SITA, USAASA & USAF 2020/21 Annual Performance Plans; with Deputy Minister

Meeting report

The Chairperson welcomed Ms Pinky Kekana, Deputy Minister of Communications, delegates from the Department, and Members of the Committee.

State Information Technology Agency: Annual Performance Plan

Mr Luvuyo Keyise, Executive Caretaker: State Information Technology Agency (SITA), said the entity aimed to support the government through scalable digital platforms that delivered great service to citizens. It would establish a Digital Government Platform Ecosystem (DGPE), which was essential for government transformation. The DGPE would provide shared digital infrastructure, services and applications that could accelerate the development and delivery of proofs of concept, new digital services and the fundamental reinvention of existing services in an ecosystem and constituent-centric fashion. The DGPE, through reuse of components, would reduce the investments in software licensing and the need for information technology (IT) staff to support multiple systems that deliver similar solutions.

SITA would establish a security operational centre capability of ensuring that government and citizens were able to transact, communicate and interface within an environment that was secure and safe. It would continue to leverage economies of scale and digitise the procurement service offering, to offset the challenges that lead to longer turnaround times and non-compliance in the procurement value chain. The Agency would also implement programmes aimed at developing and empowering small, medium and micro enterprises (SMMEs).

The procurement and industry transformation aims to advance transformation of the information communication technology (ICT) sector to stimulate economic growth, the development of local ICT content, and to radically transform procurement capability towards the reduction of unemployment and poverty alleviation, supporting skills development and promoting fair, equitable, transparent and cost-effective procurement services. 

SITA aims to reshape the supply chain through ICT economic transformation. The baseline for this was 10% of black SMME suppliers in SITA. This was expected to increase to 50% by 2023.
 

Discussion

Mr M Hendricks (Al Jama-ah) said he was pleased that there was now a cloud facility which would allow Parliament to make use of 5G. He was disappointed that the Joint Committee on Intelligence and the Special Investigating Unit (SIU) had not been assisted by SITA with regard to artificial intelligence (AI), robotics and the “Internet of Things.” Other Parliaments around the world were making use of these. SITA had a vision to become like Microsoft, but if it did not provide Parliament with these basic amenities of the Fourth Industrial Revolution, Parliament would be far behind the rest. He asked for a progress report on this. 

Ms P Faku (ANC) said that the Committee had been shocked when the administrators were appointed, but the presentation had shown that the repurposing of SITA was promising. Government had been talking about localisation for some time, so the focus from SITA on localisation of procurement was what the Committee wanted to see in the sector. The issue of contracting was a serious problem SITA had had in the past, where Departments would not pay timorously. The service level agreement (SLA) seems like it would manage this problem better, but SITA must also offer their services in a timely manner. Did SITA have the necessary skills to establish a cybersecurity centre? 

Ms P van Damme (DA) asked what the findings had been from the ongoing SIU investigation following SITA not procuring the cybersecurity centre services for the Gauteng government. What had gone wrong with that specific procurement? Since the administrator had been in office since December 2019, had there been any other questionable tenders that needed to be looked into? The presentation spoke a lot about innovation, but there needed to be a greater focus on the short-term, considering the lockdown that South Africa would be under for a while. How did SITA plan to contribute to the ‘new normal’? How would people in townships and informal settlements gain access to the things needed to work from home?

Ms N Kubheka (ANC) applauded SITA for the bursaries provided to Grade 12 learners, which the Committee had encouraged on the side of ICT, as well as the 10% of SMMEs. According to the annual performance plan (APP), SITA was on the right track to reach its targets. Vacancies needed to be filled, as this was critical.

Mr V Pambo (EFF) asked for clarity on how SITA came to be under administration? The legality of appointing the administrator was one part, but the Committee did not know how the Minister came to make the decision to put SITA under administration. It was extremely worrying that the Committee was seeking clarity after the fact.  How did SITA plan for digital transformation when the Home Affairs systems kept on crashing?

Mr L Molala (ANC) said that SITA had reported, in a diplomatic way, that government departments were not buying SITA solutions and e-Government services. He asked for specifics on where SITA had experienced these challenges. SITA was still at the planning stage regarding controls and securities, but it did not seem that the current platform being used was under SITA control. This meant it was still far from reaching the target of the end of the year. He hoped SITA would reach this target sooner so that people may be connected to a more secure solution. He asked the Deputy Minister to clarify what the role of the administrator was. Government departments owed SITA about R500 million -- how far was the administrator in recouping this money?

SITA’s Response

Deputy Minister Kekana asked the Committee if the Department may respond in writing, detailing the role of the administrator and reason for his appointment.

The Chairperson asked if the Committee accepted this request.

Ms Faku said that Members of the Committee from previous years would remember that Ms Stella Ndabeni-Abrahams, Minister of Communications, had issued a statement on the appointment of the administrator. The Committee had also been briefed on the matter.

Ms Faku and Ms Van Damme agreed that Deputy Minister Kekana may respond in writing.

Mr Keyise said that the media had been questioning SITA for being unable to procure the Gauteng Department tender for cybersecurity services, yet it claimed to be developing cybersecurity services. He confirmed that SITA was cooperating fully with the SIU. He had provided statements to the SIU and ensured all information regarding the contract commencement and details of SITAs involvement was provided. He said that SITA did not play a role in the matter that had resulted in the SIU investigation.

Mr Keyise said he was not only looking at questionable procurement, but also at what had been procured by the Department and if it was being utilised. SITA would not spend unnecessary time developing new solutions while government spends millions of rands buying things that were not being utilised.  He had gone through everything that had been procured and determined why it was procured, if it was being utilised and, if it was not, why it was not being utilised. He had put a stop to this in order to manage the expenditure.

SITA had developed 55 solutions, one being an e-recruitment solution that was not being used, yet it was developed three years ago. During COVID19, people needed to be recruited, yet there was a solution gathering dust at SITA and Departments were not utilising it. SITA had approached the Department of Public Service and Administration (DPSA) to ensure that this solution was deployed across government. This was an example of what SITA was doing in COVID-19-related work.

SITA had also developed its own video conference calling platform that had never been hacked, which it would like to make available to Parliament. SITA would invest in the technical capabilities of the open source solution so that it could have the scale to be used by all other entities of the state. The State Security Agency (SSA) and other related security clusters had approved it. The solution which the National Command Council (NCC) used, was run by a SITA cloud facility. The process of government using the solutions developed by SITA was what needed to be discussed. The mandate of the Department was to push the use of e-governance platforms, but there was no legislative mandate to enforce the use of these solutions by other departments. SITA would provide the Committee with a list of assets that were ready to be used by government departments. He requested that the Committee help the Department in ensuring that government departments used the developed solutions from SITA.

SITA had encouraged Home Affairs to modernise its system. Government departments took IT solutions and broke them down into multiple contracts that were given to the private sector, instead of giving them to SITA. SITA could be an integrator of government that could provide end-to-end accountability and responsibility. The issues with the current solutions at Home Affairs were due to the local network of Home Affairs, which was managed by a private sector company. SITA had given Home Affairs information on how to improve this. It could help Home Affairs to manage its own local networks as well as its service provider. That was the main issue with Home Affairs. SITA continued to engage with the Acting Director General (ADG) of the Department of Home Affairs to possibly assist it with the delivery of its services.

SITA did need skills and capabilities to provide services to state-owned companies (SOCs). In the past, SITA had run tenders for SOCs and cybersecurity services. SITA had enough skills for the current SOC services within SITA, but, it was in the process of beefing up its internal skills. Security needed to be managed along with assistance from the orivate sector, but the core staff and data should remain within SITA. Along with beefing up skills, the Department was looking for strategic partnerships with key South African IT security firms in assisting with the broadening of government security.

A major problem SITA had with meeting the requirements of SLAs with government departments was the managing and issuing of tenders. The management capability within supply chain management (SCM) was sitting at zero. The eight senior management positions were zero. There were too many “acting” people, but SITA was now beefing up the technical capability of the Department. A Chief Procurement Officer had been appointed, who had been able to do the recruitment of the second layer of management. Technology and solutions were needed to manage tender processes. Government had invested hundreds of millions on e-procurement solutions that were not working. Mr Keyise had made alternative procurement solutions that Government already had licences for. It would be implemented at the end of June.

There were over 425 backlog tenders in January 2020. Backlog tenders were contracts that had been pending for more than two years. This had been reduced to 184 contracts. By the end of June, all tender backlog issues should be resolved through reforms, and additional resources that were being put in place.

There were many locally developed solutions that had been found at the Council for Scientific and Industrial Research (CSIR). SITA had cognitive computing capabilities, which involved artificial intelligence (AI) robotic skills. AI skills were nothing new, but the challenge was implementing robotics in governance. CSIR and SITA had the capability to automate simple workflows using robotics.
 

SITA could assist Government with business continuity through broadband infrastructure. About 80% of government’s broadband solutions utilised old infrastructure that was less than 5mbps. Thus, a base of broadband infrastructure needed to be created through SITA and partners.
 

SITA had proposed making virtual and e-learning solutions available to departments using SITA’s existing solutions, as well as solutions from other industry players.

Vacancies were being filled. One issue with the SITA structure was that below the executive level, employees were permanent, irrespective of their performance. The Department had thus started to change all the contracts below the executive level to five-year contracts. All positions advertised were five-year contracts, and this would ensure better performance. This would change the culture at SITA, as the reality was that 80% of the employees had been employed there for over 20 years, but service delivery was horrible. Changing chief executive officers (CEOs) and other executives did not solve problems if the rest of the people delivering services were not performing.

Follow-up Discussion

Ms Van Damme said that she felt SITA was in good hands with Mr Keyise. She asked how many contracts had been terminated and what they were, so that the Committee could do oversight as well. She encouraged Mr Keyise to keep his energy and to speak truth to power.

Ms Kubheka asked how many Government departments were using SITA’s services. Were all the departments responding negatively to SITA’s service? Had there been positive feedback regarding the outstanding payments?

Mr Molala asked if money had been recouped by SITA. What solutions did SITA have that were not being utilised? Were the solutions bad and therefore undesirable?
 

SITA’s response

Mr Keyise said that one contract that had been terminated was the G-commerce contract. This was a tender that was supposed to help SITA establish an e-procurement solution. Government had spent about R300 million on this solution, and it did not work. He had engaged with the service provider to retrieve some value and prevent this from being wasteful expenditure. The licenses bought through this tender would be used for an alternative SITA e-procurement solution. An independent company had been hired to re-evaluate the contracts, the value received and payments made so that the Department may recoup this money.

SITA’s solutions work was not undesirable to government departments. An example was the e-recruitment solution, which had been approved by the Chief Information Officer of the DPSA. SITA was now working with the DPSA Director General (DG) on the G-tech console to propose that this solution was implemented across government. The Department of Communications and Digital Technology (DCDT) did not have the legislative mandate to enforce the use of its solutions.

Where Departments showed an interest in SITA solutions, they were unable to embark on solutions, as the current procurement and management models were not assisting in this regard. SITA had approached Treasury to help roll-out existing solutions to all the entities in government.

SITA had approached Treasury to potentially own the ‘track and trace’ solution which Home Affairs was using. There was a demand for this solution among other departments, so if SITA owned it, it could customise the solution for other departments. If SITA owned IT and internet protocol (IP) solutions, it could customise them for Departments at a fraction of the cost of them procuring these solutions.

There were no horrible solutions that had been developed -- it was more the case of having a great idea that was not well thought out. Such solutions could be improved.

SITA’s challenge was that departments did not pay enough money. Thus, when the last financial year closed, it was owed more than R540 million. An example of this was the South African Police Service (SAPS), which started paying SITA only in the last quarter of the year but did not complete payment, resulting in SITA chasing SAPS for the money it owed from the previous financial year. Out of the R540 million owed, more than R100 million had been recovered. R400 million was a debt that was less than 90 days, so it was guaranteed it would be recovered. Mr Keyise had sent letters to DGs for money that they needed to pay to SITA.. By the end of May, all clients that had received a service from SITA must pay their debt. SITA was ensuring that SLAs were signed -- 85% of the SLAs for the financial year had been signed and the remainder were being collected.

Follow-up Discussion

Mr Pambo asked why SITA had not moved Parliament’s virtual meetings to the solution it hadcreated. Money was being used on platforms that were not state-owned, such as Zoom, Microsoft Teams and others. The existing systems needed to be put into use during the time of COVID-9. Government should have the appetite to use the systems that existed and save money. Had the Department engaged with other departments and Parliament with regard to using SITA video conferencing calling? If SITA had engaged in this regard and there were challenges, what were these challenges? What was SITA’s response? If SITA had not approached departments in this regard, why not? It was wasteful to allow systems to sit and gather dust.

Ms S Xego (ANC) asked if SITA would be targeting SMMEs who could help children with e-learning programmes in the Department of Education (DOE).  Was SITA’s risk strategy responding to the challenges created by COVID-19? The need for technology at this time was critical, so how did SITA plan to assist areas that did not have network coverage, especially the rural areas?

Ms Kubheka asked for clarity on how many Departments were utilising SITAs solutions?

Ms Faku applauded the Administrator for being passionate and knowledgeable about his work at SITA. She encouraged him to transfer his knowledge to SITA before leaving the entity. SITA should partner with universities to identify rare skills and afford students opportunities to train outside of South Africa. The Department, as well as the Independent Communications Authority of South Africa (ICASA) and SITA were all developing e-learning solutions -- was there a synergy between all three, despite being independent?

SITA’s response

Mr Keyise said that almost all government departments used SITA’s services. The challenge faced was that departments had been outsourcing services and were now returning to SITA for services.

He said that SITA had a 70% vacancy rate in senior leadership. Thus, most of these positions would be filled by the end his administration with people who had worked and gained skills from him. This would ensure that there was a continuity in services and that the strategy did not change before it had been implemented.

Partnering with universities was part of SITA’s innovation stream. There was no partnership with institutions such as the CSIR, which does much of the research on robotics and AI. The issue was that the current procurement model was limited by published tenders. Treasury was being engaged on this matter.

The basics for COVID19 was seeing that there was a better network infrastructure across the district municipal level. There was a synergy between ICASA, SITA and the Department to ensure that regulations around COVID-19 were followed.

SITA had engaged with the DOE on e-learning solutions to ensure that children were provided with better services, especially children in disadvantaged institutions. Basic instruments such as computers and tablets were needed, as well as access to websites. The Department had looked into making learning websites free or more cost effective. SITA was working with the Department and Treasury to ensure that in rural areas there was at least one device per child. 

There was a deficit in ICT skills outside of the metros. SITA had met with the South African Local Government Association (SALGA) and the Department of Cooperative Governance and Traditional Affairs (COGTA) to provide them with advisory services that would include implementation services when required. This would help with the COVID-19 response.

SITA had presented all its existing solutions to the National Communications Centre (NCC) and received its approval. It had also engaged with the IT unit of Parliament regarding existing solutions relevant to Parliament. Some departments had bought licences for Microsoft Teams and similar programmes. SITA’s role was to secure these platforms, as money had already been spent on licences. It had engaged with industries to make some of their solutions free for 90-day periods and some even up to 180 days, and this had been extended to Parliament.

Deputy Minister’s response

Deputy Minister Kekana said integration and collaboration with the Department and its entities to provide virtual learning with other platforms, was being created. The South African Broadcasting Corporation (SABC) was a partner as well, and had launched an education channel. In deep rural areas, if a family had a television set or a Set-top Box (STB), learners would have access to the education channel that was running.
 

With SITA’s repurposing, it was trying to deal with the issue of a trust deficit. The recruitment drive was to ensure that people with the requisite skills were appointed to help SITA drive the fourth industrial revolution (4IR). Support from the Committee on these matters was of critical importance.

The Chairperson said the Members of the Committee commended the work of SITA. It would support SITA in driving the use of their existing solutions. Regarding the SIU investigation, SITA may not have been involved and should address this point so that the Committee may perform its oversight responsibility. He asked for feedback from other departments and committees that were trialing SITA solutions. Overall, it had been shown that SITA was beginning to turn the corner.

Universal Service and Access Agency of South Africa (USAASA): APP

Mr Basil Ford, Executive Caretaker: USAASA, said the DCDT aimed to increase access to secure digital infrastructure, enabling policies and strategies for digital transformation, a transformed digital society, and to improve locally developed content, applications and services. USAASA had responded by the facilitation of digital migration and broadband connectivity, the development of market intelligence, and an understanding of universal access and universal service trends and needs. It was also involved in research and development of viable alternatives to achieving universal access and universal service that reflect the current and future technology.

USAASA had formed partnership with organs of state established to provide and to monitor broadband connectivity roll out of broadband connections per USAF targets with five years.

Universal Service and Access Fund (USAF): APP

Mr Ford said USAF aimed to broaden access to broadcast digital services and to increase access to broadband in under-serviced areas. Between 2015/16 and 2018/19, 511 368 households qualified for broadcast digital services. By 2020/21, 860 000 subsidised set-top-box (STB) kits would be installed for qualifying households, and there would be the implementation of a voucher system for DTV for identified indigent households.
 

Discussion

Ms Van Damme said that it was great to give out STBs, but part of the mandate was to find a new model for digital migration. Since the start of the digital migration process, technology had moved on -- would a new process need to start? The STBs were costing about R56 million to store per year -- would this not be wasteful expenditure down the line? How would it be rationalized, if the process had to be started afresh? In other countries, being in lockdown and working/schooling from home was not much of a problem, as people had access to the internet. This was a time that showed how the Government had failed South Africa. What was the short-term plan to help people have better access to the internet throughout the lockdown?  She asked for a total figure covering the costs of the STBs and storage to-date? What was the envisaged cost for the new digital migration process?

Ms Faku said the Committee was happy to see progress with the installation of the STBs. When was the SLA going to be finalised between Sentech and the project management of USAASA? Would people who were not subsidised be able to purchase an antenna and connect it to a TV set in order to migrate?

 

USAASA and USAF responses

Mr Ford stated that the priority was to clear the STBs from South African Post Office (SAPO) warehouses this year. There was a new model for migrating the remaining indigent households to the digital age. The new model worked around a voucher system that could be extended to Integrated Digital TVs (IDTV).

He asked the Committee if he could respond in writing with the total figure for the storage of the STBs, as there were a number of figures that were associated with this procurement. The storage costs were around R5 million, and not R56 million mentioned by Ms Van Damme.

Early in 2020, Minister Ndabeni-Abrahams had met with the original design manufacturers (ODMs). The Department had also looked at the STBs and discovered that those that had previously been specified were over-specified. The STB had functionalities that were not necessary, which resulted in its cost being significantly higher than it should be. By downgrading the specifications of the STB, it had brought the price of the STB down to about R250. For people who were not subsidised but had an analog TV, they could buy a cheaper STB at the retail level.

Newer TVs that had been sold over the last five-years already had a DVT2 tuner installed, but it could catch the DVT signal only with an aerial. The DCDT had therefore asked the ODM to make aerials available. The current supplier of the aerials was Ellies. The Department would have a discussion with Ellies to make these aerials available at the retail level. The aerials should not be too expensive. On the Direct-to-Home (DTH) side, a dish would need to be installed, and a DTH TV with an STB. The Sentech DVT signal covered around 80% of the country, so it should be a fairly small minority that would require a DTH and STB kit. The DTH kit needed an installer, as the dish had to be installed mainly on a rooftop. It was not easy for a homeowner to install one themself.

The SLA with Sentech was being worked on, and was projected to be concluded by 29 May. The Department was awaiting a deviation being approved by National Treasury to finalise the SLA. The SLA would cover the project management of the entire installation, which includes the appointment and management of installers, and quality assurance before installers were paid. Previously, installers were paid, and the installation was poor or did not work. Post-installation support was also included, so this new process was very important. The Department was looking into the cost to the beneficiary to call the call-centre for post-installation support.

Minister Kekana said that the Department would follow-up on Parliamentary questions. Storage for the STB was costing R5.1 million per month to SAPO, which was about R60 million per annum. The reason the Department wanted Sentech to move swiftly on the matter was that it had the capacity. The Acting Minister was prioritising Sentech and USAASA.
 

Follow-up Discussion

Ms Kubheka asked if there was a plan to attend to STBs that were not working in Mamafubedu? The third quarter plan was to install 800 000 STBs -- was it possible to complete that many installations within that period, or was it an estimation? What was the plan for the funds being paid to SAPO for the storage of the STBs?

Ms Faku said that the administrators had had limited time since they started their administration, and there was much work to be done and targets that needed to be achieved. However, R5 million per month was too much money to pay for the storage of STBs. The timeframes for the STBs needed to be followed strictly. COVID-19 provided a challenge to the progress of the STB installations, so the Department should provide a monthly report regarding the progress. Despite this, the Committee appreciated the work being done and extended its support to USAASA.

The Chairperson asked what database the Department used to identify indigent households for Integrated Digital Television (IDTV). Previously, an impression had been created that a Memorandum of Understanding (MoU) had been signed with Sentech’s project management. The understanding was that by the end of this year, there would be great progress. Extending this to next year made this issue seem it would be on the cards forever. What were the challenges, other than the approval from National Treasury, and how were these issues being resolved?
 

USAASA and USAF response

Deputy Minister Kekana said that the biggest obstacle to STB progress was the delay in appointing installers. About R72 million had been lost to storage, as there had been little progress with installation. Sentech’s technical capacity would therefore help to deal with this issue. It had been agreed that this process needed to be expedited. The reality was that the STBs may become obsolete if the Department did not act soon. 

In the area of Mamafubedu, the STBs had problems and the people could not watch TV. Paul Roux and Rosendal in the Free State also had issues with the signal and STBs. There were a number of explanations for this, such as Sentech switching off the signal. The USAASA still needed to meet with Sentech to deal with this matter.

Mr Ford said there was an agreement with SAPO, that STBs that did not work could be returned to SAPO and exchanged for one that was working. Although this intervention existed, it underlined the need for the call centre support. Sometimes the STBs did not work because the wrong buttons were inadvertently pressed, or something of that nature. In such a case, the STB was not broken and the problem could be resolved with the help of the call centre. It would be able to verify if a STB was not working before it was returned to SAPO, and this would prevent a delay at SAPO, and no installation would be needed.
He said it was possible to install the 860 000 STBs within the third quarter if the registrations for the STBs were accelerated. Over the past five years, SAPO had registered one million beneficiaries, as it was a reactive process. The Department advertises the registration of STBs, but it happens on a random basis. It was unknown who would register and where, which resulted in sporadic installations. USAASA was trying to move to a process where beneficiaries were proactively registered. It aimed to target areas that had been identified for STB, and rollout installation at once. This had also had an impact on installation costs, as installers would have to travel to one area, and the next area was 10-15kms away. The petrol costs had to be remunerated. If the installations were clustered, this would result in a quicker rollout and reduced cost.

The Department had a planned schedule to do an analog switch off, so USAASA needed to coordinate between the Department and the cluster of STB installations. This would be done once the key systems, such as clustering and registration, had been understood, which would allow a scale up of installations. Local installers, who tended not to be accredited, should be accredited to increase the local installer base from ten to 15-fold. This would also accelerate the progress of the STB installation.

USAASA had a system in place that could deal with STBs that were not working. This was in partnership with SAPO. It was agreed that so much money should not be spent on STB storage. However, STBs needed to be stored in a secure environment due to their value. Cheap warehouses that were unsecured and not weatherproof would result in damaged and stolen STBs. The Department required a monthly report on the STB installations from Sentech, indicating the targets reached. Roughly, 1 500 installations a day were expected from the second quarter.

SAPO’s database was connected to the SASSA database which was used to determine the eligibility of households for STB. The database provides information on whether a beneficiary was a South African citizen, earned below a specific household threshold, and the correct address. This was also how a household was identified as indigent.

The previous MoU was to establish the cooperation between both parties, but an SLA was still needed to determine the roles, responsibilities, penalties for service not delivered and remedies for potential challenges. An SLA was enforceable, whereas an MoU was not enforceable.

A lot of cooperation was required between the DCDT and the Department of Basic Education (DBE) in respect of the IDTV database. The DBE would provide a list of Grade 12 students. There was a reliance on the DBE to provide this information which the DCDT could run through the SAPO database to verify the household the learner belonged to, and if that household was indigent. If the household qualified for a STB and did not already have one, then an STB needed to be installed. If they did not have a TV, then an IDTV needed to be installed.

The IDTV was a fairly simple TV -- not a smart TV. It was a 42-inch LED TV with a DVT2 tuner. It would be packaged with a digital terrestrial television (DTT) antenna for areas where there was a DTT signal. Where there was no DTT signal, the Department would provide DTH detailers, and detach kits from existing stock.

Closing Remarks

The Chairperson said that remaining questions around DTT would be discussed in subsequent meetings. The Committee wanted to see faster implementation, as STBs could not be discussed forever, especially when resources were allocated and a clear schedule existed.

The meeting was adjourned.