National Treasury is keeping mum over claims that it has recommended the suspension of South Africa\u2019s controversial set-top box production.<\/p>\n
Set-top boxes (STBs) decode digital signals for analogue television sets and government plans on subsidising five million poorer households as part of a broadcast migration process.<\/p>\n
Last year, the Universal Service and Access Agency of South Africa (Usaasa) appointed 27 service providers in a multi-billion rand deal for the supply of equipment such as set-top boxes.<\/p>\n
Production of the boxes, though, has already hit a snag this year.<\/p>\n
Usaasa last week said it has suspended production amid Communication Minister Faith Muthambi\u2019s challenge of a Supreme Court of Appeal (SCA) ruling over the encryption of STBs.<\/p>\n
But the STB tender risks further complications as Muthambi says, in a speech posted on her department\u2019s website, that a Treasury probe has also recommended a suspension of the production amid issues over the tender process and its costs.<\/p>\n
Muthambi, in October last year, requested that Treasury probe the procurement of the set-top box tender. And, she now says the findings of Treasury\u2019s report have been concluded.<\/p>\n
\u201cThe report recommended that the production process of STBs be stopped with immediate effect and a process that will lead to the integrity and value for money be initiated,\u201d said Muthambi in a copy of a speech published on her department\u2019s website.<\/p>\n
Muthambi further said the recommendation from Treasury was that the “process may be faced with the legal challenge and that with the current situation, the programme will not realise its objective of providing five million STB[s] in consideration of the current funding\u201d.<\/p>\n
In the speech – which Muthambi\u2019s office claims she read to Parliament last week – the Communications Minister said the probe found that Usaasa allegedly contravened its own supply chain management policy in an appointment of Ernst and Young (EY) by not following a competitive bid.<\/p>\n
Muthambi said the probe has further raised issues such as the appointment of companies part of the bid evaluation committee, EY management costs, and the evaluation and adjudication of bids.<\/p>\n
Other issues revolve around pricing of the STBs, said Muthambi in the speech document.<\/p>\n
\u201cWhen allocating supply volumes by Usaasa, companies that quoted lowest prices were not granted volumes. Instead prices were negotiated upwards and not downwards leaving the cost of set-top-boxes procured at 37% above the market price at retail. This is in contravention of the SCM (Supply Chain Management) and PFMA (Public Finance Management Act) provisions for \u2018value for money\u2019,\u201d said Muthambi.<\/p>\n
\u201cThe National Treasury revealed that Usaasa had already received an amount of R1.6bn in their bank account. Usaasa has earned interest amounting to R127m. The report further reveal[s] that Usaasa spent R10.2m out of the interest earned which National Treasury indicates that it is prohibited to spend interest earned from subsidy funding without obtaining its permission which Usaasa did not obtain,\u201d Muthambi added.<\/p>\n
Meanwhile, Treasury, its office of the chief procurement officer and its office of the accountant general have refused to comment on Muthambi\u2019s claims about the findings of the probe.<\/p>\n
\u201cTheir response is that they will not respond and that issues related to this should be forwarded to department of communications,\u201d Treasury spokesperson Xolisa Dodo told Fin24 in an email.<\/p>\n
Fin24 asked Muthambi\u2019s office if she would publicly release the full probe, but her spokesperson said she – together with relevant players – are still studying the document.<\/p>\n
\u201cThe department has received the report and recommendations from National Treasury, and is in consultations with Usaasa and the Department of Telecommunications and Postal Services (which provides an oversight on Usaasa),\u201d Mish Molakeng, ministry of communications spokesperson, told Fin24.<\/p>\n
\u201cIt is only after these consultations that the department will be able to make further announcements on the next steps to be followed\u201d, Molakeng told Fin24.<\/p>\n
Complicating matters is that while Muthambi\u2019s department runs South Africa\u2019s digital migration process, Usaasa reports to Telecommunications and Postal Services Minister Siyabonga Cwele.<\/p>\n
Usaasa told Fin24 late last week that it \u201ccannot confirm or deny the information\u201d of the claims contained in Muthambi\u2019s speech about the probe.<\/p>\n
\u201cThe DoC (department of communication) has recently handed the investigation report to Usaasa and DTPS [Department of Telecommunications and Postal Services],\u201d Usaasa CEO Lumko Mtimde told Fin24.<\/p>\n
\u201cUsaasa is studying the report and will decide on the way forward once the consideration is concluded and the board had deliberated on the report,\u201d Mtimde said.<\/p>\n
Meanwhile, spokesperson for the department of telecommunications and postal services, Siya Qoza, told Fin24 late last week that the ministry had received the findings of the probe and was studying it.<\/p>\n
DA MP Marian Shinn on Wednesday also called on Muthambi to immediately release the findings of the probe.<\/p>\n
\u201cAt last week\u2019s joint parliamentary committee hearing into the status of the Broadcast Digital Migration programme, Minister Muthambi – who is the custodian of the programme, neglected to mention in her presentation that the enquiry had been instigated and had finished its work,\u201d said Shinn in a statement on Tuesday.<\/p>\n
\u201cIn response to a question from me she admitted that the report had been received and that relevant action was still being considered. She promised to make the report public when the decisions on appropriate action had been taken.\u201d<\/p>\n
\u201cI now call on her to make the full report immediately available,\u201d she said.<\/p>\n
Amid these disputes, MPs in Parliament last week criticised Muthambi for the slow march to digital migration in South Africa.<\/p>\n
South Africa missed an International Telecommunication Union (ITU) deadline in June last year to switch over to digital migration.<\/p>\n
But in a statement last week, the communications minister\u2019s office said that the \u201cBroadcasting Digital Migration Project is well on track\u201d with over 30 000 households in the Northern Cape, Free State, Mpumalanga and Limpopo having registered with the South African Post Office to receive set-top boxes.<\/p>\n
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