SABC, Universal Access Agency SA; National Electronic Media Institute SA Strategic Plans and Budget 2010

Meeting report

Introduction by SABC Board chairperson
Dr Ben Ngubane, Chairperson of the SABC Board, said that the Board had started its work with an introductory handover meeting on 13 January 2010. Since then it had established committees of the Board and developed clear corporate goals which would inform the strategy roadmap.

The Board adopted a set of corporate goals to guide strategy development in four frameworks:
▪ Auditor General of South Africa (AGSA) Report and Capacity crisis
The SABC must addressed all outstanding issues, delegate responsibility and set performance timelines and monitored and tracked the ‘clean up’ process. For the capacity crisis it would ensure that there was a competent and professional leadership cadre by 30 June 2010. There would be a complete skills audit by 30 March 2010, a complete strategy-based structure by 30 April 2010 and it would implement a new structure in a phased responsible manner in consultation with all parties concerned.

▪ Governance and Finance
The SABC would create an effective performance management system. There would be adherence to performance-based contracts which required accountability and consequences for non-delivery. It would also ensure an appropriate risk management system for SABC with the emphasis on procurement, including SABC archives. It terms of finance the SABC would develop and approve an appropriate remuneration and reward system. Financial targets needed to exceed government guarantee thresholds to take account of servicing the debt and manage liquidity. The SABC would create an effective performance management system by 30 June 2010, which would review and amend existing contracts.

▪ Operations
There would be consistent and demonstrable improvement in the quality of and demand for SABC programming. It needed to optimise audiences and commercial revenues. There would be a focus on SABC’s primary social contributions, news, sports and locally created content and appropriate foreign programming. The SABC would be focusing on coverage of the 2010 FIFA World Cup and 2011 Local Government Elections. There would also be focus on the Digital Terrestrial Television (DTT) migration.

▪ SABC stakeholders
The SABC would re-establish relationships of trust and confidence with all stakeholders and rebuild staff morale.

South African Broadcasting Corporation (SABC) Corporate Plan MTEF 2010-2011 & AGSA Report
Mr Solly Mokoetle, Chief Executive Officer: SABC presented the Committee with the SABC’s Corporate Plan. Its mandate as a public broadcaster was embedded in legislation as well as regulations, policies, codes of conducts and licence conditions. In terms of it Legislative Charter, the SABC was charged with meeting the broadcasting needs of all South Africans. It was obliged to ensure that there was access to all citizens and that these citizens were informed, educated and entertained. It would need to reflect both the unity and diverse culture and multilingual nature of South Africa and all of its cultures and religions to audiences. In executing its mandate the SABC was also guided by SABC corporate goals; Public Finance Management Act (PFMA); Companies Act; Shareholder Compact and Materiality Framework; and King Report on Corporate Governance.

Over the past 24 months the SABC had faced a severe crisis characterised by the lack of leadership, breakdown of governance structures and inadequate executive capacity which resulted in the Corporation posting a R190 million loss before income tax for the year ending 31 March 2009. In an effort to contain and minimise the crisis the Minister of Communications appointed an interim Board to stabilise the SABC. Parliament commissioned the Auditor-General to conduct an investigation into allegations of financial irregularities and other mismanagement. Despite the austerity measures introduced by the Interim Board the SABC continued to experience liquidity challenges and was subsequently granted a R1, 473 billion Government Guarantee. The SABC’s strategic thrust for the MTEF period would focus on implementing a turnaround strategy plan which would seek to build on the austerity implemented by the Interim Board. However, long-term success of the turnaround strategy would not be realised without fundamentally reviewing and changing some of the policies and legislative framework for public broadcasting and the operation model of the corporation.

The Board had adopted a three-phase turnaround strategy approach for the Corporation:
▪ The first phase was ‘Stabilise’. The core focus of the turnaround strategy for the financial year 2010/11 was to stabilise the SABC as a going concern. This phase aimed to ensure that the Corporation met its public mandate whilst complying with the Government Guarantee conditions.
▪ The second phase was ‘Rebuild’. The rebuild phase would be concentrated in 2011/12. The key focus areas would be developing and implementing a new organisation structure and operating model.
▪ The third phase was ‘Sustain’. The thrust of the Corporation’s turnaround strategy in 2012/13 was sustainability. This phase aimed to ensure that the SABC would have in place a sustainable public service broadcasting model for the future.

The SABC’s core business strategy for 2010/11 was stabilising the liquidity of the Corporation. Concurrently, the SABC would have to be cognisant of predictions that 2010 would fundamentally change the media landscape as a consequence of technological changes, particularly digitisation. On the positive side a report by Deloitte showed that over 90% of all television watched and over 80% of all audio content consumed would be via traditional broadcast. This meant that the Corporation needed to continue its focus on creating content that was relevant for the core markets, whilst at the same time identifying potential opportunities for exploiting content on new media platforms that would deliver digital and non-linear platforms and additional value in terms of audiences and revenues. The business strategy would be implemented in nine areas.

In terms of News and Current Affairs the SABC was going to restore credibility of its brand. It would set the news agenda through reporting news and current affairs form a developmental agenda. The SABC would also take the lead in determining perceptions of South Africa as the 2010 FIFA World Cup host by carrying special news programming. It would review its business model and would try to achieve wage bill efficiencies by reducing the wage bill from 70% to 60% of operating costs. It would use international partnerships to mitigate reduced international presence and re-align the structure against strategic outputs and aligned workflows.

The business strategy for Public Broadcasting Service Division would include implementing audience-centric programming that protected existing audiences and listeners. The SABC would deliver on all mandate requirements in terms of ICASA licence conditions, SABC Charter and Broadcasting Act. It would improve universal access through installation of low power transmitters to reach five million South Africans without access to SABC radio and TV. It would also drive cost efficiencies and balance mandate delivery with commercial imperatives. Revenue would be R2.87 billion, expenditure R1.47 billion and profitability R1.4 billion.

The third area was Public Commercial Broadcasting Services. The SABC would grow the total PCS radio listenership share from 13% to 14%. It would also grow SABC 3 audience share from 14% to 16% during prime time. It would drive cost efficiencies and balance mandate delivery with commercial imperatives. Revenue would be R1.2 billion, Costs R545.8 million and PBT R657 million.

The SABC would review and approve of Content Enterprises Business Model. It would implement the SABC Intellectual Property Framework Policy and media rights regime. The SABC would also increase revenue on alternative revenue streams by R20 million, reduce the cost of content budget by R100 million and reduce the cost of rights by R50 million against all rights acquired.

In terms of technology the SABC would provide technical services for the coverage of the 2010 FIFA World Cup. It would consolidate all IT islands into a single unified IT environment and all signal distribution and linking costs into a single business unit. It would also ensure day-to-day operational performance was sustained.

In terms of Audience Services the SABC would achieve R1 billion cash collection targets. It would also intensify debt collection as segmented debtors books, rehabilitation strategy and legal action resulting in R322 million gains. The SABC would improve and sustain performances of Divisional Contact Centres and interaction points performance levels of contact centres. It would also improve divisional quality of customer interactions.

Commercial Enterprises was the engine of the SABC and drove delivery revenue. The Corporation would meet its revenue target of R4, 039 billion at a cost of sales ratio of 5.5%. It would regain the market share by increasing TV from 51.9% to 54% and radio from 41.2% to 45%, digital media capture would increase to 2%. The SABC would improve sales collateral strategy and planning and meet the revenue target of R220 million. It would enhance skills base and recruit and select requisite skills by appointing General Manager of TV Sales, General Manager of Finance, Manager Marketing Services and four supporting staff.  In terms of managing debtors books the SABC would increase debtors’ days from 60 to 80 day, manage credit notes 30 days after invoice and reduce government debt by 75%.

The targets set for Human Capital Services include learning and development. A 100% skills audit would be completed by March 2010. The SABC would also look at remuneration and benefits, and would establish the framework for the definition and classification of General Managers by June 2010. It would also look at leave benefits management, fringe benefits management, employee wellness, employee relations and organisation development.

In Corporate Affairs the SABC would look at stakeholder relationship management. The Board would sign off on 10 key stakeholders based on the stakeholder management plan by April 2010. It would integrate and consolidate public relations and communications efforts on brand building by June 2010 and inform and create staff awareness on SABC vision and corporate strategy by May 2010. It would also evaluate the effectiveness of the communication tools for information sharing and dissemination by September 2010.

Strategic Projects
The SABC had two main strategic projects:
▪ Local Government Elections
In 2011 South Africans would go to the polls and it was only a well-informed citizenry that could properly exercise their democratic rights. The SABC was the only organisation that was positioned to deliver news of the elections together with voter education programmes to all the people of South Africa in the language of their choice. The SABC wanted to recoup its expenditure on the elections and would present its Election Plan and request for funding assistance, estimated at R15 million, to the Department in March 2010. The funding would positively impact on the Corporation’s current financial position.
▪ Digital Terrestrial Television (DTT)
In 2005 the Minister of Communications had convened industry workgroups to look at the opportunity for South Africa to migrate to digital broadcasting in order for the country to benefit from what is called the ‘digital dividend’ by freeing up spectrum. The SABC was committed to working together with Government and all stakeholders to facilitate the migration to DTT. The dual illumination period would be imperative in encouraging citizens to purchase Set-Top Boxes (STBs) to enable the analogue switch off. This would be costly to the SABC and it would not be able to recover costs of programming being broadcast on DTT until approximately five million households had made the switch. Following publications of DTT Regulations by ICASA on 15 February 2010, management was in the process of reviewing the DTT Business Plan before resubmitting to the Board and the Department for approval.

Financial Plan
Mr Robin Nicholson, Chief Financial Officer: SABC, addressed the Committee on the financial plan. In terms of growth outlook All Media Ad spend was projected to grow at 4% in 2010, due to the increase in retail sales underpinned by the World Cup. In 2011 Ad spend was projected to grow at 0.7% and at an average of 8% from 2012 onwards. Household Consumption Spend was projected to grow at 1.2% in 2010 and 3% average from 2011 onwards. Retail Sales were projected to increase by 4.2% in 2010. GDP was projected to marginally recover showing a 1.5% growth as compared to 2.4% decline in 2009. Media inflation was projected at 12% in 2010 and 6% from 2011-2014. The 12% increase in 2010 was mainly driven by the projected Ad Spend growth underpinned by the FIFA Soccer World Cup.

Mr Nicholson went through graphs and pie charts showing the breakdown of: Plan Assumptions; Revenue Assumptions; Income Statement; Detailed Revenue; Income Statement for next three years; and Capital Expenditure Budget.

2010 FIFA World Cup
Mr Mokoetle said that the event afforded the SABC with the single biggest opportunity to reinvent itself into the best broadcaster that South Africans once trusted and had tremendous confidence in. It was also one that the Group CEO would use to mobilise all divisions and functional areas to turn the SABC into a more effective and efficient broadcaster. The SABC would deliver the ultimate broadcast experience for television audiences and radio listeners. It would have TV simulcast broadcast with Radio on all 64 games live in all 11 official languages. It would increase viewership and listenership from 66% to 73%, television share and radio from 55.4% to 58.7% PBS and PCS radio from 8% to 9% share.

All the necessary technical facilities were already in place to meet SABC Sport’s pre-tournament production plans. In the run up to 11 June, SABC Sport had already undertaken a number of rehearsals and was planning further rehearsals in the coming months based on actual matches (PSL, Bafana Bafana friendlies, etc). This would enable the SABC to test plans that would be in place for the tournament coverage. Radio was also involved in these rehearsals. Up to four HD OB vans would be used for the coverage of the 12 matches presented live from stadiums. Two High Definition Mobile Production Units (MPUs) together with two EVS vans would be used for the coverage of eight matches presented live from Public Viewing Area (PVAs). One Outside Broadcast van and one SD MPU would be on hot stand-by for unexpected events and productions. Two DSNG units with two cameras each would be used for the live contributions from the 47 PVAs (one per day). Ten ENG teams would gather stories in Host Cities.

Technology services in place to meet production requirements for outside broadcast (OB) and studio based coverage were: Radio 2000 would broadcast live coverage of all 64 matches from stadiums and would broadcast presentation from approximately four public viewing events. Ten PBS radio stations would broadcast live coverage of 12 matches from stadiums with all other match commentaries broadcast live from purpose built off-tube commentary facilities in Radio Park. Metro FM would broadcast from Fan Fests.

Auditor-General South Africa (AGSA) 2008/09 Report
Mr Cedric Gina, Board Member: SABC, explained that on 1 July 2009 the Committee had requested that the AGSA conduct an investigation at the SABC. There were three investigations: supply chain management issues; matters of potential fruitless and wasteful expenditure; and human resource-related matters. The findings on Supply Chain Management deficiencies were predominantly due to non-adherence to policies, directives and delegated authority by senior management. These findings therefore pointed to inadequate monitoring and oversight by the leadership of the SABC and the creation of the environment at the SABC where the “tone at the top” was not appropriate, which in turn seemed to have created a culture where management was not focused on public accountability or acting in the best interest of the SABC. The deficiencies were further amplified by a number of instances where the internal audit function and the audit committee had brought to the attention of leadership serious concerns, which were not acted on timeously and decisively.

The new SABC Board had taken the following approach to address the AG report; (in tabular format found in the documentation): AG findings, AG recommendations and SABC Action Points and Progress. The approach was generally accepted in the auditing and accounting industry. The approach would enable the Board to monitor and report on progress to the stakeholders (Department of Communications and Parliament). The new SABC Board had applied its mind on the findings and recommendations and actions required to correct the deficiencies and non-compliance. A progress report was given about disciplinary action taken against 5 senior managers. The AGSA report looked at: Conflict of interests; procurement of goods and services; appointment of consultants; fruitless and wasteful expenditure; and disciplinary cases involving senior executives.

Television Licences
Mr Nicholson provided pie graphs showing the components of the R250 licence fee, which was divided between VAT, direct collection cost (cost-of-sales), external opex and public service broadcasting (PSB) allocation. There was also an analysis of direct collection costs and analysis of operating expenditure. In terms of the television licence fee cost drivers, Mr Nicholson said that the licence fee collection efficiencies had been improved steadily and TV licence revenue had been increased with only six tariff increases over the past 19 years. Had the fee been allowed to increase with CPI it would now have stood at R576 per annum and the SABC would have collected an estimated R795 million more in the financial year 2008/09. Despite the increase in the number of accounts (55% growth from 2004 to 2009) and the resultant higher workload (servicing accounts), collection costs and operating expenditure had been contained. Income from the TV Licence Fee currently contributed to around 18% to the SABC’s annual operating revenue (Financial Year 2009/10 projected cash revenue was R970 million). Audience Services (TV Licence) total expenditure constituted 5% of the SABC’s annual operating expenditure.

Discussion
Mr N Van Den Berg (DA) asked the SABC if it did not feel that its administration was too big and that too much money was going into it compared to its core business of entertainment.

Dr Ngubane replied that government worked because of democracy but the SABC was not using democracy in the right framework. There was market failure because it was not producing resources. This was why the SABC wanted to align itself with Government. It wanted to continue informing and entertaining people through local content. It needed to assist the rural areas with development which the market did not fund.

Mr Mokoetle said that the SABC was not happy with the Administrative costs of the Corporation. The structure had become too big and delivery of the core business had become too high. There were too many managers and not enough people actually doing any work. The SABC was going to look at the structure because it was too big.

Ms J Kilian (COPE) said that she was happy that the SABC was doing some restructuring. The salary bill had gotten out of hand and there were no job profiles. However, it was difficult for any organisation to conduct internal restructuring. She asked if the SABC was going to bring in external management consultants to look at the SABC’s mandate and then advise it on what type of structure it needed. She also wanted to know what the Corporation’s current shortcomings were, and was the SABC behind on its agreement with Government. It was important that the new Board worked on restoring the public’s confidence in the SABC. The presentation had made reference to the 7pm news bulletin. Ms Kilian wanted to know why the revenue had gone down, and was there a problem with content.

Mr Mokoetle indicated that the SABC had already received confirmation from the Board to set up a turnaround unit. It had looked for people within the industry to assist. The Board did not want the SABC to go back into consulting mode, which cost a lot of money. It would bring in people with the necessary skills but the bulk of them would be from within the Corporation.

In terms of restructuring he hoped Parliament would appreciate that it would not be easy. The country was focused on job creation but the SABC needed to look at its wage bill which would affect jobs. It would not resort to layoffs immediately but when the time came it would approach it sensitively. There would be contracts expiring at the end of year so it would have a look at these. Difficult decisions would need to be made.

The SABC had lost significant market share compared to tariffs set and investments put into the Corporation. News gathering was driven by the English language, so the 7pm news was scheduled at an appropriate time in English but this had shifted and people preferred to watch the news at a later time. The main issue was the language factor. The 7.30pm news on SABC 1 in an African language was the most watched news bulletin. Many factors related to this.

The loss of revenue was not only due to the recession but also because of rescheduling instability and insecurity which had scared off advertisers, especially when there were scheduling shifts at the last minute. If scheduling was stable, then advertisers would come back. Content had also been affected because there was no money for new shows and so there were many repeats.

Ms Charlotte Mampane, Acting Chief Operations Officer: SABC, added that the SABC was over-delivering and the biggest challenge it faced was the cost of delivering its mandate and relying on advertising revenue.

Mr S Kholwane pointed out that the SABC had been bailed out by Government through a loan, because of financial problems. He could not detect whether Government was going to get another knock on the door from the SABC asking for more funds, He asked how compliance with ICASA regulations was going to help the SABC and what impact it would it have on the Corporation. He asked why the quality of the SABC channels was bad when watching them through private satellite TV enterprises. He also pointed out that the SABC had said there was an issue with the Broadcasting Act. He wanted to know how it affected the SABC and could it do restructuring with the Act in place.

Mr Mokoetle replied that the issue the SABC had with ICASA was that if it wanted the public service broadcaster to be on the paid platform then it should be paid for. In 1999 they said that the SABC could not be given to the private enterprises for free, they must pay for it. That had since been revised and now SABC channels had been given to private enterprises for free. This was unfair to the public, as it meant that public funds were being used to fund the private enterprise. In terms of the bad quality of SABC channels on satellite TV, he said this was because the bit rate given to the channels by them was too low. The SABC was hoping that regulators would take this up with the Department, as it was concerned about this especially during the World Cup. It was ridiculous to have a bad quality channel on digital compared to analogue. The SABC was also seeking to address the wage bill but the process was limited by the legislation. Structure followed strategy and change but with the SABC it was the other way round. The SABC was aligned with the Act so not much could be done until the Act was amended.

Mr Nicholson told the Committee that the SABC had requested funds from Government the previous week.

Ms W Newhoudt-Druchen (ANC) asked why old programs were being repeated on SABC channels as it put people off. She wanted to know how the Corporation was planning to phase this out. She also wanted to know about accessibility for deaf people, and what SABC was doing to make sure that community TV programs had sign language interpreters. She asked if there would be sign language interpreters during the World Cup so that the deaf community could also have access to World Cup news and games.

Ms Newhoudt-Druchen encouraged the SABC to use subtitles on their local content as was done with the SABC 2 show 7de Laan. This would help people from all different language backgrounds to understand and would help with literacy levels in the country. She asked why an HIV advert, which had a sign language interpreter, was only being shown at 11:00pm. She had not even seen the advert because it was on too late. The deaf also needed to be educated on HIV and AIDS and so the advert should be on earlier. Lastly, she wanted to know what the total amount for a TV licence was at present.

Ms Mampane replied that the SABC had an 18 month challenge which had to do with cash flow and so it was unable to pay for new content hence the repeat of programs. She said that it was making sure that the Corporation had a strategy, and despite repeats it did show new content which had never been viewed on South African TV before such as ‘SA’s Got Talent’. There were new targets set in the business plan but it could not be reached unless there were investments in the new programs.

In terms of subtitling, Ms Mampane said that she felt there was a need for the SABC to consider doing this on all programs and that it would happen. When answering the question about the HIV advert she said that it was unfortunate that it was aired so late at night but this all depended on what time slots the SABC had open. During the day it was trying to drive revenue and advertising revenue was so important, but she would find out what they could do to make sure people saw the advert.

Mr Mokoetle in answering the question about community television programs said that he had established that part of the plan was to engage with communities. The SABC wanted to deliver programs to a new audience. Having sign language interpreters during the World Cup was going to be difficult especially during live games but during the highlight packages there would be one. He added that subtitling was a technique the SABC was continually trying to use.

Mr Nicholson replied that the last increase for the TV licence was in October 2009 and that it was cost R250 at the moment.

Ms L Mazibuko (DA) said she did not really hear what the CFO was saying when he was talking about the request for coverage of the 2011 local government elections. She wanted to know if the SABC had met that kind of request in the past. She was aware that the SABC had received regular transfers from the Government but it was another thing when talking about local government elections. Had this been done before and was it in the same region?

The Chairperson said that the Committee had to report on the budget of each entity. The problem was that  Government funding of R15 million was not there for election coverage. They were working on a budget short of R4 million and this money was not going to fall out of the sky. He asked what was going to happen and was the SABC going to be asking Government for more funds. He did not know how the budget was matching the strategic plan. The standard method of reporting was not acceptable anymore. This was important because the SABC was having a financial problem.

Ms Kilian asked whether the SABC was allowed to budget for a deficit.

Dr Ngubane replied that the SABC was not allowed to budget for a deficit. The Board had come into the SABC which already had a serious deficit but it was going to try not to use the Government Guarantee.

The Chairperson asked the SABC for confirmation on whether it had the R15 million. The Committee needed a more detailed breakdown of the Corporation’s budget.

Ms Kilian asked the Chairperson if the Committee was going to tell the SABC exactly what they needed. It was important for the Committee to understand the cost of the Corporation’s structure and senior management and the structure of the wage bill. They had to understood what the process was and how the SABC intended to review that.

Mr Mokoetle replied that the perspective the SABC took in its presentation was for developing the corporate plan and it had already predetermined that by the Government Guarantee and targets set by the Department of Communications and the interim Board. There was already a two-year plan in place which was being implemented between end of 2009 and 2010 and going forward. What needed to be met clearly were targets for the past year 2009/10 which was closing at the end of March. The Committee was right in that the SABC would be carrying a deficit into the 2010/11 financial year, and the result of that was that management and the Board had taken the view that this would be a budget driven corporate plan. That it would have a target number and the organisation’s strategy would have a fixed figure otherwise it would have a strategy that was not aligned to the budget. The allocation of R15 million was based on an estimated figure which already anticipated that the event was going to happen in 2011 but the SABC would come back to the Committee with a definite plan.

Dr Ngubane said that the SABC needed to put people on the ground who would cover the election and who would be able to teach people how to vote.

Mr Nicholson commented on the R15 million, saying that there was usually control around expenditure on its mandates, and by covering the election the SABC, it was providing a public service to the people. A comprehensive document detailing the corporate plan and budget had been given to the Department. The budget for next year, the R74 million loss and the debtors R54 million the Government guaranteed and it was in agreement with National Treasury. Revenue was an issue and there was a deficit agreed on by National Treasury.

Ms M Magazi (ANC) said that the SABC had to budget for every project and it knew there was going to be an election in 2011. It knew it had to budget every three years for an election.

Mr L Mkhize pointed out that the last time the SABC was with the Committee it spoke about equipment, but there was no strategy in the presentation about it. He wanted to know if the SABC was happy with the equipment it had at the moment.

Mr Nicholson replied that the SABC was in the process of finalising a contract with an equipment supplier.

Ms Kilian pointed out that the figures in the Budget book presented to the Committee were different to the presentation. She asked that the SABC give an indication of what cost-cutting measures were in place and how it would affect its mandate. She said the Committee needed to know what it was approving and how was the SABC getting itself in order,

Mr Van Den Berg asked if the new Broadcasting Act would have a financial impact on the SABC.

Mr Mokoetle replied that it would have an impact on the SABC and in some instances even a positive impact.

The Chairperson asked that the SABC submit a document with a bit more information than the document the Committee had received. However, he did understand that the SABC did not want its competition to have access to these documents and that these Committee meetings were open to anyone.

The Chairperson asked if there was a formal criminal investigation going on.

Ms Kilian said that she was disappointed because when she looked at the AG findings and suggestions she felt that the Board did not go forward and try to resolve many of the issues.

Dr Ngubane assured the Committee that the Board was not soft on crime or corruption. He felt that it was unfair that Ms Kilian implied that they were not trying to save the SABC and he asked that the Chairperson give them protection against this comment.

The Chairperson asked Members not to judge the SABC as they did not have enough information at present to do so and they were unable to get clear answers from the Board.

Mr Mkhize asked that the Members move forward and that they acknowledge that the SABC had submitted a report showing improvements being made within the SABC. He added that during the investigations the Corporation should not lose focus on moving the SABC forward. He asked that the Committee allow the Board to sort things out and that the Members should stop trying to micro-manage the SABC.

The Chairperson reminded Members that last time the SABC was there they had asked it to submit a more detailed report which they had done.

Dr Ngubane reminded the Committee that the SABC Board had a meeting three times a week, for which they did not get paid, and they were working on the issues. He asked that the Committee give them a chance and the time to work through the problems, and that the Board has considered advice from the Committee.

Universal Access Agency of South Africa (USSASA) on its strategic plan and budget for 2010
Mr Louis Moahlodi, Chairperson of the USAASA Board, said that the organisation wanted to facilitate and maintain universal service and access to ICT services to all South Africans in partnership with other stakeholders to achieve an inclusive information society. He also spoke about USAASA in terms of its mandate as a: promoter, facilitator, innovator, definer, researcher and monitor, advisor and fund manager.

The structure of USAASA was made up of the board of directors, the chairperson and the secretary of the Board. It was then divided into three sub-committees: Finance and Business Development; Human Resources and Remuneration; and Audit and Risk Management. The governance structure was made up of: the Chairperson of the Board; the Chief Executive Officer; the Chief Financial Officer; the Executive Manager: Corporate Services; and the Executive Manager: Business Development.

Mr Winile Lamani, Acting Chief Executive Officer: USAASA, went through the organisation’s key strategic projects. These included: Development of Universal Access and Service Strategy; Clear Publication Guidelines for Universal Service and Access Fund (USAF) Application; All USAASA Subsidized Sites Mapped in a Geographical Information System (GIS); Development of Measurable ICT Access and Impact Indicators; Implementation of STB Scheme-of-Ownership Model; Development of Competitive Bidding Strategy and Implementation; Continued Implementation of Handover Strategy; Development and implementation of an ICT Hub Mode; and Implementation of Rapid Deployment Strategy.

The development of the Universal Access and Service Strategy was made up of four phases which would be implemented between April 2010 and December 2010. Between January and March 2011 USAASA would submit the final report to the Board for approval and to the Minister for adoption. The head of Business Development would be responsible for the project and an amount of R2,7 million had been budgeted for it.

The clear guidelines for the application of the Fund were also the responsibility of the head of Business Development. It would be implemented between April 2010 and March 2011 with R2,1 million budgeted for the project.

The advance goals of the universal access and universal service would be implemented between April 2010 and March 2011. An amount of R700, 000 had been budgeted for the project.

All USAASA subsidised sites mapped in a Geographical Information System (GIS) would need a budget of R2 million to implement. Between April and June 2010 it would appoint a service provider to map Agency subsidised sites. From July 2010 to September 2010 fieldwork to take GPS coordinates of all sites and new ones would be done. From October 2010 to December 2010 mapping of agency subsidised sites would be done and from January 2011 to March 2011 the electronic report on access gap maps would be done.

The development of measurable ICT access and impact indicators would need R250 000 to implement between April 2010 and March 2011. The National Program Management would need R2, 452,000 in order to implement the program between April 2010 and March 2011.

The planning of STB Scheme-of-ownership Model would need R17,3 million to be implemented. From April to June 2010 the implementation strategy formulation would be done and from July to September 2010 it would appoint service providers to manage the implementation. Implementing of the STB Scheme-of-Ownership Model would need a budget of R180 million from USAF. Competitive Bidding Strategy and Implementation would need a budget of R14, 926,700 from USAF.

The continued implementation of the handover strategy would need R23, 686,300 to implement between April 2010 and March 2011.  To facilitate strategic partnerships and other empowerment initiatives would need R1 million from USAASA and R2 million from USAF. Development and implementation of an ICT Hub Model would need R27 million from USAF and implementation of a rapid deployment strategy would need R13, 080,000 from USAF.

A summary of the budget was presented to the Committee. The budget needed for USAASA’s business development was R26, 402,000, the budget for USAF business development was R220, 726,080. USAASA needed R27, 000,000 from the Department of Communications.

Discussion
The Chairperson wanted to know what the amount was that USAASA was getting from the Department of Communications.

Ms Linda Ngcwembe, Acting Chief Financial Officer: USAASA, said that the organisation was getting R66,7 million from the Department but it needed R70 million for its total operation budget.

In reply to the Chairperson asking if it had already received this money from the Department, USAASA said it had not.

Mr Mkhize wanted to know why USAASA needed R2, 700,000 for the development of the Universal Access and Service Strategy.

Mr Van Den Berg said that the Committee had heard a lot about the Universal Access Fund, but he wanted to know what the fund was worth and had USAASA used any money to give people access. He also asked that USAASA give the Committee a progress report on what had been done over the past few years by the organisation.

Mr Kholwane asked what the R180 million subsidised. He also wanted to know why the budget said that from October to December 2010, R183, 500 was needed and between January and March 2011 R183, 500 was needed but the total was R180 million for implementation of STB Scheme-of-Ownership Model. The numbers did not add up. Where was USAASA at the moment and what state was the organisation in? He also mentioned that in the presentation USAASA was talking about the level of connectivity. He asked if it knew at what level the country was and what system had USAASA adopted. 

Mr Lamani replied that there was an error in the report and the 183,500 was the number of set boxes needed which would cost R180 million.

The Chairperson said that in the interim the Minister had given the organisation a huge responsibility and had given USAF a fund to set up these boxes. He did not feel that the Department could give USAASA R66 million just to be a facilitator. He said there was no point in USAASA telling the Committee about the past. The Committee wanted to know what USAASA’s programs and goals were and how much money it would spend. He said the presentation did not give them any of this information.

Mr Mkhize asked that the Committee give USAASA more time to beef up their presentation and documentation because at present it was not giving Members much information. He was not sure how many ICT hubs were functioning.

The Chairperson told USAASA that the Committee was not rejecting its documents and presentation but that they needed a document with more information on how funds were going to be used. He asked that USAASA return to Parliament the following week with more information for the Committee.

National Electronic Media Institute of South Africa on its strategic plan and budget for 2010
Mr Vuyo Makaya, Acting Chief Executive Officer: NEMISA, said NEMISA had a dual mandate. It was a provider of advanced multimedia and technical skills for content generation and it was the electronic content development centre for the Government of South Africa. NEMISA was focused on skills development in the ICT sector to achieve the transformation goals of South Africa. Its vision was to be a leader in the development of world-class electronic media skills in the ICT sector.

NEMISA’s areas of focus were: Content Design and Production – television and radio production; animation and graphic design; Technical Operations – television and radio production; Broadcast Engineering – installations and maintenance; and Information Technology – personal computer technicians development.

NEMISA had four training and development strategic areas. The first area was Community Media Development. Its designated groups were youth, women and people with disabilities. The second strategic area was Community Radio Sector. The third strategic area was Community Television sector. The fourth strategic are was New Entrants – broadcasting, broadcast engineering, IT and multimedia fields. There were two content development strategic areas; the first was Provincial Governments and the second Government Departments.

NEMISA had eight strategic projects. The first strategic project was Content Development: National Heritage. Areas of collaboration were local digital content development – indigenous knowledge systems (live action; animation; graphic design). The projects included documentary film making which needed a budget of R1.3 million and Presidential National Commission (PNC). Animation shorts and feelers combined was budgeted on R84 000.

The second strategic project was e-Health. Areas of collaboration were website and content development for district hospitals and development of broadcasting content. The projects included extension of scope in E-Cadre Development and extension of scope in Presidential National Commission (PNC) project. This would take place between July 2010 and September 2010.

The third strategic project was Gender, Disability, Youth & Child (GDYC) Mainstreaming. Areas of collaboration were implementation of the National Youth Service Programme. The project was Community Media Development for Designated Groups in partnership with MDDA. NEMISA said the problem was that the country was not moving as fast as it should towards community media.

The fourth strategic project was Broadcast Digital Migration. Areas of collaboration were content development awareness campaign. The project was NEMISA’s in-house production in which it would be utilising employed and freelance graduates. This project would need a budget of R1.5 million.

The fifth strategic project was also Broadcast Digital Migration. Areas of training were technical operations. NEMISA would train the youth in townships in device installation and maintenance, so that they could provide a service for their community. This would cost R3 million and would be implemented in two phases between July and October and October and December.

The sixth strategic project was community development. Areas of collaboration were community radio sector development and community television sector development. Projects included the National Community Radio Forum Projects and Soweto Television.

The seventh strategic project was media industries new entrants’ development. Areas of training would be broadcasting and multimedia fields. Projects included: film, television and video production with a budget of R3.9 million; radio production with a budget of R3.6 million; graphic design with a budget of R2.8 million; animation with a budget of R2.8 million; and broadcast engineering with a budget of R951 000.

The eighth strategic project was Information Technologies Technicians Development. Areas of training were technical maintenance. The project was providing grade 11 and 12 students with personal computer technicians. This would need a budget of R1 million and would be implemented in two phases. Phase one would be from July 2010 to September 2010 and the phase two would be implemented from January 2011 to March 2011.

Ms Karen De Wet, Chief Financial Officer: NEMISA, highlighted what Mr Makaya had said and went through the budget amounts for each project. She told the Committee that everything they had budgeted for included total costs even wages.

Ms Kilian pointed out that some projects generated more revenue than others and so she wondered what was the nature of the type of tender NEMISA went out to.

The Chairperson thanked NEMISA for its presentation and reminded USAASA that it would need to come back to the Committee the following week with more information.

Meeting was adjourned.