustainable and financially responsible manner that grows its value, enhances its reputation and builds confidence amongst employees, customers, suppliers and all stakeholders. This is what we call good governance. South Africans, who are sick to death of bailing out inefficient state-owned enterprises, expect and are entitled to nothing less, especially when back-door subsidies are used to cloak protectionist inefficiency.
In conclusion, I suggest Dr Lushaba resist the urge to accept a Sapo board appointment. It may turn out to be a hospital pass, because if the Minister won’t hold past, present and future directors accountable, rest assured, the DA will. Thank you. [Applause.]
Ms N V NQWENISO
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Mr C MACKENZIE
Ms N V NQWENISO: Mhlalingaphambili, siyi-EFF asiluxhasi olu hlahlo-lwabiwo-mali. [Uwelewele.] [Chairperson, as the EFF, we do not support this Budget Vote. [Interjections.]]
Turning Telecommunications and Postal Services into departments has led to the fragmentation of some of the most crucial components of communications, leaving this entire department and its entities in disarray. Since this department split about a year ago, both heads of the new departments have not only failed to reintegrate this country’s communication framework and give direction to all stakeholders, but have spent valuable time fighting over who gets what portion of the Department of Communications.
It is no surprise, then, that this department is unaware of the challenges faced by most of its entities. The issue of Broadband Infraco is a classic example. Broadband Infraco may close in September and this department’s annual performance plan has not only omitted such crucial information, it has simply swept the entire entity under the carpet, as if it does not exist.
This department does not have a chief financial officer. A similar trend can be observed in its entities where crucial, funded positions are vacant or held by unqualified people who have been in acting positions for lengthy periods. This has resulted in the overuse of expensive consultants and crucial components of this department lacking leadership, accountability, planning and co-ordination.
We can all agree that access to information offers access to economic and educational opportunities, and has the potential to significantly improve Public Service delivery across all corners of the country. Access in South Africa, however, is skewed towards the rich. Government continues to provide cutting-edge infrastructure to well-off communities, avoiding poor and isolated communities that need it the most.
South Africa is lagging behind in providing equal access to fast and advanced broadband and its mobile services are among the most expensive in the world. The cost of voice calls and mobile data is a big concern to the millions of South Africans for whom every rand saved means more money available for other basic necessities. It is therefore quite irresponsible that government has failed to create legislation that will enforce fair, regulated prices. If we want to do more than pay lip service to economic growth and job creation and improve service delivery through universal service and access, government must step up and recognise the potential that broadband has to mitigate development challenges.
In conclusion, Mr Minister, if so much money can be shifted and paid to management, then you must pay the 150 Post Office workers who have been waiting for their salaries for the past eight years. Thank you very much.
The DEPUTY MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES
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Ms N V NQWENISO
The DEPUTY MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES: House Chairperson, I would like to acknowledge our Minister, Dr Siyabonga Cwele, Ministers and Deputy Ministers, hon Members of Parliament, organised labour, captains of industry, distinguished guests, ladies and gentlemen. I want to emphasise a few points about the value of what we are talking about, today.
When we talk about ICTs, they cannot be for their own sake. We’re talking about the means to fast-track access to knowledge, education and skills, all aimed at improving the quality of life for all. As hon members on the right-hand side, from the Minister to the chairperson, started saying, we have a huge responsibility that we were given by the voters to ensure that they do not remain marginalised but that they become active participants in the development of this country’s economy. Indeed, ICT is one measure by which we can see people coming in and being included in big numbers.
When talking about ICTs, one cannot help but remember all those who led before us - like the honourable Ivy Matsepe-Casaburri, for whom we had a lecture - mainly because they charted the way. They made us realise and understand that information and communications technologies are not for the elite, but for ensuring that people have easier access to government services.
The Minister has made reference to top priorities. We, on the side of the executive, under the leadership of the ruling party, are determined to play an active role in reaching out to the most remote rural areas. I’ve got quite a number of guests in our midst who come from those areas. If time allows, I’ll specifically acknowledge them.
However, I want to start with the difficult one - that we have taken time. We don’t want to claim easy victories. We have looked at the ICT global monitoring report by the World Economic Forum. This stated that South Africa’s rating has dropped from 70th to 75th out of 143 countries. Our intervention is clear and we are grateful that they still said we are one of the leading countries on the continent. We are grateful because we have the NDP, which gives us an opportunity to set clear targets to consolidate partnerships between government, social partners and the private sector. Our NDP targets are to achieve 100% broadband penetration, by 2020 and transform 70% of all frontline services to e-service, by 2019.
Of course, there are challenges in the system. One of them is that we have huge illiterate and marginalised communities. The question then is, How are we going to make it happen? How are we going to realise the targets?
We are reviving the Thusong Service Centres model by having localised ICT hubs in the areas that the Minister spoke about, which were articulated by the President. So, whatever we do is consolidated and we’re able to look at the numbers to see how well we are doing. The question of ensuring that our services are online is critical. It creates some urgency in all of us to have an appetite for e-skills because without those skills, we won’t be able to use the services.
There are quite a number of issues under adult learning that are pressing. We also have a huge component of young people who are excluded. Hence, the youth digital inclusion project becomes a priority so as to fight youth unemployment.
South Africa Connect is very strong on skills development. We are in the process of merging our skills development institute so as to make sure that they absorb larger numbers. The Minister made reference to the young people in our midst as our guests. We’ll be looking deliberately for those from the very districts of the vulnerable people, who will participate more and more. We will ensure that, through our centres, our iNeSI and other skills centres, they are identified, taken through the process and given opportunities to enter the sector. We will ensure that those with capabilities forge ahead and go to universities.
Government also has the Techno-Girl programme. When we talk ICTs, one of the major problems is that people do not get very far in terms of engineering and science degrees. We have a highly structured programme, in which various departments, including ours, are partners. We put young pupils through a three-year programme and ensure that, by the time they have matriculated, companies have helped them to master their careers in the sector, identify institutions where they will improve their learning, and assist them financially. We continue to work closely with our universities to ensure that, through their policies of transformation, they also assist to bring about gender imbalances in the system, which is also very critical in terms of our system.
We are part of the International Telecommunication Union, ITU. We have also used the International Day of the Girl Child to connect with some companies that agreed to go to one of the schools sponsored by Telkom, KwaMhlanga High School, and identify children who will be assisted by some of our SOEs to go through high school and to university. We have been to very difficult areas, where ICTs are not normally spoken about. For example, we created a website at Tlhabane, called www.ulwaziict.co.za. Mme Bosa Ledwaba had invited us to talk about gender-based violence. I think she is here. Our SOEs came up with a platform on which the community and the village, including municipalities, have to interact by using the ICT platform and creating e-files to fight gender-based violence.
I’m grateful to see that government has a clear policy on e-government. The creation of this special department for ICT really gives us an opportunity to strengthen our strategies in terms of ensuring that government officials and the community, at large, have clear e-strategies. So, besides school connectivity which has been the face and champion of our strategy, e-health, e-dockets and all the Es, including e-commerce, are skills that are to be mastered by our people and used for accessing critical information and access opportunities. The chairperson and the Minister, to a greater extent, have referred to issues of transformation, directly or indirectly.
We have also had a seminar on SMMEs. For us, that is the entry point where our private sector and SOEs have an opportunity to increase the numbers of people who will enter the system. It is an incubation which will ensure sustainability. Within it, we see opportunities for manufacturing where, instead of being consumers of all the gadgets we are talking about, we begin to produce not only for our communities but for the continent, at large.
We are also in the process of finalising and implementing BEE in the ICT sector. We will constantly monitor that with a clear agenda of fast-tracking the entry of our young people so that we don’t talk increasingly about ICTs for the elite but ICTs for all.
As has been said, Sita is a critical player when it comes to e-strategies. It is a strategic move to transfer Sita to the Department of Telecommunications and Postal Services. We will support the leadership of Sita and ensure that they focus on their mandate and that we strengthen their corporate governance.
Above all, we will hold them accountable to ensure that our government’s rating on putting services online improves drastically. We do not want to hear complaints about difficulties in terms of ICT not working. We do hope that the leadership of the captains of industry will also spend a lot of their resources assisting us to create this information society that we badly need.
I would like to acknowledge the presence of women in ICT. They play a major role in ensuring that there’s constant conversation in our industries about the importance of including those who, otherwise, would not have come on board on their own. We see them as mentors. We see them as supporters of those who would, otherwise, be marginalised and would not succeed in these companies.
We have worked closely with our partner departments, such as the Department of Higher Education and Training. It is our wish that they dedicate some of their colleges to ICT to make sure that, in this revolution, which is so critical for boosting our efforts to transform society, they are dedicated to the development of ICT skills. The aim is to ensure that our companies then also use them as colleges for transformation, enterprise development and skilling people, giving them the opportunity to enter the value chain.
It is also important for me to thank the leadership of the department. I see the directors-general are here. They have held us by the hand since our arrival in terms of shaping our thinking, on policies and understanding the sector, as a whole. We also thank the Minister of Telecommunications and Postal Services for the constant meetings in which we have engaged with all the players and got clear guidance in terms of priorities.
Ngiyanamukela nonke eniphuma eHluhluwe, e-Joe Slovo, eMpumalanga Kapa, njalo njalo. Siyabonga kakhulu futhi sethemba ukuthi niyoqhubeka nokweseka izikole esizakhile. Baphuma emaphandleni lapho besihleka khona sithi uhamba kugraveli amahora amathathu ugcine uzwe ikhanda libuhlungu futhi ushaywe uvalo. Sibonga kakhulu ukuba khona kwenu. [Ihlombe.] (Translation of isiZulu paragraph follows.)
[I welcome all of you from Hluhluwe, Joe Slovo, the Eastern Cape, and so forth. Thank you very much, and we hope that you will continue to render support to the schools which we have built. They come from the rural areas where we laughed that you travel on a gravel road for three hours until you feel your head spinning and you also become nervous during that time. Thank you very much for your attendance. [Applause.]]
Mr M HLENGWA
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The DEPUTY MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES
Mr M HLENGWA: Chairperson, hon Minister, whilst we want to honestly support your good intentions – which we do – and the good work the department has intended doing, the reality that we must confront is that, to begin with, this department should not even exist.
There is simply no reason that the Department of Communications had to be split into two departments. [Interjections.] It has caused serious overlaps in the sector and induced levels of confusion which are really unnecessary, hindering, of course, the principles of accountability in the communications sector. It has bloated the bureaucracy and taken much-needed money which should actually be used to roll out development, and so on. Instead, it is just paying Ministers and Deputy Ministers, now creating directors-general and so on, just creating a top-heavy bureaucracy which is totally unnecessary.
What should have been done is this. The Department of Communications should have been strengthened better, with the existing structures, in order for it to work. So, hon Minister, whilst we don’t doubt the work that you are doing, the point of departure is that your department should not be in existence to begin with. On that basis, then, we cannot support this Budget Vote.
We also want to say, as the Deputy Minister has said, the World Economic Forum says South Africa has dropped five places to 75th out of 143 countries in the Network Readiness Index. Mauritius is ranked 45th, while our neighbour, Madagascar, is 135th. This indicates that we are just not doing well. The NDP, in itself, is very clear in identifying those challenges when it states, “Compared with the best international standards, South Africa’s ICT infrastructure is abysmal.”
The social impact of ICT in countries such as Singapore has improved government efficiency - that is not happening in South Africa – ensured the quality of citizen engagement for policy-making remains high, and made it possible to increase the availability of the Internet to schools. South Africa is lagging behind there, as well. In the modern world we live in, South Africa cannot afford to continue to deny learners access to the Internet and technological advancements because of the gross failures of our government’s ICT policy. Whilst there is, of course, cherry-picking – that we’re doing well in this school and in that school – there are thousands of schools. We are clearly way behind where we should be. With the United Nations having declared access to the Internet a human right, this is a major indictment on South Africa.
We need a clear digital strategy, reduction in data costs, accessibility to technology by the majority of our people, and proper infrastructure to ensure our nation’s ICT and that we move forward. We cannot continue to be on the cusp of technological advancement while allowing Telkom, for example, to carry the monopoly on broadband access. If government continues to claim that we are advancing in ICT development while allowing Telkom to charge high prices, it will continue to shoot itself in the foot at every single turn.
Moreover ... [Interjections.] ... No. You see, those members there, because nibhalelwa izinkulumo zenu vele [your speeches are prepared for you, of course]. You can’t read it fluently, as we do. So, that is your problem, and that’s why you heckle like that. Don’t do that, hon members. Don’t do that.
I also want to say, Minister, the major impact of the high costs of communication hinders most students in South Africa. In addition, the ineffectiveness of the Post Office is detrimental to learners who are learning through correspondence, particularly through Unisa.
So, with that chaos going on, it would mean that there will be chaos in the academic lives of young South Africans who, on a daily basis, are struggling. They cannot afford to communicate because it’s so expensive. They cannot afford to travel because their travel costs are high. I heard the Deputy Minister speaking about all the “Es”. She forgot the e-tolls, which are just adding to the impact of travelling, which young South Africans have to be faced with on a daily basis. I thank you.
Mnu M L SHELEMBE
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Mr M HLENGWA
Mnu M L SHELEMBE: Sihlalo ohloniphekile, malungu ahloniphekile, nezivakashi eziqavile, ithi ingaba nkulu ingazekeki. Ayisazekeki-ke manje la. (Translation of isiZulu paragraph follows.)
[Mr M L SHELEMBE: Hon Chairperson, hon members and distinguished guests when an issue is too big, it is not easy to handle. This one cannot be handled.]
The Department of Telecommunications and Postal Services seems to be in a perpetual state of turmoil and inertia. The portfolio committee has expressed a number of concerns, which include the outdated policies of the department; the failure of the department to implement legislated policies and regulations; insufficient co-ordination and planning by the department and its SOCs; the substandard level of co-ordination in terms of planning across all spheres of government; and no chief financial officer. The list goes on and on, and the NFP shares these concerns.
Yesterday, severe criticism about the failure to comply with the internationally agreed deadline to migrate from analogue to digital terrestrial television was expressed during the Budget Vote debate on the Department of Communications. Such criticism is equally relevant today.
When one looks at the budget tabled here today, it is apparent why such failure is imminent. Only 3% of the budget is allocated to International Affairs and Trade. This is the programme that is tasked with co-ordinating and ensuring compliance with international agreements and obligations. Lack of priority placed on this programme is, in our opinion, an indication of the lack of direction which is prevalent in the department.
Another concern we have is the insufficient allocation for the department’s Policy, Research and Capacity Development programme. Research is the cornerstone of generating new knowledge, and development depends on knowledge. When the department neglects to give priority to research, it is limiting development potential. Future generations will pay the price of its inability to make the right decisions today.
The NFP also concurs with the portfolio committee in questioning the increased allocation for procuring the services of consultants and advertising. We view this as wasteful and bordering on being shameful.
As for the state of the Post Office, the NFP is dismayed at the prospect of job losses, which are envisaged in the turnaround strategy, as proposed. Whilst we understand the need for restructuring and organisational renewal in the postal service, we question whether job losses on the scale envisaged are necessary and justifiable.
Despite all the objections and concerns raised, the NFP reluctantly supports the Budget Vote. [Interjections.] [Applause.]
Nkul E K SIWELA
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Mnu M L SHELEMBE
Nkul E K SIWELA: Mufambisi wa ntirho wa siku, eka Holobye wa Ndzawulo ya Timhaka ta Vuhlanganisi bya Tiqingho na Vukorhekeri bya Tiposo, eka vatirhikulorhi Endlwini ku katasa na vaendzi va hina, ndza mi xeweta. (Translation of Xitsonga paragraph follows.)
[Mr E K SIWELA: Chairperson, Minister of the Department of Telecommunications and Postal Services, fellow members of the House as well as our guests, I salute you.]
I am humbled by the opportunity given to me to participate in today’s Budget Vote for the Department of Telecommunications and Postal Services. I must say from the onset that the ANC supports this budget. [Applause.]
The picture of Sapo is not as bad as the hon Mackenzie would have us believe. [Interjections.] This is why. The Post Office has been identified by the ANC as one of the state-owned enterprises that should play a critical role in the radical, socioeconomic transformation and development of the country.
With its 1,2 million km2, South Africa is the 25th largest country in the world. Having more than 2 400 postal outlets for a population of just over 52 million, the penetration of Post Office services is felt in all communities. This is particularly so in rural areas, where other service providers are not accessible.
The SA Post Office delivers millions of pieces of mail to over 5 million addresses, every year. This is amplified by the recent census of Statistics South Africa’s community preferences. This indicated that, although the market position for a conventional postal service is declining, many people simply find paper records more reliable and trustworthy.
The SA Post Office is also part of the global postal services which today process and deliver an estimated 381 billion letters and 6 billion parcels, annually, using an awesome worldwide network linking them together through sophisticated processes and technologies. The SA Post Office, on its own, is a massive organisation and a major player in the communications industry and the South African economy, at large. With nearly 22 000 employees, it employs more people than any government department and has more employees than many companies in the ICT sector.
The mail business, which is the key generator for Sapo, launched the first Southern Africa Postal Operators Association Forum in Durban, from 12 to 14 February 2013. This was in line with giving effect to the continuation of a collective victory against colonialism and the continued solidarity between countries under the banner of the Southern African Development Community, SADC, through realising South Africa’s compliance with the SADC Protocol on Transport, Communications and Meteorology, signed in 1996.
To this end, postal networks also provide financial, logistical and e-commerce services to countless customers, increasingly moving into the field of electronic services to better meet customers’ evolving communication needs. A number of Sapo officials raised other challenges during the committee oversight stage. These include the challenge of poor IT systems or the inability of IT systems to function optimally during peak times. This contributes to poor customer service, and the focus of the Minister should therefore be on modernising the entire postal system.
We note the bold, innovative and ambitious turnaround strategy that was presented before the committee by the administrator and Sapo team. The hon Mackenzie believes this strategy will not work. On the contrary, we believe it is the right medicine for the right sickness. At the same time, the vacancy of the entire board, coupled with the vacant posts of two critical senior managers, the group chief executive officer and the group chief financial officer pose a major risk to the successful implementation of the turnaround strategy’s planned, three-year targets. We therefore call upon Sapo to fill the vacant positions with competent people, as a matter of urgency.
France is the one of the countries that has shown innovation. For instance, postal service company, La Poste, has introduced a product called lettre verte [green letter] at a price approximately 5% below the ordinary priority mail letter. The product is marketed as an environmentally friendly alternative to priority mail and guarantees delivery within 48 hours. Just as the example above, this product increases flexibility for La Poste and allows for the aggregation of volumes to specific delivery days.
I raise these issues because fixing the postal system in the South African context where the country has the highest Gini coefficient is no easy task. Despite recent, modest economic growth and reduced overall levels of national poverty over several years, South Africa is trapped in a cycle of high inequality and extremely high unemployment. Fixing the postal system will require tremendous political will. For that reason, the Minister has intervened in the Post Office on the part of all the players as information technologies become an ever greater part of South Africa’s life through the realisation of the rolling out of 100% broadband penetration, in 2020. The reason for the existence of Sapo will gradually become pressing.
The need for immediate change is also pressing. The important goal is improving overall efficiency in the postal system and improving service for customers - not to preserve Sapo as we know it. As long as South Africans want to move pieces of paper around the country in planes and in trucks, a postal system is necessary.
In conclusion, the opposition has all the time in the world to seek, search for and find problems and just talk about them. We, in the ANC, on the other hand, do not only find these problems, we confront them, deal with them and provide solutions for the benefit of all. I thank you, Chairperson. [Applause.]
The TEMPORARY CHAIRPERSON (Mr B L MASHILE)
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Nkul E K SIWELA
The TEMPORARY CHAIRPERSON (Mr B L Mashile): I now call upon the hon Carter. [Interjections.]
Ms D CARTER: Chairperson, it sounds like I need protection even before I have started! There was a time after 1994 when there was great excitement and great hope about a wonderful future where everyone would co-operate and everything would work better than ever before. [Interjections.]
The TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Order, hon members!
Ms D CARTER: Everyone wants to be part of a good story. Last year, the ruling party went on and on about the good story. Like all stories, this was all fiction with very few facts.
Firstly, Sapo is an example of a good institution gone bad. Suppliers have not been paid since August last year and nor have Siemens and Syntel. Letters are no longer sorted by machines. Will Syntel carry on and will Siemens return? Will any of the suppliers get paid and are any suppliers willing to still do business with Sapo? Will SAA carry mail for it? [Interjections.] It is shocking that a state-owned entity can refuse to carry mail.
Cadre deployment has made many millionaires, but at what cost to the nation? On which date will the suppliers get paid? Where will the money come from and will suppliers get 100% of what they are owed?
Secondly, hon Minister, why did the government not step in at an earlier stage but allow the crisis to become full blown? We hear the regular chant of accelerated and shared sustainable economic growth that positively impacts on the wellbeing of all South Africans. Let us have some proof of these outcomes of economic growth so that what is set out in the Estimates of National Expenditure can become more than a fairytale to amuse the nation when load shedding is taking place. This is a new version of the emperor with no clothes wanting his subjects to marvel at his finery when he has nothing on.
The NDP recognises all too well the importance of developing a superfast, robust, reliable, secure and affordable ICT infrastructure and service. Our country’s Internet Service Providers’ Association is not putting enough money on broadband so that every South African who wants to can actually have access, by 2020.
Finance Minister Nene has allocated R1,1 billion to the expansion of broadband connectivity. How will this money be used? Internet Solutions is busy building the Cape Town-Johannesburg Internet superhighway using the Infinera DTN-X packet-optical transport network platform. This is going to offer speeds like we have never seen before. What alignment is there going to be between what Internet Solutions is doing and what government is striving for? We need faster and cheaper Internet. Broadband service providers are coining it at the expense of the poor.
Before 1994, there was racial discrimination. In 2015, we have Internet discrimination. Internet accessibility and affordability is a requirement for any country that seeks accelerated growth that is shared.
Minister, you can create a great legacy for yourself, just as Kader Asmal did when Minister of Water Affairs. You have to ensure that South Africa has the greatest broadband penetration that is possible. This job requires a leader with a sense of a mission and a strong board and department. This department must work with missionary zeal to finalise its local loop strategy. Getting role-players around the table is the quickest way of achieving rapid results.
I want to refer to the latest Akamai State of the Internet report, which tells us that we should be alarmed about South Africa’s broadband speeds and adoption rates. The global average connection speed is 3,6 Mbps. Ours is only 2,3 Mbps. The global average peak connection speed is 17,9 Mbps. Ours is only 6,9 Mbps. In South Korea, the speed is 22,2 Mbps. We need fast action, Minister, to get us fast broadband. I thank you.
Ms D R TSOTETSI
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Ms D CARTER
Ms D R TSOTETSI: Hon Chairperson, hon Minister and Deputy Minister, hon members, our guests ke le rolela kgaebana! [I salute you!]
The mandate of the Department of Telecommunications and Postal Services is to improve the quality of life of the people of South Africa through ICT. One of the priorities of this department is rural development in a form of connectivity in rural areas, whose communities were made foreigners in their own country.
All of that became history after 1994, however. South Africa under the leadership of the ANC is a country of choice for many. People come as asylum seekers and tourists, others for education, health or to seek permanent residence. All of this happens because South Africa is a better place to live in. [Applause.]
Yes, we acknowledge the unfortunate situation of xenophobic attacks. However, the manner in which the ANC-led government intervened, and how other foreign nationals vowed that they were not going anywhere but were here to stay tells you more about the hospitality in South Africa, with its people full of reconciliatory spirit. This is nothing else but fortitude – courage in a painful situation. That is how much people have confidence in this government.
It is through information and communications technology that people know about South Africa. It is through the postal service that people would connect via letters and public telephones without personal contact. It is a fact that, before 1994, people would never have thought of South Africa as a preferred country of destination. The ANC-led government will always exhaust all avenues to make South Africa a better place to live in.
Information and communications technology markets are being revolutionised by the rapid adoption of Internet-based services and wireless technologies and by the convergence of previously distinct ICTs. These services emanating from the ICT market have the potential to contribute to rapid socioeconomic development. Therefore, society depends greatly on the use of different electronic information and communications networks, the use of digital services and the contents made possible by the department.
To this end, the telecommunications and postal policy aims at ensuring that all households, businesses and organisations have well-functioning and reliable data connections and services. In addition, the operating environment for the policy is a technological development strongly shaped by the global character of the sector, changing user habits, and the challenges related to the reliability and safety of activities. Above all, the department is working very hard to ensure the affordability of ICT. Sentech plays a major role in ensuring the distribution of signal, thus enabling us to watch television and listen to the radio and ensuring that rural communities also benefit.
The decision by President Jacob Zuma to rename the Department of Telecommunications and Postal Services is sound and enables the department to focus on its core mandate. Internationally, countries like Finland have a Ministry of Transport and Communications. In Sweden, there is a Ministry of Telecommunications and Postal Services. The list is endless. Therefore, the debate about a name change does not hold water. Instead, through this department, government has, for the first time, published South Africa Connect, a broadband policy document which aims to connect 90% of the population, by 2019.
The current broadband policy places greater demand on Icasa to promote broadband access, including a data transmission rate at a speed of 5 Mbps, by 2016. The significance of this policy refers to data connections that enable effortless use of online content and services. The broadband speed is in line with international statistics, with the minimum speed for broadband connections at 256 Kbps.
To emphasise the importance of ICT, in June 2009, France’s highest court went as far as declaring that access to the Internet is a human right. So does South Africa. I would like to substantiate my statement regarding human rights and show the world the challenges faced by the ANC-led government.
It seems the more people preach change, the more they repeat history and resist transformation. Their former State President, P W Botha, is reported by the Sunday Times to have said the following in a Cabinet speech in 1985: Come to think of what would happen one day if you woke up and on the throne sat a kaffir. We have all the reasons to leave the Mandelas to rot in prison. We do not pretend, like other whites, that we like blacks. The fact that they look like human beings and act like human beings does not necessarily make them sensible human beings.
This is one of the reasons others will not support the budget - because it is meant largely to enhance the quality of life of the people who are perceived not to be human beings. I don’t know where the EFF stands on this one. Their IQ is questionable. Ignorant or retarded? I am not sure. What a shame it is, not knowing yourself!
Baheso, le etelletswe pele ke ANC. Re na le tshitiso e ngata Palamenteng, ya batho ba sa dumellaneng le ditekanyetso tsa ditjhelete. Le ha re se re bua ka tekanyetso ya kabelo ya ho fepa bana ba lona malapeng a kojwana di mahetleng, ha ba e dumelle le yona empa ba re le ba voutele.
Ka mantswe a mang, ha ba dumellane le hore Tlhahisoleseding le Dikgokahano tsa Thekenoloji, ICT, di be teng dikolong hore bana ba rona - e leng setjhaba sa rona sa kamoso - ba rue tsebo. Le se ke la thetseha ha ba fihla ba ema mona Palamenteng bare ... (Translation of Sesotho paragraph follows.)
[Fellow South Africans, you are led by the ANC. We have many distractions in Parliament, caused by people who disagree with the Budget Vote. Even when we talk about a budget allocation to feed your children from poor households, they disagree, yet they are asking you to vote for them.
In other words, they disagree that ICT should be taught in schools so that our children - the future generation – can be enriched with knowledge. Do not be deceived when they stand here in Parliament and say ...]
“I am an African”, when they don’t embrace the values of Africanism. They should be saying, “I want to be an African”.
To promote digital development, the department has also launched a programme for growth, innovation, digital services and evolution, in line with the National Development Plan. Coming to ICT policy review, the National Development Plan calls for the ICT infrastructure to be expanded and modernised.
The ANC supports the Budget Vote. [Time expired.] [Applause.]
Mr L R MBINDA
Ms D R TSOTETSI
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Mr L R MBINDA: Hon Chair, hon members, distinguished guests, the PAC supports this Budget Vote. [Applause.] Telecommunications and postal services are the backbone of our economy, particularly in trade, and vital for human connection. Hence, the level of investment in this department should reflect the seriousness of being players in the knowledge economy.
Communication infrastructure has been upgraded to what road and rail was in the industrial economic era. In the endeavour to make ourselves serious players in world affairs, the PAC is pleased with the mobile Internet penetration. Mobile operators have been deploying trend-setting technology which has given most of our people access to information. Nevertheless, the PAC is concerned with the prices of both voice calls and data that are too high. It is not enough for Icasa to drive the process of bringing the prices down. This newly created department has to participate in this discussion.
As the PAC, we are of the view that, as long as we remain a nation that does not aggressively roll out broadband, we will stay behind in the knowledge economy. Furthermore, by not adequately exploiting Sentech to bring about stability, we will remain behind in terms of voice and audio broadcasting.
The PAC is concerned about the executive part of the state and how they treat Postal Services. It is sometimes treated as an unwanted child. Although Postal Services remains the workhorse of the economy, the quality of appointments to the board of directors leaves a lot to be desired. We have seen a lack of commercial savvy and suspected unethical tendency in the people that are appointed to this board.
Furthermore, it is interesting that the previous board were mainly – if not, all - health professionals, which makes us question the balance on the board in terms of experience. Moreover, we see a trend of appointing highly inexperienced executive directors.
The PAC notes that the department has delayed the release of many forensic reports on Sapo. Furthermore, we have not seen any action coming out of the criminal investigation conducted by the Special Investigating Unit, SIU. There are rumours that those reports implicate a number of managers and directors.
A weak postal service reflects a weak government. Thank you.
Mrs M R SHINN
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Mr L R MBINDA
Mrs M R SHINN: Chairperson, hon colleagues, for South Africa’s ICT sector, the past year has been its most exasperating since the dawn of democracy. For more than two decades, stakeholders have participated in workshops, forums and policy reviews, often with high-powered international players, to advise the ANC how to make our nation the ICT powerhouse of Africa.
Through the Electronic Communications Act of 2005, we took our first steps towards joining the worldwide knowledge economy through converged electronic communications. For a brief period at the end of the Fourth Parliament, there was an encouraging spirit of activity. At the start of this, the Fifth Parliament, we took a great leap backwards. On a Cabinet whim, the former Department of Communications was split. This drastic move was contrary to international trends and the recommendations of the extensively researched ICT Policy Green Paper, gazetted in January 2014.
For the new Department of Telecommunications and Postal Services, the result of this split is, for example: a legal quagmire that has created uncertainty and mistrust in the sector; inexplicable delays in making critical decisions - for example, the spectrum policy has been treading water since 2011; little tangible movement on implementing South Africa Connect; a missed deadline on developing a policy to, for example, remove local government red tape that is the major hindrance in laying cables; foot-dragging on the future of Broadband Infraco; the expulsion of South Africa from the International Telecommunication Union; a dysfunctional department subject to SIU probes and disciplinary hearings, from the director-general down; more missed targets than ever before; and a budget underspend of 49% at the end of last year.
If you still practised medicine, hon Minister, you would be facing a malpractice suit. You said it would take three years for the new department to settle down. We can’t afford this. In the past year, we’ve dropped five places on the World Economic Forum’s Networked Readiness Index. At 75, we lag behind Mongolia, Bulgaria and Armenia. In Africa, we lag behind Mauritius and the Seychelles. We can’t afford to waste more time radically disrupting the sector for the sake of political whimsy.
Recently, the Minister said the lack of broadband networks reaching all South African citizens was a failure of the market. What rubbish! It’s being hobbled by a government that holds many stakeholder meetings but is deaf to the sector’s pleas for policy and regulatory certainty, less red tape and the rigorous implementation of the Electronic Communications Act. This ANC-led government must take the blame for broadband inertia. Get out of the way, Minister, and let the ICT sector deliver. It understands that telecommunications eradicates remoteness and gives people, irrespective of location, the opportunity to become Internet-savvy citizens and seek economic freedom.
That South Africa’s use of ICTs grows at all is thanks to the private sector’s commitment to facilitating our economic and developmental opportunities. For example, the three mobile companies plan to spend about R21 billion on telecommunications infrastructure, this year. This is good news - but there is a double-edged sword here. They are taking the capital expenditure route to deliver more and better services because the cheaper option – using wireless broadband spectrum - is denied them. This is thanks to the political meddling, crony favouritism and sheer incompetence that have bedevilled the transition to digital broadcasting. This has halted the release of analogue spectrum for wireless broadband use. This means mobile call rates remain high, proudly brought to you by the ANC.
Last week, hon Minister, you launched the National ICT Forum to consult stakeholders. Why? What can its participants tell you that surpasses the input recently given to the ICT Policy Review Panel or that of South Africa Connect’s National Broadband Advisory Council? They have been waiting to meet you for a year. Perhaps you should listen to them. In addition, how can an ICT forum not include a regulator? Where was Icasa, last week? Minister, in your departmental reorganisation, I challenge you to bring Icasa home where it belongs. [Interjections.]
One of the chambers in the new forum includes cybersecurity. Why? A cybersecurity advisory council to advise you on policy and technical issues was appointed, in December 2013. This council has often asked to meet with you, but you have ignored those invitations. The ICT sector’s impression of the Minister’s first year is that he is disengaged and disinterested.
The strategic plan of Sita, presented to the portfolio committee on 21 April, clearly illustrates ministerial indifference. It was a poorly photocopied cut-and-paste assemblage of previous reports. A schoolboy would be embarrassed to hand this in as homework. Hon Minister, you signed this report on 15 March. Did you read it? Perhaps not, as each page was marked “confidential”.
The State Information Technology Agency has gate-crashed the Western Cape’s Connecting Government project. By the end of this year, rural citizens will connect to the Internet at 215 far-flung public libraries. Throughout the province, citizens will get free Wi-Fi Internet at 384 government offices. Where the DA governs, it delivers.
The DA in national government will do things differently. For example, we will not handpick a JSE-listed company to head the national broadband network. We will make it an open process in which all network stakeholders can be involved and manage it. The DA national government will actually motivate and incentivise the private sector to roll out this network. We will foster regulatory certainty by establishing a skilled, properly resourced and trusted regulator. We will simplify licence conditions to foster a sustainable, price-competitive, consumer-friendly market. There will be opportunities for all to prosper. Personal and economic freedom will be promoted and protected. [Applause.]
Mrs J D KILIAN
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Mrs M R SHINN
Mrs J D KILIAN: Chairperson, Minister, Deputy Minister, colleagues and captains of industry in the gallery, information and communications technology is internationally recognised as a strong lever for social and economic development. Several speakers referred to that. It leads to job creation, small business development and the inclusion of marginalised communities.
The NDP reiterated that the country that seeks to be globally competitive must have an effective ICT system, which it called the backbone to a modern economy and its connections to the global economy. The NDP took serious stock of our ICT reality. More South Africans use mobile phones than listen to the radio – 29 million as opposed to 28 million. Despite the growth in the ICT sector, our people have not benefited from affordable, universal access to a full range of communication services, including broadband.
Most state interventions in the ICT sector were disappointing. Our country was lagging behind on the deployment of fast, advanced broadband and was characterised by policy constraints, limited competition, and weaknesses in institutional arrangements, et cetera. We don’t need the DA to give us an assessment and a SWOT analysis. The NDP did that. The national commission did that. [Applause.]
Other interesting ICT realities are that almost 10% of the GDP is spent on ICT goods and services, but ICT equipment is still mostly being imported. It’s much reduced – smartphones are available from R600, but we need to do more. We have doubled Internet access in recent years, although mobile and fixed-line data costs are still far too high. According to a Statistics South Africa household survey, 40,9% of South African households have at least one member who either used the Internet at home or had access to it elsewhere. That is progress. However, 30,85% of South African households use mobile devices to access the Internet. Unfortunately, 18% of rural households have to do the same, and that is, indeed, very expensive, as the hon PAC member said.
South Africa has exceeded the critical milestones of 40% access to voice communication and 20% access to broadband. Now, we need to push to achieve the NDP goal of 100% broadband high-speed penetration - 100 Mbps by 2030. The NDP recommended significant interventions and it is worthwhile reading them. Because of time constraints, I will not go into the details.
I would like to touch on the ICT policy review process. The hon Minister has already referred to it. It was a very thorough ICT sector assessment, which was commenced in December 2012, and the hon Shinn has indicated why we need to do it again. This was the major ICT policy review, foreseen by this government. It’s said that we had regulatory failure, so, let us look and assess the market and see where we went wrong. [Applause.]
The process followed by the panel was a very inclusive one. It was run over two years and it had different milestones – altogether, five stages. It was a framing paper which was published and was linked to the principles and the policy objectives of the South African Constitution, the NDP and other government policy frameworks.
The second milestone was a research project. It was a thorough impact assessment to determine where we went wrong, because we have not seen the benefits in all communities, particularly in rural areas. This informed the Green Paper which was released in January, last year. The fourth one was the discussion paper published in November 2014, and the last one was the recommendations report which was published in March, this year.
Throughout, there was extensive consultation over the two-year period. The report makes 168 far-reaching recommendations towards the development of a new and forward–looking, integrated ICT policy for South Africa. Government will implement those in regulation and in law. We will adjust where necessary. We will make sure that we align all those entities not performing according to the right mandate in order to support this new approach.
The Minister has referred to South Africa Connect before. The fact of the matter is that South Africa Connect will, in the course of this year, link additional government institutions and government buildings and reach the far-flung, rural districts of our country, as the Minister indicated.
The role of all public entities reporting to the department has been identified with smart goals set to achieve those targets. The ANC is keen to ensure that existing ICT infrastructure should be used and upgraded to fast-track connectivity for rural communities. We know that the South Africa Connect pilot phase will be run in those eight rural municipalities and it will ... [Interjections.] ... the hon Minister announced them and he also said so in our committee meeting. [Interjections.]
Let me conclude by saying the following. The ANC is committed to turning our country into a knowledge economy and a dynamic, connected information society, by 2030. [Applause.] We will do so by ensuring that communication costs are reduced and that all communities - also those in the remotest areas where the private sector, and may I add, the DA, has no reach - will be connected to high-speed Internet access. Schools, hospitals and clinics will become community hubs where people can tap into the benefits of Internet connectivity, knowledge, jobs and opportunities. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! Order, hon members!
Mrs J D KILIAN: As far as the comments on the DA would be concerned ...
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Kilian, just hold on for a second. Hon members, I thought you were going to sustain the level of noise that we experienced before, but now you are raising it. You are drowning out the speaker and, therefore, we can’t hear her. Can you please sustain the levels that we had before and continue to be honourable? Hon Kilian, please proceed.
Mrs J D KILIAN: You see, hon Chairperson, the DA’s input in today’s debate makes one wonder whether they are part of a different country than the rest of us. Do they realise where we come from? The DA is clearly unaware that the majority of South Africans still rely on traditional mailing services. Therefore, we have to make Sapo work for all the people of South Africa. [Interjections.]
Furthermore, I have never, ever negated my past, but may I say, it is interesting to see how many hon DA members are trying to wipe out their past through their connections, including the hon Dean Macpherson, whose father was a major funder. In fact, he will now inherit a much smaller fortune. [Interjections.] [Applause.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Round up in one minute. [Interjections.]
Mrs J D KILIAN: Chair, just to come back, the NDP ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! Order! Can you give her one minute to finish up? [Interjections.]
Mrs J D KILIAN: I am old, but not that old. Chairperson, the IFP mentioned Singapore ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order!
Mrs J D KILIAN: Chair, it is all ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order, hon members, you are ... [Interjections.]
Mrs J D KILIAN: It is all ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): You are unfortunately extending her speaking time, which you are not supposed to do. She had only one minute to finish. Hon Steenhuisen, are you rising on a point of order? [Interjections.]
The CHIEF WHIP OF THE OPPOSITION: Chair, I would like to ask the speaker if she would take a question.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Alright.
Mrs J D KILIAN: At the end of my speech. Yes. [Interjections.]
The CHIEF WHIP OF THE OPPOSITION: She has spoken about the hon Macpherson. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order, hon members! Order, hon member!
The CHIEF WHIP OF THE OPPOSITION: Where does her husband work? [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Just hold on for a second. Order! [Interjections.]
Mrs J D KILIAN: Please ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! [Interjections.]
Mrs J D KILIAN: ... extend my speaking time. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order, hon members! [Interjections.]
Mrs J D KILIAN: Chair ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): There is only one person that we want to check with to see if she can take a question. Hon Kilian, can you take a question?
Mrs J D KILIAN: At the end of my speech, yes.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Alright. She says after the speech. Can you allow her to continue?
Mrs J D KILIAN: Chairperson, it is good that the IFP member wants to compare us to the best in the world. It’s always good to target the best in the world, but we must be practical. Singapore has 5,6 million people. How do we compare ourselves, with 54 million, with Singapore? That country gained its independence from the United Kingdom in 1965. They could build themselves up. We only recently achieved ... [Interjections.]
Mr M HLENGWA: Hon Chair, through you, I was just checking if the hon member can take a question. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon members ... [Interjections.]
Mr M HLENGWA: There is only one Chair. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hold on, hon members. Can we check with the speaker at the podium? Hon Kilian, will you take a question?
Mrs J D KILIAN: At the end of my speech, yes, after I have concluded.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Alright. Thank you, hon Hlengwa.
Mrs J D KILIAN: Hon Chairperson, Britain has fared quite well. It is in the upper rankings, amongst the first 10, but Britain has a history of 200 years of democracy. They exploited the whole of Africa and took our mineral resources to build up their country. In fact, still today, they sit with the Cullinan Diamond. They have 63 million people in that country, we have 54 million. Please let us compare apples with apples. You cannot compare Switzerland with 8 million people in the size of Swaziland, or smaller. You cannot compare geographic areas that must be covered. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Thank you. On that score ...
Mrs J D KILIAN: Therefore we need to eradicate the past and roll out broadband to all communities, even in the remotest areas. Thank you. [Applause.]
The MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES
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Mrs J D KILIAN
The MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES: Chairperson, let me thank the members for participating in the debate and for their enthusiastic effort. Let me also thank those who really support this Budget Vote because ICTs and the work of this new department are so critical for our own development. This is not only for delivering government services, but to stimulate our businesses to grow, using these ICTs, to stimulate our youth and our people to adopt these ICTs for their own development. It is the only thing that will really change the face of South African society.
Let me respond to a few of the matters raised by members of the committee. Some of them were a bit sceptical, but let me thank them for their support for the turnaround of the Post Office because of the importance of this institution. I think I understand why the hon member from the PAC supports this - those who stay in poorer areas rely heavily on the services of this institution. Those who stay in cities and high-income suburbs may say all sorts of things because they don’t realise that the majority of the poor in South Africa today still rely heavily on the services of the Post Office.
Hon Mackenzie - is it Mackenzie or Makhenze? [Interjections.] Yes, Mr Mackenzie, the targets set for the turnarounds are high, but overzealous. They are achievable. The administrator has been working with the Minister of Finance over the last few months. When they applied for a guarantee, we put in those targets of three months. They achieved over 80% of those targets. So, it is possible if you have got capable leadership who can implement and do things. That’s what we are intending to appoint and we have said we will appoint the board very soon - within the next month or so.
There is no over-reliance on the government’s 30% set-aside. None. Key to the strategy is to diversify the services, reposition the company and focus on revenue, rather than just pushing the programmes. Yes, as for the government set-aside, no one will be forced, but Sapo will earn it because they have to go to each of the departments and demonstrate what is it that they will do differently for the benefit of their state institution. That’s the approach we are facing rather than forcing people to ...
Let me just highlight that, as we were discussing this matter with our Premiers, it was quite clear that some of the ... For instance, if we take the delivery of books, the infrastructure of Sapo is one of the best. In those provinces that have chosen Sapo for the delivery of books, there are never any delays. They do better than some of the private-sector companies that are there, at a much lower cost, for that matter. As the ANC-led government, wherever there are challenges, we are bold enough to take action, and we will continue to take action wherever there are challenges.
Thank you for labelling all the former board members as ANC cadres. I really hope that they heard you, and what I know is this. As I have said, we, as the ANC-led government, will be very careful to ensure that the board, whose appointments we are busy processing now, are capable people with track records of leadership, particularly at board level, drawn from all races in South Africa. [Applause.]
As for the fear of job losses, we, as the ANC-led government, are not for job losses. Yes, everyone has accepted that there are about 3 000 to 5 000 supernumeraries in the Post Office, but the way we plan to do it is not to cut jobs. What we plan to do is to give retirement packages to those who are getting close to retirement age. Because the Post Office will provide more new services, those who are not at retirement age will have to be trained in those areas. We will have to give some of them entrepreneurial skills and incubation for the development of their own businesses. That’s what we are planning to do. We are working with the unions to ensure that we minimise the impact of job losses due to this turnaround strategy.
As we have said if you have listened carefully, Broadband Infraco is not going to be bankrupt by September. It will have cash flow challenges. Having cash flow challenges does not mean that you are bankrupt. They still have assets. That’s why we are saying the company on its own has cut down on some of its operational costs or maintenance costs. We have to manage the cash flow so that the company will continue to be a going concern, going forward from September. However, if you think that you may want to buy it, it is not for sale. [Interjections.] No, it is not for sale. It is an important company for our country. We are rationalising it. That’s the programme we are following, for now.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Round up in one minute.
The MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES: I think we all agree that we have to reduce the costs to communicate. As for the ratings, I think is very important, members, not to twist them. The ratings are stating that South Africa is doing very well, globally, when one looks at the governance. So, our policies are recognised by the world as being correct. We are ranked 20th, globally.
Where are the challenges on access and e-governance? We are rated very low. That’s why we are prioritising this project of rolling infrastructure and ensuring that we get all government offices connected so that we can implement e-governance. So, we will radically increase our ratings once these programmes are on track. Thank you very much, Chairperson. [Applause.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Thank you very much, hon Minister, hon Deputy Minister, hon members and our esteemed guests.
Debate concluded.
The Committee rose at 18:38.
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
1. Draft Bills submitted in terms of Joint Rule 159
- Children’s Amendment Bill and Children’s Second Amendment Bill, 2015, submitted by the Minister of Social Development.
Referred to the Portfolio Committee on Social Development and the Select Committee on Social Services on 20 May 2015.
TABLINGS
National Assembly and National Council of Provinces
1. The Minister of Trade and Industry
(a) Report of the Industrial Policy Action Plan (IPAP) for 2015/16 – 2017/18 [RP 94 -2015].
(b) Industrial Policy Action Plan (IPAP) in brief – A User’s Guide.
COMMITTEE REPORTS
National Assembly
Please see pages 1959-1972 of the ATCs.
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