Department of Communications 1st Quarterly Report (progress on Implementation of Strategic Plans), with Minister

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Communications and Digital Technologies

25 August 2011
Chairperson: Mr S Kholwane (ANC)
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Meeting Summary

With the Minister in attendance, the Department of Communications presented its First Quarterly Report for the period 1 April 2011 to 30 June 2011 focusing on its performance against its targets identified in the 2011-12 Strategic Plan, corrective measures put in place to address areas where there were delays or no progress and its financial performance as at 30 June 2011. Areas in which there had no progress was attributed to human resources constraints. Details of the Department’s migration to its new institutional structure were presented. The proposed new organisational structure had been approved in principle by the Minister. Mr Radhakrishna L. Padayachie, Minister of Communications, and DoC delegates responded to questions from the Committee.

All Committee members commented that they found the presentation very difficult to follow. The Department was criticised for not presenting its progress as per its key performance indicators as had been requested by the Committee. Furthermore, the Committee did not have enough of the detailed information on which the quarterly report was based.

Committee members asked questions about the digital terrestrial television (DTT) migration project and when it would be rolled out. Committee members asked if the Department had planned a vigorous public awareness campaign for the digital migration project as the success of the programme was dependent largely on the public being aware of the programme.

Committee members asked if the Department had consulted its staff members about the planned migration to the new institutional structure. Why had the Department not already conducted a skills audit on which to base its plans for this new structure? The Department was asked about its international memoranda of understanding with other African countries and how these translated into benefits for the people.

The Department did not present on the Independent Communications Authority of South Africa’s (ICASA) progress with the Local Loop Unbundling process. The Department was scheduled to meet with ICASA the following week to extract more detail about the process. This it would present to the Committee within a fortnight. A Member commented that it was not acceptable for the regulatory bodies to always be asking for more time while the process of job creation in South Africa was put on hold.

Meeting report

st Quarterly Report (Progress on Strategic Plan Implementation)
In the presence of the Minister, Ms Rosie Sekese, DoC Director-General, introduced the Quarterly Report on its performance for the period 1 April 2011 to 30 June 2011. Ms Sekese spoke to the Department’s key policy considerations which included access and repositioning the public broadcaster in the changing environment; affordability in terms of the high cost of telephony and broadband in South Africa; content transformation and diversity; growth of the information and communications technology (ICT) sector; unlocking the potential of the industry to create jobs; skills development; institutional alignment; and the development of an alternative funding model to improve on the capacity of the Independent Communications Authority of South Africa (ICASA).

Mr Norman Munzhelele, DoC Acting Deputy Director-General, presented the Department’s Integrated ITC Policy Framework. The Department had conducted international best practice research for an integrated ICT Policy Framework which had been presented to management. No progress had been made on research for a National Incentive Scheme due to capacity constraints. Pre-inspection for the rollout of broadcasting infrastructure in fifteen community radio stations had been completed. 

Mr Linden Petzer, DoC Chief Director: Radio and Satellite Communication, presented progress on the ICT Infrastructure Development. A tender evaluation to appoint a service provider to determine current Broadband status in South Africa had been concluded. A service provider would be appointed in due course.

Mr Gift Buthelezi, DoC Deputy Director-General: ICT International Affairs and Trade, presented on the progress of the ICT International Affairs and Trade directorate. International training and development opportunities had been identified and SADC ICT structures were reported as having been further strengthened. No substantial progress had been made on the implementation of the NEPAD ICT Programme due to HR capacity constraints.

An update on flagship projects was presented by Ms Sekese. The DDT had been gazetted for public comment and the process to finalise the DTT Standard was near completion. The Department had developed a comprehensive ICT Rural Development Strategy which was aimed at identifying ICT interventions that would directly contribute towards the development of rural areas. The Department had also developed a job creation concept document which clearly spelt out the job creation interventions. Consultation with relevant stakeholders was underway.

The Department commented on those targets for which no progress was made. These included failure to develop an uptake and usage strategy with a focus on business plus Small, Medium, Micro Enterprises (SMMEs), government and individuals. 

Mr Sam Vilakazi, DoC Acting Deputy Director-General: Finance and ITC Enterprise Development, presented the Department’s expenditure to date. Areas in which the Department had under-spent were largely due to delays in the implementation of programmes.

Prolonged internal approvals due to lack of fully functional Governance Structures in the first two months of the reporting period was one of the challenges faced by the Department. Other challenges that hindered progress were the over-ambitious planning conducted on the assumption of vacancies being filled and delays due to prolonged engagement with external stakeholders on certain projects.

DoC Approved Organisational Structure
Ms Kedibone Sekwele, DoC Chief Director: Human Resource Management, presented the Department’s progress on its institutional review and re-alignment in a separate presentation. The proposed new organisational structure had been approved in principle by the Minister of Communications. The DoC was currently developing job profiles for newly created and redesigned Senior Management Service positions.  The Department was putting together a migration process that would guide the migration of employees to the new structure. The Department currently had excess staff who would be absorbed into the new structure.

Discussion
Ms T Ndabeni (ANC) said that the critical element of the Department’s progress report should be its key performance indicators with reference to its Strategic Plan. This was what the Committee had requested from the Department, yet the Department had failed to do this. Ms Ndabeni appreciated the narrative report but it did not assist the Committee in tracking the Department’s progress on its commitments. The next time the Department should present its measurable objectives in terms of the Strategic Plan. She pleaded with the Department to help the Committee do its job. Only a few of the challenges experienced by the Department were presented - right at the end. These were not detailed enough and should be more specific. For example, if for this quarter the Department had planned to fill 15 hubs but had not managed to do so, then the Committee should be given reasons for this.

Ms Ndabeni said that the same applied to the presentation on the budget. The Department had spent 18% of the budget and one of the reasons given was that the Department had failed to reach its target. The presentation did not inform the Committee whether or not the 18% spent talked to the objectives that the Department was supposed to have delivered on. Ms Ndabeni said that the Committee was planning on doing things differently this term. It had to stress that the Department’s mandate be delivered on according to the Department’s objectives.

Mr N van den Berg (DA) said he wanted to know on a weekly basis exactly what was going on in the DoC. On Slide 11 on the organisational performance for 2011/12 it stated that “a report on the implementation of the seven key interventions to reduce the cost to communication has been developed and presented to their Cluster”. Mr van den Berg did not have the information about this but would be glad if the Committee could receive a “full-text” on what exactly the seven key interventions were. If people were to ask Mr van den Berg questions about this he would be unable to answer them. There were many examples of this in the presentation. The Committee members needed more information so that they could understand exactly what was going on and where the Department was.

Mr K Zondi (IFP) agreed with Mr van den Berg and said that the Department had flooded the Committee with very technical information that was presented in a non-user friendly, “telegram” form and difficult to decipher.

Ms S Tsebe (ANC) said she was concerned that everything in the presentation was either “in progress”, “underway”, “awaiting approval of the Minister”, “awaiting approval of the Executive”, et cetera. Without more detail, how could the Committee assess the actual progress of the Department?

The Minister agreed that the report had been presented in a “telegram” style but assured members that behind each one-liner in the presentation was a box full of documents. The problem was not just this Committee’s problem or a problem with the meeting. The problem was that a different system of working in Parliament needed to be found which allowed members to be informed more adequately of the details they wanted. The current quarterly report meeting did not give members the opportunity to do that because members wanted to make an on-the-spot quarterly assessment of whether the DoC was making progress and meeting the objectives of the Strategic Plan. By the nature of this meeting, the DoC could not present detailed reporting of every single element. There was however a gap and creative ways to fill this gap should be found. For example, if one was looking for a detailed report on digital migration, it was entirely inadequate to use the quarterly report. Perhaps a set of information sessions on specific items needed to be held. These could be in the form of briefings with members. For example, DoC could give a briefing on the digital migration process where members could be furnished with the details of these projects and have the opportunity to engage with the process. Part of the problem was that members were also frustrated because they would like to get engaged with processes.

Ms Ndabeni said that when the Department previously presented to the Committee, the Committee requested a structure for the implementation of the Department’s institutional review and re-alignment. We agreed that plan was good, but who was going to implement it? Today the Department informed us that some of the programmes were delayed because of human resource-related problems which the Department had not told the Committee about at the time the plan was presented. The Committee asked the DoC how long it would take to full its vacant posts. None of the DoC delegates had picked up that progress would be delayed if these vacancies were not filled and so no risk management plan to address this had been developed at that time.

Ms Ndabeni asked how the Department had developed a plan for its new structure if it had not yet done a “skills audit”. Her understanding was that the structure of the DoC would be based on its functions in that it would have to be based on the Department’s objectives for delivery. The presentation however stated that a skills audit still needed to be done. Why was the structure not informed by a skills audit? All DoC employees should be aware of the Department’s vision and should know their contribution to achieving that vision.

Ms Sekwele replied that under normal structures the “structure followed the function” but in this case the DoC was undergoing an institutional review and realignment process. The DoC had therefore been anticipating changes to its function. Further, the ICT industry was always evolving. The DoC identified its function based on its Strategic Plan and the government’s priorities. A structure was then created to deliver on the functions. An audit would then be conducted on the existing skills to identify if there was a skills gap.

Ms Ndabeni responded that she did not want to hear next year that the Department was still reviewing its migration to the new structure because it had identified gaps in its skills base. There was a concern that this would be the case.

Ms Tsebe also asked how many jobs the DoC would be creating with its plan to “unlock the potential of the communications industry to create jobs”. This was too vague and did not sufficiently cater for the national drive to create jobs.

Mr Zondi asked how the Department contributed to the South African economy in which the DoC played a competitive part. This was not clear from the presentation.

Mr van den Berg  asked where the Department was with the DTT programme. In rolling out the DTT, all the entities needed to come to the party including ICASA, the SABC and Sikhulile Infratec Engineering Consultants (SINTEC). They had to reach certain time-frames to meet the “magical” goal at the end of 2013. Were all the state owned entities (SOEs) on track? Had ICASA done its regulatory job? Was the DoC reaching its goals? He was concerned that the Department did not know where it was at the moment and what its next step was. All these issues were so important for South Africa. The goals of the President and of the government could not be reached if the goals of the DoC were not reached. He stressed that the DoC was a lead department. If the President and the Executive did not put greater emphasis on the DoC then we would not reach our goals. It was so important for the DoC to succeed. A few months ago the Committee heard that the DoC was a sinking ship but things seemed to be going a lot better.

The Minister responded that certain parameters had been clearly established to assess progress with the digital migration programme. There was an unmovable deadline of December 2013 for switching off the analogue signal. The DoC had started to move the whole family of institutions to start converging together in ensuring that it executed this programme in time. To do this, this movement needed to take place on several tracks. The first track was a regulatory one, meaning that all questions pertaining to the regulatory standards that had to be established had put in place. This was chiefly led by ICASA but there was also a great amount of collaboration between ICASA, the Broadcaster and the DoC on this.

The second track was that the DoC had to mobilise the manufacturing sector to produce the Set Top Boxes. The DoC could easily ask the four manufacturers who were currently dominant in the industry to produce the five million boxes needed and they would be produced quickly.  The problem however was the DoC needed to ensure which houses needed the boxes and which households were going to receive boxes. The greater question that was being asked was if this project could be used to revitalise the electronics industry and create jobs. Revitalising the electronics industry meant not just looking at the electronic box manufacturing industry, but looking at the whole value-chain to see if entrepreneurs in satellite dishes, aerials, installation equipment, cabling, et cetera, could be brought into the process. There was therefore a bit of a delay in the manufacturing because DoC was trying to double up the capacity of the industry (by raising the base of the industry from four main manufacturers to seven) and also capitalise on the opportunity for export. The matter had not yet gone to Cabinet but it was expected that it would be in the next three to four weeks. Since the matter had been to Cabinet before it was not expected that there would be many difficulties.

The third track was the launching of the digital programme from April 2012 to December 2013. This period was called the “dual-elimination” period in which everything must happen. The fourth track was that the public needed to made aware of the need to acquire a box. A vigorous public awareness campaign around the digital migration project was required. The fifth track was that because all these things happened in different centres in this family of institutions, they could only go ahead if they were all brought together and coordinated by a dedicated instrument, such as a project office. The DoC was therefore creating a specific structure that would be focused only on implementing this programme. The Minister noted that because the Committee wanted accountability for the money spent by the Department, things had to be done properly. The Department had to set up the structures, do job evaluations, justify, and advertise. All these processes were complete and the Department expected that by January/February 2012 the office would be fully functioning.

Ms Tsebe (ANC) referred to the Minister’s mention of a public awareness campaign for the digital migration project saying that in the rural areas, people did not know anything about such things. What was the role and status of the digital migration in rural areas where not enough had been done?

Ms W Newhoudt-Drunchen (ANC) was also concerned that the public was not aware of the digital migration programme. When would this information be going out to the public? Her constituency had been asking her who was going to be getting the boxes. Would people living on grants and people living with disabilities get boxes? The British Broadcasting Corporation (BBC) in the United Kingdom began its public awareness campaign way in advance of implementing its DTT programme.

Ms Sekese responded that preparations for the launch of DTT would begin in October and November this year for the launch to be in April 2012.

The Minister added that there had been a delay and setback on the communications campaign for the digital migration but it did intend on implementing a vigorous plan going forward.

Ms Tsebe said she did not understand why the DoC had asked for more funding from the National Treasury when it had actually under spent. 

Ms Tsebe asked which 15 community radio stations had been pre-inspected for the rollout for broadcasting infrastructure. What criteria had been used to select these 15 radio stations?

Ms Sekese responded that communities worked together to apply for a
licence with ICASA and that once this had been processed, the community radio would apply to the Department for funding for the infrastructure. The number of community radio stations approved to receive broadcasting infrastructure depended on how many had approached the government asking for this infrastructure. The number approved was therefore community-driven.

Ms Tsebe asked which of the eight municipalities would have their websites developed following internal approval by e-Cooperatives. What criteria had been used to select these eight municipalities?

Ms Tsebe asked if there was any role played by the National Youth Development Agency (NYDA) in developing skills education and training structures

Ms Sekese replied that the Department had consulted with the NYDA on this.

Ms R Morutoa (ANC) asked if the ICT had expanded on the existing partnership with key role players such as education, business and government. This would give one hope that there would be more graduates in the future.

Ms Ndabeni said that earlier on in the year, proper management of the SOEs under the DoC had been highlighted as a challenge. One reason that had been given for this was that the level of the persons that managed the SOEs was low. This could be an issue with the ICT Enterprise Development and SOE Oversight in that the Department dealt with big SOEs such as the SABC, ICASA, et cetera. For example, how would an employee of the DoC, who was on the level of a chief director, bring the CEO of the SABC into line?

The Minister replied that this was not how things worked in practice. The relationships between the SABC and Department were managed at several levels. The first-line relationship was between the SABC Board and the Minister. Then there was the relationship between the CEO and senior SABC officials, and the Director-General and senior officials of the DoC. Technical specialist support staff were being created in the new structure to support the intervention that the higher level must make. For example, if the SABC CEO was consulting with the DG of the DoC, it was not necessary for the DG to know every detailed aspect of the day to day movements of everything. Instead, she would call on a broadcasting specialist for information about broadcasting. Negotiations, counseling and managing were stratified at the upper levels of leadership in the DoC and the Ministry.

Ms Ndabeni asked for an explanation of the approved structure of the “Corporate Services” directorate? The diagram indicated that the there would be a chief financial officer (CFO) at the level of the chief director.

Ms Sekese responded that the Department had deliberated on whether a CFO was at the level of chief director or deputy director-general. The Department felt that because the technical capability of finances sat with the chief director that a CFO would be appointed to this position.

Ms Tsebe asked if the Department’s employees had been consulted about the “migration process” that would guide their migration to the new structure. Her experience with the SABC’s turn-around strategy had been that if this was not done then a “banana republic” would result. 

Ms Sekese replied that the Department would consult staff members once it had finalised the plans for the migration process.

Ms Tsebe asked how many females were in the existing structure of the DoC. If the DoC was employing additional staff for the new structure then it might consider employing females.

Ms Sekwele answered 2.29% of the Department’s employees were people with disabilities, and 38.4% were women. Thirty five females were employed in the Senior Management Service of the Department – this was made up of 30 Africans, 2 Coloureds, 1 Indian and 2 Whites.

Ms Tsebe asked what the costs associated with migration to the approved office structure, were?

Mr Zondi, referring to the migration to the new structure, asked at what point would the DoC have a functioning structure that was stable and could carry the DoC for the next five or ten years. What factors would mitigate stability in the DoC’s structure and when would stability be achieved?

The Minister responded that the Department had judged that the inherited structure was not conducive or appropriate to the kind of programme to be implemented. It had therefore motivated for a new type of structure. The essential difference was that the Department was not just adding on to an existing structure but it was re-tooling the Department in terms of certain key strategic outcomes. One of these components dealt with ICT development and SOE oversight. The structure for this was far more elaborate than what the Department had in the past. The reason for this was that in the past, the relationship between the SOEs and Department had been very loose, unstructured and uncoordinated. In most cases, the operational working relationship revolved around the SOEs interpreting what the policy positions and directions coming from the DoC were. The Department wanted to tighten this up as it took the view that the SOEs were the implementation apparatuses of the DoC. In this case, they had to work in very close harmony with the programmes that the DoC had defined because such programmes were aligned very centrally with the government’s programme. One of the key strategic initiatives in the programme was to build more effective and cohesive partnerships with industry. This had not been a dominant feature of the way the DoC had worked in the past. If the DoC were to get this relationship right, there were so many things that the government has stated, that would assist us in achieving. One of the central things that would find synergy in achieving the outcomes of government was the announcement by the President that 2011 must be a year for job creation. All of us had come to accept the truth that it was not the government that created jobs but rather the private sector. The role of government was to work with the private sector and provide a stable, regulatory, conducive environment in which the private sector could thrive. This meant working closely together, understanding what the policy requirements were, what the regulatory concessions were. The structure was therefore a very elaborate one which even put a Special Advisory Council in place.

Mr Zondi asked what the DoC aimed to achieve with all the MOUs it was signing. How would the benefits of these be brought to the people?

The Minister replied that the DoC’s relationship with countries was guided by three things. The first was that the DoC tried to stimulate greater inter-country trade. Secondly, the DoC tried to stimulate better political relations between countries. Thirdly, the DoC always looked for training and development and resource sharing opportunities with countries. In that way, the DoC tried to capacitate the departmental staff and raise their standards and enable them to understand how international ITC works. If the DoC went on a study tour to Egypt for example to see how Egypt had digistised the content of its museum for natural history, staff would return to South Africa with knowledge of how to do this.

Mr Buthelezi responded that the Department identified beneficial relationships with other African countries. This included helping other countries create jobs so as to limit the migration of foreigners to South Africa.

Ms W Newhoudt-Drunchen (ANC) said she was concerned with the slide that stated that “RICA Directives were amended to address shortcomings identified by law enforcement and ICT industry”. It was assumed that the RICA process was being completed. Would the Department amend the process and then go back to the public to inform them that they needed to do it again?

Ms Sekese responded that the amendments pertained to aligning RICA directives with new legislation. It would not be necessary to go back to the public on the RICA matter

Progress Report by the Department of Communication and Independent Communications Authority of South Africa (ICASA) on the Local Loop Unbundling Process
The Minister stated that there was a policy directive in place to call upon the regulator to implement plans to unbundle by November 2011. This directive had been in force for four years and work had been done in various strands by the regulator to try to achieve this. In its most recent engagement with ICASA, the Department had tried to establish whether ICASA would be ready to complete the unbundling process by November 2011. ICASA had informed the Department that the process would require considerably more time than this. The Department had set up a bilateral meeting with ICASA for the following week to get a clear and precise idea of the way forward. Only after this would the Department be able to present its views on the Local Loop Unbundling to the Committee.

Ms Ndabedi asked when the Minister would present a detailed report to the Committee.

The Minister replied that the Department would report back to the Committee within a fortnight.

Mr Van Den Berg said that it was so easy for the Department to keep coming back to the Committee to ask for more time but that this was not respectable. His idea was that the Department was the chief in this incident. The SOEs were quick to ask for more time but in the meantime South Africa was waiting and the process of job creation was now on hold because ICASA was not ready.

The Chairperson commented that while the Minister was the leader in this process, the Minister had a responsibility to consult with the stakeholders. If the country had already waited four years for ICASA to complete this process, then the country would not collapse if it had to wait an extra two weeks.

The meeting was adjourned.

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