Chairperson, it is my pleasure to introduce the Budget Vote debate on Communications on behalf of the ANC and the committee. Members from the ANC will speak on the specific entities linked to the Department of Communications, but I will focus specifically on the department itself.
The latest edition of the magazine African Communications carries a feature article by Arthur Goldstuck on the key trends in the ICT sector since last year. In it, he states:
While South Africa's telecoms sector experienced a number of earthquakes in 2009, 2010 seems set to bring the tsunami. Last year was breathtaking in the scope and scale of events in the industry. The divorce between Telkom and Vodacom; the collapse of the Bharti-MTN merger; the landing of the Seacom undersea cable; the first reduction ever in interconnect fee for calls between South African mobile operators; and the beginning of the roll-out of new fibre optic backbones across Africa means that nothing will ever be the same again.
He said this year will see the implications of all these events not only becoming clear but also transforming the market. What is interesting about Goldstuck's analysis is that the information and communications technologies tsunami that he speaks about has its origins almost entirely in initiatives launched by the private sector. It is almost as if government has had no role to play in the shaping of these trends and developments. But we know that this is not true.
A few examples will prove my case. In recent years this government has invested almost R5 billion for the provision of robust ICT infrastructure in preparation for the Fifa Soccer World Cup. The international broadcasting centre that the Minister spoke about is a massive, high-tech nerve centre that will service a 30 000 strong media contingent during the tournament. Sentech will offer a digital terrestrial service during the tournament. And the SABC has upgraded its redundant equipment with digital gear and will provide live coverage of all 64 games during the tournament.
The point I'm getting at is that there must be a constructive partnership between government, the private sector and other institutions in civil society if we are to accelerate the growth and development of the ICT sector. But this partnership must be premised on a set of clear principles.
For me these are, among others, firstly, transparency, openness and public accountability - both for government, civil society and the private sector. Secondly, there should be open channels of communication among these three sectors. Thirdly, we must advance the principle of cost effectiveness and efficiency operations. Lastly, there must be a proper balance between private and public interests.
I want to dwell briefly on the issue of balancing public and private interests, particularly the question of managing conflicts of interest. Even though we accept that the private sector is driven by profits, it also does serve the public good. So, for instance, we cannot deny the positive impact the mobile industry has had on our population, which includes the poor.
However, it is important that enterprises in the private sector, including its black economic component, should not abuse the transparency and openness of this government and attempt to manipulate tender processes in favour of some enterprises to the exclusion of others. [Applause.] In simple terms, then, industry is free to manage its interests as it deems fit, provided it does so ethically.
Similarly, public servants and public representatives must also not attempt to manipulate, either directly or indirectly, specific business transactions at any level of government in favour of themselves, their friends or families. [Applause.] Essentially, public servants and representatives should do what they are supposed to do: serve the public.
In this regard, the committee is pleased to report that in the Department of Communications 99,8% of the senior management - that is 85 out of 86 senior managers - have to date declared their interests and are compliant with the Public Service Code of Conduct. [Applause.] The single remaining person - I don't know who he or she is - has until the end of this month to comply, and I hope it is going to get done with the director-general. [Laughter.] This is a very positive development which we must applaud.
I want to stress that this is an important issue for the committee itself, particularly in the light of what happened at the SABC. The Auditor-General found last year that there were significant deficiencies in the corporation's supply chain management due to nonadherence to policies, directives and delegated authority by senior management.
In fact, the report states quite explicitly:
The various allegations raised regarding possible or perceived conflicts of interest is indicative of a lack of confidence that the procurement and provisioning system of the SABC is fair, equitable, transparent and competitive. This perception may be strengthened by the number and level of employees who do have other commercial interest and the nature of the businesses of the entities in which they have an interest. In this regard, the Auditor-General found that there were 1 465 SABC employees who had interests in companies or corporations. There was no central register of approval granted to the employees, which is an example of inadequate management of information. This is shocking, if not scandalous. It must be reaffirmed that even those working for the public broadcaster are public servants and should not engage in business activities that leave them conflicted. The committee is strongly of the view - and I see the chairperson of the board is here - that the board must conclude unfinished business in respect of the Auditor- General's report. [Applause.]
When one examines the situation at Sentech, a similarly disconcerting picture emerges. For instance, Sentech has acted outside its political mandate by not concluding an agreement with the Eastern African Submarine Cable System, EASSy, which was approved by this government, and instead entered into a landing rights agreement with Baharicom Development Company. I think this raises a very central issue of the political mandate: If the mandate of Cabinet is A, how is it that officials go into B? It is a serious question. Also, there are several examples that its staff recruitment practice is driven by considerations that might not be publicly justifiable.
However, in the absence of the Ministerial Task Team's report being made available to the committee, it is not possible at this stage to state conclusively there is whether or not a case of unethical conduct or practices that promote a conflict of interest in the company. But the committee has a gut feeling that the situation is not entirely satisfactory. Hence, we shall be calling on the newly appointed board to appear before us, preferably shortly.
Since the appointment of Minister Nyanda, Deputy Minister Pule and the new director-general, there has been a burst of energy and enthusiasm in terms of policy proposals that are coming through from the Ministry. That is a very positive development, because I think there was lethargy in the previous era.
The department's strategic plans for the year are more focused and the budget is better aligned to key priorities. [Applause.] I see that applause was engineered by the director-general. [Laughter.] There is no harm in officials also applauding their own work. [Interjections.] The department has also been much more responsive to the committee's request for additional information and further briefings.
On the question of mobile termination rates, I think the Minister has already indicated the successes there. If I can draw on military terminology from the days when the Minister was a soldier, I would say that the Ministry and Parliament launched a pincer operation, which ensured that interconnection rates were reduced to 89 cents last month.
Last week, as we have heard already, the Independent Communications Authority of South Africa, Icasa, issued proposals for the further regulation of interconnection rates over the next two years. It suggested that these rates be reduced according to a glide path, with an initial reduction to 65 cents in July this year, 50 cents in July next year, and 40 cents in July 2012. Fixed-line termination rates are also to be reduced. These are very positive developments.
As we applaud or recognise these achievements, we must also be mindful of a specific departmental weakness. This has been meticulously highlighted by the Public Service Commission's recent evaluation of the performance of the department against nine constitutional values and principles governing public administration.
With regard to its performance and compliance report, the Public Service Commission, PSC, gave a 39% rating to the department when it was under the leadership of the former director-general - who, incidentally, is now a member of Cope. [Laughter.] That is factually correct, Chairperson, I am not misleading the House.
This 39% is categorised by the PSC as poor performance against most of the standards. Now let us look at the last appearance. The department received an "excellent" and "good" rating respectively for fairness in decision- making processes and maintaining adequate financial controls over departmental programmes. But it received a poor performance rating in respect of the following ... [Time expired.] [Applause.]