Department's Budget & Programmes 2003

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
11 March 2003
DEPARTMENT BUDGET & PROGRAMMES 2003

Chairperson: Mr N Kekana (ANC)

Documents handed out
Presentation by Department of Communications
Department’s Strategic Plan 2002-2005
2003 Department Budget Overview prepared by Parliament Research Unit
Budget Vote 27: 2003 Budget for Department of Communications

SUMMARY
Issues raised by Members in response to the Department's presentation on its 2003 budget and programmes included: the delay in licencing the Second National Operator, the overlapping between the jurisdictions of the Department and ICASA, problems experienced with the implementation of the 1800mhz spectrum, the Department’s plans for the implementation of the Edunet programme, its plans to launch the two new Regional Services channels and the costs of these; the ICT university.

Issues raised on the Department’s telecommunications policy: progress made on the establishment of the Domain Name Authority; the Post Office’s plans for the repayment of its R1bn loan and the sourcing of this repayment.

Issues raised on the Department’s multi-media services policy: the current status of Channel Africa, its benefits to the community and the Department’s plans to expand it; the reasons for the constant underfunding of the community radio sector and ICASA; the Department’s plans and projects to cater for the needs of people living with disabilities.

MINUTES
Presentation by Department on 2003 Budget
The presentation was conducted by Mr Joe Mjwara, Deputy Director-General, and his General Managers: Mr Jabu Radebe, Mr Harry Mathabathe and Ms Brenda Motapanyane. The presentation outlined the Department’s Review of 2002/2003, the key challenges for 2003, the advisory bodies reports, the national summit on broadcasting content and languages, the repositioning of the post office and a breakdown of the MTEF budget.

Mr Mjwara informed Members that Dr Andile Ncgaba, Director General of the Department, and certain other senior department officials were unable to attend this meeting because they were presently assisting the Minister of Communications in Mozambique. See Appendix 1 for input.

Discussion
General issues
Ms D Smuts (DP) welcomed the fact that the Department is looking seriously at the issue of digitalization of terrestrial services, and also referred to the National Summit on Broadcasting Content and Languages. It had to be ensured that all the relevant role players speak to each other at the Summit. She asked the Department to explain whether a time period has been fixed for this process, or whether standards have been set.

Mr Mjwara replied that the Minister would be advised on this and once the study is complete she will consult her Cabinet Members, because it is a cross-cutting matter. Cabinet will then provide its response, but it has to be remembered that the recommendations cannot subvert any legitimate role of the agencies or organs of the Department. It is therefore taken for granted that the respective circles of competence would be retained. The process is thus very consultative and the public is, in general, asked to participate. No specific recommendations have yet been received with regard to the setting of standards here.

Ms Smuts referred to the strategic approach followed by the Department and noted that most of the stated goals of the Department for 2003 relate to development and transformation, yet sustainable investment is not afforded as much emphasis. It appears that it is really the private sector that is providing universal service in this regard, and the fixed line operators are not delivering as they should. Should the Department be involving other bodies here instead of providing the service itself? For example, the new ICT university will be established, but South Africa already has good universities that can provide such skills. There seems to be a great deal of unnecessary duplication here and it should be liberalised, as was done with the cellular phone industry in South Africa.

Mr Mjwara responded that the success of the sector rests with the environment created via legislation and policy, and therefore no sector can be successful without a successful government policy regulating that sector. There is therefore an urgent need to agree on this sort of policy. A framework has been devised to achieve this, and the Department is currently striving to achieve this. There is a role for everyone, including the private sector. The market has fallen because not all South Africans have access to these services and facilities, and this is the reason for the fact that universal service has not been attained.

He added that, with regard to liberalisation, the Department is on course to ensure managed liberalisation. It has to be remembered that the market alone cannot deliver solutions and the Department needs to intervene in some cases, and there is thus liberalisation in the market. The industry is diverse and the South African Broadcasting Corporation (SABC) does not have a monopoly, because it does have competitors in the postal services arena, and the Second National Operator (SNO) is also about to be licenced. South Africa already has three cellular service providers, and this sector too is looking at possible expansion. There is thus no refusal by the Department to deal with issues of liberalisation, but the Department believes that it can be taken further if managed well.

Mr Mandla Langa, Chairperson of the Independent Communications Authority of South Africa (ICASA), stated that, with regard to the four year licencing process of the SNO, it is only the Gauteng Province that still has to be licenced, and assured Members that this process will start apace and there is thus no reason for concern here. Part of the need here is to stabilise the sector, and there is a perception of miscommunication between ICASA and the Minister. Yet ICASA has met with the Minister in an effort to identify a protocol so that at least the guidelines with regard to the manner in which the work can be done with an little commotion as possible can be devised.

The problem here does lie with the overlap of the functions of ICASA and those of the Department, because there are certain processes that will be underway quite soon that will involve the competencies of both, such as the Summit and what exactly is meant by the restructuring of the SABC. This will be discussed in a very big public process, and important topics here will be language, gender concerns etc. These matters can thus still be looked at in a collaborative manner.

Ms N Mtsweni (ANC) referred to the organogram of the Department and stated that it has to be checked whether transformation has occurred in the senior management and senior general manager structures.

Mr Mjwara responded that the Department’s senior structure is broadly representative of South Africa, but it also has to look at attracting more women into these top management positions. It does generally reflect the composition of society.

Ms Mtsweni asked whether the E-Africa Commission has already been established.

Mr Mjwara replied that a continent-wide strategy has to be devised together with the New Partnership for Africa’s Development (NEPAD).

Ms Mtsweni asked the Department to explain the progress it has made with regard to establishing the ICT university, because this is an important initiative.

Mr Mjwara responded that South Africa does not have a broadcasting school and instead collaborates with those who can provide this service, with the result that a sort of “cross-pollination” occurs, and it is not thus merely a matter of the service being provided by either the Department or the other institution alone. The Department is not looking to start the ICT university from scratch, but will work with those institutions. The ICT university is aiming to address the problem with black students that have graduated from universities and tertiary institutions that do not allow them to move up the corporate ladder.

Ms S Vos (IFP) referred to the repositioning of the South African Post Office (SAPO) and asked whether the end goal here is to work with the Department of Social Development with regard to providing sites for the payment of pensions? What role would be played by the provincial structures here?

Mr M Waters (DP) requested the SAPO delegation to explain whether the SAPO will become involved in collecting the payments of the social security grants?

Mr Twiggs Xiphu, the SAPO Group Executive: Corporate Services, replied to these questions by stating that SAPO is currently engaged in talks with all three spheres of government to ensure government makes use of its own investment in the Post Office, because SAPO has more offices on line than any other and is thus better placed to provide this delivery. SAPO has, in terms of the Electronic Communications and Transactions Act of 2000, set up two of the most secure centres, and it is also currently engaged in a pilot project in the North-West Province with regard to the payment of pensions.

Ms Vos noted that the R10m that has been allocated to the emergency call centres has not been spent, and a new tender has now been allocated. Has research been conducted to ensure that this service delivers on the ground?

Mr Radebe replied that when this initiative was embarked on in 1998 the Department did conduct a study on public emergency in general, and this study identified the following factors: firstly, there are a multiplicity of numbers used for emergency services. Secondly, the predominant language used in these centres are English or Afrikaans. Thirdly, the Human Resource Strategy was based on discipline, with the result that the call centres were staffed by members from either the South African Police Services (SAPS) or the Fire Department, who were not trained to take such calls. The fourth issue related to the lack of funding. It was thus discovered that the actual challenge here was service delivery or, more specifically, it was not so much about the ability to deliver rather than the quality of service delivered and the development of guidelines.

The building of these centres had to be started from scratch, and it should be done by the end of March or the middle of April 2003. A new person has been appointed to develop the technical side, and this was completed in November 2002.

The Chair expressed his disappointment at the fact that Sentech is not present at this meeting because it is will provide the digital backbone here, and they should have been present because this relates to their functioning and because the whole infrastructure will now change. Clarity is needed on the definition of the term “teledensity” as the cellular service providers have all overtaken the fixed line operators in many countries, yet teledensity is still defined in terms of the old “line into hole” concept. Here it has to be borne in mind that the cellular service providers have gone very far and the fixed line operators do not seem to be able to catch it, and the formula for defining teledensity is thus really outdated and has to be discussed.

The Chair noted that the presentation by the Department does not include a single reference to affordability, and it does therefore not indicate whether any of the services or facilities planned are indeed affordable. This is a cause of concern because the policy of the ruling party since 1994 has always been to provide “accessible and affordable” services and facilities, and the one cannot be provided without the other. “Affordable” cannot be left to the market but the Department instead has to intervene to ensure all services provided are affordable, otherwise they will not be accessible. The challenge facing this Committee for this year is the tariff structures.

The Chair stated that this Committee has no knowledge of the steps taken in the sector with regard to skills development. This has to be discussed with the institutions of higher learning because this Committee does have a responsibility here. The duplication issue is important, as raised earlier by Ms Smuts.

The Chair sought clarity on the Global Mobile Personal Communications by Satellite (GMPCS) facility.

Mr Radebe replied that this is an oversight by the Department as this should have been launched, but it could not be launched due to a technicality.

The Chair referred to the end of the second paragraph under the “Liberalisation of the sector” portion of the Budget Vote 27 document (see document) and asked whether it can truly be stated that “cheaper prices” will be offered.

The Chair requested clarity on the position with regard to the 1800MHz spectrum. The South Korean government has found interesting ways to implement the 3G spectrum, yet South Africa is still grappling with rolling out the 1800 spectrum. Why is it taking such a long time to roll this out?

Mr Radebe responded that the issue here is the determination of the availability of the spectrum because the bulk of the spectrum is being used by both SAPS and the South African National Defence Force (SANDF), and for this to be made available to them they will have to migrate. The final determination on this matter has not yet been made.

Mr Langa added that ICASA has established a commission to look into this matter exclusively together with people in the sector and government, to ensure that a comprehensive understanding is reached with regard to where this process is heading. Different approaches have been adopted with regard to the implementation of the spectrum, because Nigeria has established a separate institution that deals solely with spectrum issues. It is hoped that the migration referred to would happen apace to ensure the 1800 spectrum is deployed in as comprehensive a manner as possible.

With regard to the licencing of the SNO, this is being handled and ICASA is currently putting together both a staff and legal component to look at the Department and find a philosophical understanding that will ensure liberalisation takes place in as comprehensive a manner as possible.

Ms Nadia Bulbulia, ICASA Councillor, added that the SABC would have to apply to ICASA for the Bop TV Broadcasting licence, and this has been anticipated since the proposal forwarded to ICASA by SABC that, in terms of the Broadcasting Amendment Act of 2002, Bop TV be included in its programming.

The Chair stated that the Department has to check whether the SAPS and SANDF budgets cater for this migration.

Mr Mjwara replied that R56m has been allocated for this migration, and it will probably take place during 2003.

Mr R Pieterse (ANC) noted that the Department has referred to its National Address System (NAS), but what about those South African’s that do have addresses but are not even receiving mail? It was reported about three weeks ago that SAPO personnel were found guilty of actually dumping mail. How will this be addressed?

Mr Xiphu replied that this is a concern for SAPO and agreed with what was stated by Mr Pieterse. All efforts are being made to address this problem, especially the insistence on the inclusion of a zip code when mailing items.

Mr Pieterse stated that the presentation has also indicated that the Edunet programme will commence in schools and other educational institutions because there is a backlog in schools, especially those schools that do not have these facilities. But if this is rolled out now these facilities will not go to those targeted, such as the previously disadvantaged, the schools in the townships etc., but will instead go to those schools that already have these facilities, and that probably do not even need these facilities. The net result is that this would merely push back the frontiers with regard to poverty alleviation.

Mr Mjwara responded that the Department is working with the Department of Education to link all schools to this network. A digital partnership project is being engaged in which is aimed at converting computers for use in the education sector. To date 4000 computers have been allocated to schools, and the aim is to allocate 70 000 by the year’s end. This initiative will target those schools that do not have sufficient funds to purchase computers and IT equipment for themselves, and in this regard South African companies are being encouraged to donate the computers that they no longer need to those schools. 

Mr Dennis Memela, the USA Acting CEO, added that 4000 computers have been bought and these would benefit approximately 200 schools, and each target school will also receive a computer lab.

Mr Waters asked the SAPO delegation to explain whether the R1b loan from the Post Bank has been paid back to SAPO, or whether the accounts have been separated. If the accounts have been separated, who will the Post Bank come up with the R1b?

Mr Nick Buick, the SAPO CFO, responded that the method of funding the Post Bank by SAPO was discontinued during 2000. The amount of R976m shows up as a loan to the Post Bank by SAPO, and the interest on that loan is in accordance with market related rates. The accounts have been separated and the control of the management of cash has been shifted to SAPO.

Mr E Magashule (ANC) stated that he agreed with the Department’s approach in focusing on SMME’s. These are not specific to any one government department, and it is thus important with regard to the rolling out of services in future that these areas are named as this would allow Members to get a feel for the urban and rural biases. Thus the Department’s general statement of its internship programme does not give a proper feel of the actual breakdown via each constituency.

The Chair sought clarity on the Department’s plan to launch the two language channels introduced by the Broadcasting Amendment Act of 2002.

Dr Ihron Rensburg, SABC’s Managing Director: Education Public & Regulatory Affairs, responded that a comprehensive implementation plan will be developed for the two Regional Channels. It has to be remembered that the SABC’s finance model is reliant on its current revenue streams, and the impact that the new channels will have on the audience flows have to be fully established first. The current cost of the Public Broadcast Service (PBS) is approximately R450-R500m, and the cost is dependent on the following factors: firstly, whether these will be two full spectrum channels and, secondly, what the local content requirements are. It also has to be decided whether there will be mono- or multilingual programmes.

This is an opportunity for the SABC to take responsibility here and it wants to do so with care, especially with regard to the partnership with the Department that is aimed at assisting the SABC to meet its deadlines.

Ms Bulbulia stated that the “R450-500m” does depend on the type of service to be provided, and a market feasibility study has to be conducted “to see what can be done” with regard to local content, language etc.

Dr Rensburg stated that the Broadcast Amendment Act of 2002 requires the SABC to define itself with regard to public service broadcasting values and principles, editorial values, content, news, religion, universal service and accountability, local content policy etc. The pertinent question which arises is who then defines the SABC? Is this done via the input received from the public participation process, via the ICASA licencing conditions or is it done by the SABC itself? This is an important matter, and a 6-8 week public debate period is expected.

The Chair stated that his understanding is that policies are policies of the corporation, and when they are supposed to be incorporated into the licence issued by ICASA then it is done in this manner. But it has to be realised that ICASA does not decide policy, and there is thus no conflict here. Dr Rensburg is referring to the stand-off that has been going on for some time now with regard to the jurisdiction of the SABC Board and the Regulator.

Mr Langa stated that programming policy differs from the licence conditions and ICASA only seeks to ensure a fair and competitive environment by bringing the SABC in line with regard to  delivery on these issues.

Mr Mjwara proposed that the SABC and ICASA meet before the process commences, so that they can clarify what has to be done here. The Department has just completed a process of review of all these policies, the process will culminate very shortly and it will lead to legislative amendments.

Ms M Morutua (ANC) referred to the standard of service delivery provided by SAPO and sought clarity on what is being done to ensure that the staff are kept abreast of the latest policy and legislative developments, and whether the staff are trained regularly with regard to the implementation of policy.

Mr Xiphu replied by assuring Members that SAPO does provide training of its staff, and this includes training with regard to new systems put in place via the new regulations as well as ongoing training.

Mr Pieterse stated that he hopes that the Department’s plans accommodate the interests and needs of disabled persons, and maintained that these persons have to be part of the initial plan and should not merely come in at the tail end.

The Chair stated that this concern would be dealt with later under Programme 4.

Ms Smuts stated that some schools do have computers but are not connected to the Internet, and the law does not require that a special network be introduced for these schools. They should instead just use the Telkom services here.

Mr Mjwara responded that the law provides for Edunet to be introduced in public schools, but Telkom alone will not be providing the service. The Act provides for the use of all networks or dedicated networks, and there is no intention to exclude anyone here.

Programme 1: Administration
Mr Gore sought clarity on the R27,3m for “Total departmental receipts” for 2002/2003 in the Vote 27 document.

Secondly clarity is requested on the “Additional amounts of R35m, R29m and R19m” referred to under “Expenditure Trends” in the “Programme 1: Administration” portion of the Vote 27 document.

Thirdly, Mr Gore noted that there has been an inordinate increase in administrative expenditure in recent years, and requested clarity on this.

This portion was dealt with at the end of the meeting and the Char proposed that, due to time constraints, these questions be responded to by the Department in writing and forwarded to the Chairperson.

Programme 2: Telecommunications Policy
Ms Vos asked whether the transfer payments from the Department would be taxable at the standard rate, and also sought clarity on what the implications would be here.

Mr Nkateko Nyoka, ICASA CEO, replied that ICASA was ordered to pay the South Africa Revenue Service (SARS) just under R37m, and insisted on payment despite ICASA’s objections. The reason for the objection is that without amount ICASA would not be able to meet its mandates. Late in 2002 SARS then allowed ICASA to retain these funds with the proviso that these funds be handed over to National Treasury, and that it be asked to alter the budget to accommodate these VAT considerations. ICASA will resolve this matter. 

Mr A Maziya (ANC) sought clarity with regard to the difference, if any, between the mandates of the Universal Service Fund (USF) and the USA.

Mr Memela replied that the budget of the USA is an ongoing budget, such as the salaries etc., whereas the budget of the USF is project related, and it thus receives funding in those seven identified areas in which the USF is exclusively useful. There is thus a difference between the two. The current amounts allocated stand at R62m, and this has to be placed in context. In 1999 the ICT’s were introduced merely as an ends and not as a means to and end, and the problem that is now being faced is that they cannot simply be rolled out even though government is not entirely certain of what it is supposed to do. Studies were conducted on what is needed to properly deliver the ICT facility, and the USA is now ready to rollout these services to benefit the communities.

The Chair stated that he is not satisfied with the answer given by the USA, and this Committee has to schedule a meeting with them to look into their operations and functioning.

Mr Gore contended that the Electronic Communications and Transactions Act made provision for the establishment of the Domain Name Authority (DNA) and the certification authority amongst others. The Department is requested to provide feedback as to whether these bodies have been established, especially the DNA, and is also asked to indicate where exactly in the Department’s budget does it indicate the costs for this establishment.

Mr Radebe replied that a panel was established to process this matter, advertisements were placed in the press calling for nominations for appointments to this body and the panel is currently in the process of evaluating these nominees. Once this process has been finalised, the nominees will be handed over to the Minister.

Mr Mathabathe added that the implementation of this body is included in the Department’s budget, via the E-Business drive.

Mr Gore contended that the Department has been promising a Convergence Bill to this Committee for the last two years, yet the Director General has not delivered on this promise. When will this be done, and what will it contain?

Mr Mjwara responded that this matter will be dealt with during 2003 and the process will be commenced soon. It will be a consultative process and the Department will consult Parliament and interested parties. It is hoped that this matter will be completed by April 2004.

Mr Gore referred to number portability and carrier pre-selection, and sought clarity on the provisions made for these in both the Department’s 2003/2004 budget as well as the Medium Term Expenditure Framework (MTEF) allocations.

Ms Motapanyane replied that regulations on carrier pre-selection were promulgated in the second half of 2003, and as of 2004 all operators have to provide this facility in preparation for the introduction of competition into the market.

With regard to number portability, it is envisaged that this be achieved by 2005, and ICASA has to prepare for this by 2004. These two issues are thus on track.

Ms Mtsweni sought clarity with regard to the decrease in the “transfer payments per subprogramme” under “Programme 2: Telecommunications Policy” in the Vote 27 document.

Ms Mtsweni asked whether the Department is ensuring that the Multi Purpose Community Centres (MPCCs) are accessible to those for whose benefit they were established, and do those people in fact know where the MPCCs are located? This is an important question because it appears that those in the rural areas are not aware of these centres.

Mr Mjwara responded that this is not the only area in which these centres are contributing, and the challenge here is to improve the lives of people. He stated more can be done to make these services known to people.

Ms Mtsweni asked whether the SNO will be licenced in 2003, and whether the Department has budgeted for it.

Mr Radebe replied that this process is supposed to be have been completed, but it will be reprioritised in the budget to accommodate it.

Mr Mathabathe added that special allocation have been made to ICASA in the budget to provide for this.

Mr Nyoka added that an amount of R2m was allocated to ICASA about two years ago for this process, yet this amount is wholly inadequate. The net result was that ICASA had to cancel other projects it was engaged in at the time and focus its resources on the SNO licencing process. The finances for this matter are still not provided for in ICASA’s budget at the moment.

The complicating factor here is that the Committee often informs ICASA within six months of the passing of a Bill that “it has to do X, Y and Z”, with the result that ICASA is under pressure to deliver. It is therefore forced to cancel the projects it might currently be engaged in so that it can achieve those matters of paramount importance.

Mr Gore noted that the table under “Medium-term output targets” in this portion of the Vote 27 document refers to “A liberalised telecommunications industry”, and asked whether the term “liberalised” has been defined at all.

Mr Mjwara responded that Parliament spent a significant amount of time during 2001 on this issue in considering what exactly has to be done to restructure the sector as a whole. It was also realised that this meant that greater competition had to be introduced into the economy, and this meant that more players would have to enter the onto the field. This would be achieved via managed liberalisation.

With regard to the granting of more licences, it is hoped that the feasibility study on this matter will be completed by the end of 2003.

Ms Vos referred to the slide in the presentation entitled “Public Internet Terminals (PIT’S)” which indicates that a PiT truck will be built for the President, and sought clarity on the cost of this truck as well as its function.

Mr Mjwara replied that this truck will not be for the President but rather for the Presidency responsible for the MPCC’s, and this will assist the rolling out of those facilities. Each truck costs about R200 000, but this falls with the Government Communication and Information System (GCIS).

Mr Gore asked the Department to explain whether it believes the stated teledensity rate aimed for for 2005 can still be achieved.

Ms Smuts referred to Mr Mjwara’s statement that the MPCC’s include contributions from a number of government departments, and clarity is thus sought on what exactly the role of Presidency would be here.

The Chair stated that, due to time constraints, these questions have to be forwarded to the relevant bodies in writing, and they should then forward their replies to the Chair’s office.

Programme 3: Postal Services
Mr Waters asked SAPO to explain how the R1b loan will be repaid, as there is no provision for this in the budget. Would this then be financed via a subsidy and, if so, when will it be paid?

Mr Buick responded that the R1b was received by SAPO through the fiscus and in his speech Minister Manuel alluded to the contingency reserve fund, and also referred to the paying back of the R1b pending the finalisation of the business plan. This will be reflected in next year’s budget.

Mr Waters noted that the allocations to the Postal Regulator have increased, and sought clarity on what these funds are dedicated to.

Mr Mathabathe replied that there has been a major jump in the allocations to the Postal Regulator from R8m in 2001/2002 to R21m in 2002/2003, and this reflects the transfer of the regulatory function away from SAPO, because SAPO has traditionally been engaged in self-regulation. It is interesting to note that when this function resided with SAPO it performed it at R50m per annum.

Mr Waters contended that over the past five years Parliament has only recently received three financial statements from SAPO, and the statements for the 2001 and 2002 financial years are still outstanding. This cannot be allowed to continue. These outstanding statements have to be submitted to this Committee before its meeting with SAPO on Tuesday 18 March 2003 so that Members can properly exercise their oversight function. Should SAPO fail to provide these statements by then, it would simply have to be requested to appear before this Committee again on a later date when the statements have been prepared.

Mr Buick replied that Mr Waters is correct in contending that SAPO is lagging in this regard, but it is now up to date and the 2001-2002 financial statements are currently being dealt with by the Auditor-General, and they will then be presented to Parliament. He stated that he is however not sure whether they will be available to Members by Tuesday.

Mr Maziya stated that Postnet is an agency of SAPO, but in most outlets there is not Post Bank. Has the Post Bank been separated from SAPO. He stated that he was under the impression that they are not separate but that the Post Bank would be open as long as the Post Office was open, yet the perception these days is that the Post Bank operates in the same way as a normal bank and is open from 9am to 3pm.

Mr Buick replied that Postnet is not part of SAPO but is instead a separate entity, and is in fact SAPO’s competitor.

With regard to the Post Bank operating hours, the Post Bank will have the same operating hours as the Post Office, should that particular Post Office also have a Post Bank.

Mr Xiphu added that SAPO has been exploring the relationship which is roughly structured, but Postnet is definitely SAPO’s competitor. In fact, it has recently been discovered that Postnet is making use of SAPO’s networks and infrastructure to deliver its mail, even though the two are competitors.

Mr Pieterse commended SAPO on the “wonderful service” provided in the rural areas in recent times, and asked whether SAPO plans to introduce any more postal agencies in those areas.

Mr Xiphu responded that there will definitely be an increase in the number of such agencies, and SAPO is currently looking at various options to reach the rural areas, as well as the industrial or business areas. The negative experiences with regard to the quality of service of SAPO is regrettable and SAPO takes full responsibility for those cases, but it has to be placed in record that there has been an improvement in the quality of service in recent times. In fact Mr Waters himself has addressed a letter to SAPO commending it on this improvement.

The Chair stated that the problem here is that without an address people do not have an identity and “they do not belong to the capitalist mode of production”. This matter has to be taken seriously. In fact, SAPO could even use ESKOM’s blueprints for the layout of districts to find the physical residences of people, it is as simple as that.

Programme 4: Multi-Media Services Policy
Mr Maziya asked whether the viewership results achieved by Channel Africa in any way justifies the extent of the investment made in it.

The Chair stated that there is a slight error in the document because Channel Africa is in fact a radio channel, and reference should then be made to listeners rather than viewers.

Mr Mjwara responded that in 1994 Department submitted a request to Cabinet that Channel Africa be terminated because of the kind of programming it broadcast in the past, and there was thus a perception in South Africa that it was not a successful service. Yet the then Organisation of African Unity and other governments implored that it not be discontinued, and they argued that it was the only communications platform shared amongst African countries. Since then every effort has been made to retain its broadcasting status on the African continent.

Channel Africa broadcasts to all areas in Africa, and it therefore broadcasts programming in languages specific to each region. It is currently has the second largest audience reach behind the BBC, and ahead of the Voice of America and France International. If one compares this audience response to its financial backing, then the Department believes that it is well worth the R28m invested in Channel Africa. There is a large community abroad that relies on Channel Africa for information and news on the African continent, and Channel Africa needs to be repositioned to enhance its capabilities in this regard.

Mr M Phadagi (ANC) contended that SABC’s Africa Desk provides a lot of important information and asked whether the 2003 budget would allow for this to be broadcast during peak times, because at the moment it is screened “at ungodly hours”. It should be moved forward so that it can compete at the prime time slot.

Mr Mjwara responded that this is a programming decision that has to be decided by the SABC, but contended that he does not think any additional resources would be necessary to relocate its broadcast time.

The Chair stated that there have also been talks about the introduction of a Parliament Channel either on television or radio. It also has to be considered how Channel Africa could be improved.

Ms M Magazi (ANC) sought clarity on the underfunding of the community radio sector, as well as on the influence of this decision.

Mr Mjwara replied that R9m has been allocated for 2003/2004 for the provision of infrastructure aimed at giving expression to the Constitutional right to hear programming in one’s own language, and this has been provided with no strings attached. Only R9m has been allocated because of budgetary restrictions. A four year licencing process of community service is being conducted to identify whether, in terms of the requirements of the Media Development and Diversity Agency Act, every community should have its own radio station. A policy has to be devised here, and all efforts have to be made to roll it out quickly.

Ms W Newhoudt-Druchen (ANC) referred to the transfer payments per subprogramme under the “Programme 4: Mulit-Media Services Policy” portion of the Vote 27 document, and requested clarity on the planned contribution to disabled persons in the Department’s broadcasting policy. The Department is asked to explain the role it will be playing with SABC in meeting the needs of people with disabilities.

Ms Morutua asked why the budgetary allocations for people with disabilities are so low.

Mr Mjwara responded to these questions by stating that the Department is engaged in a project in collaboration with the disabled persons sector on such programmes, and during 2002 more than 700 programmes catering for the needs of disabled persons were aired. A facilitator and the issues that have to be programmed around have been identified, and the facilitator will then work with the stations to focus their efforts on those persons with disabilities. Here programmes will be hosted, slots will be provided for such programmes, and here funds will also be allocated by the Department for training as well. In fact, a significant number of people have already been trained in this area.

Ms Smuts contended that it is not the place of government, in a Constitutional democracy such as ours, to fund radio stations.

Mr Mjwara replied that this is a political question which the parties themselves have to debate.

Ms Smuts stated that the SABC proposed funding figures for 2003-2006 but these amounts will probably be much higher, especially in view of Dr Rensburg’s statement that it would cost R450-500m per channel.  Where would the SABC source the financing from?

Mr Mjwara responded that this should instead be dealt with as a policy matter and this is important because South Africans are constitutionally entitled to receive broadcast programming in their own language. The law does require government to provide access to those languages, six languages are currently being used by organs of State, and government will probably return to the legislature and ask for more languages to be recognised.

The Department is working the National Treasury on a consensus budget to which all government departments can contribute. Both the SABC and the Department of Trade and Industry will be consulted on this, and the Department of Trade and Industry has already indicated that it would be prepared to contribute here.

The Chair contended that this figure cannot be R400m, and this matter has to be sorted out.

Ms Vos stated that ICASA just cannot compete with regard to the salaries offered to the staff in terms of the expertise required, and now R7,6m is being allocated for increasing salaries. Is any portion of this amount being allocated to ICASA, so that it can retain its staff?

Ms Smuts stated that during 2002 ICASA was allocated R117m and it was clear that it would need much more to effectively meet its mandates. It has been allocated a greater sum of R128m for 2002/2003, but again it is clear that ICASA would need more than this allocation. Why does the Department constantly underbudget for ICASA?

Mr Mjwara replied to these questions by stating that this is due to budgetary limitations and other competing needs in the South African market. The Department is also “trying to make do”, and it would also like to have more resources at its disposal.

Mr Nyoka added that the allocations to ICASA increase every year during the 2002/2003 to 2005/2006 period, but the fact of the matter is that ICASA needs approximately R200m per year to properly meet its mandates. It is expected that this figure could be reached and ICASA can then be properly funded by 2006 to 2008.

Mr Gore stated that it has been reported that Capital Radio in KwaZulu-Natal is to be sold for R300m and it appears that a company has registered the intellectual property of this radio station, with the result that the station’s brand name has been taken away. It can then be concluded that without the brand name all that is being sold is the frequency, and the Department is asked to explain whether R300m can legitimately be spent on a frequency. How can the Department allow this transaction, and will the R3m be paid back into the fiscus?

Mr Mjwara responded that it is being disposed of, but the intention here is not to effect this via a lengthy court process. The amount of R300m has been mentioned, but Mr Mjwara stated that he is not certain of the actual amount. This process will be conducted by ICASA.

Mr Gore referred to the funds given by the Department to Sentech to settle its loan with the SABC, and stated that Sentech itself should be paying back its debt to the SABC.

Mr Mjwara replied that there were some complication with regard to the payment of R210m to the SABC by Sentech, and it was proposed that government, the SABC and Sentech each pay R71m. The R54m indicated in the Vote 27 document is in fact the funds to be transferred to the SABC in settlement of the debt.

The meeting was adjourned.