Political meddling apparent in STB tender award
10 April 2015
Political meddling is apparent in the final awarding of the R4.3 billion tender for the production of 5 million set-top-box (STB) and antennas that government will give to qualifying poor households as part of the broadcast digital migration process.
The Democratic Alliance is examining options to determine whether action can be taken to exclude and expose those involved in extra-tender activities without jeopardising the much-delayed transition to digital broadcasting.
Business Day reported today that the Universal Services Access Agency of South Africa (USAASA), which is managing the STB process with partial funding from the Universal Service Access Fund, announced the winning bids yesterday. No announcement is made on USAASA's website, but I confirmed with one of the winning bidders that his firm was told the news by USAASA yesterday.
All 20 bidders get a piece of the pie. Of these, 15 bidders will produce and supply the STBs and seven, the antennas. Some companies will supply both.
The fact that so many bidders have been chosen to produce and supply the STBs - which must have 30% local content - indicates that intense lobbying - outside the tender adjudication took place.
A shortlist of four companies was presented to the USAASA board for approval on March 30. These four companies were deemed the most suitable bidders after extensive evaluation and site visits to determine quality production capacity and repair capabilities. The adjudication was led by Ernst & Young and included industry experts and representatives from National Treasury.
Ten days later 15 companies were announced to share the tender. The week before the board meeting a ruckus developed between the factions of the National Association of Manufacturers in Electronic components (Namec) when members belonging to the one faction learned they were not on the STB short list. Now, some of them are.
This adds weight to the suspicion that some bidders with no - or at best, minimal - STB production capability or facilities have already stockpiled imported STBs which cannot accommodate signal encryption over which there has been a year-long dispute. Minister of Communications, Faith Muthambi, fought for almost a year to ensure that signal encryption was excluded from the 18 March 2014 Cabinet approved Broadcast Digital Migration (BDM) Policy.
The only encouraging news from USAASA yesterday is that the allocation of the production orders will be at its discretion in compliance with section 217 of the Constitution which lists fairness, transparency and cost-effectiveness in procurement processes.
This sort of dubious tendering cannot be shrouded in confusion and irregularities and must be made public as soon as possible so that this process can continue without any further delays caused by tender turf wars.
Statement issued by Marian Shinn MP, DA Shadow Minister of Telecommunications and Postal Services, April 10 2015
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