PP must probe R1,3 billion Set-Top Box tender - Marian Shinn

DA says entire procurement process should be cancelled and a possible criminal investigation should be launched

DA requests Public Protector to probe R1,3 billion Set-Top Box tender

16 August 2017

The DA has lodged a request with the Public Protector, Advocate Busisiwe Mkhwebane, to investigate possible corruption in the process undertaken by the Universal Service and Access Agency of South Africa (USAASA) to procure 1,5 million government-sponsored Set-Top Boxes (STBs), satellite dishes and antennae at a cost of R1,3 billion.

Depending on the Public Protector’s findings, our request also asks for Mkhwebane to recommend that the entire procurement process be cancelled and to suggest possible criminal investigations.

The STB orders, placed with six companies in August 2015, were part of the first share in government’s plan to give 5 million STBs, satellite dishes and antennae to qualifying indigent households at a cost - estimated in 2015 - of R4,3 billion in 2015.

In 2015, in response to my concerns about the procurement process, former Minister of Communications Faith Muthambi requested National Treasury to investigate the process and this report was delivered to her, as the custodian of the Broadcasting Digital Migration (BDM) programme in April 2016.

Ms Muthambi passed on the report to the Telecommunications and Postal Services Minister, Dr Siyanbonga Cwele, as he has executive responsibility for the entities charged with delivering digital migration, in this case, the Universal Service Access Agency of South Africa (USAASA).

Last September, the DA asked for a copy of the report, in terms of the Promotion of Access to Information Act (PAIA), from Cwele. It was ignored.

Our request to the Public Protector was prompted by repeated refusals by the Communications and Telecommunications and Postal Services Ministers to take ownership of this forensic investigation into STB procurement. Repeated requests to the Chairpersons of both the Communications and Telecommunications and Postal Services Parliamentary Portfolio Committees have also come to naught.

In responding to Parliamentary Questions, both Ministers have passed on the buck to each other when asked what action was being taken based on the National Treasury’s report.

Based on portions of the report contained in a document Ms Muthambi posted on the Department of Communications website last year, the report revealed significant irregular, and possibly criminal, actions in the appointment of the bid managers, procurement adjudicators and the bid evaluation committee; changing tender specifications after closing date and delays that increased the costs. It also found that the cost of the STBs was adjusted upwards to be at least 37% higher than retail cost.

Production of these orders was suspended by USAASA on 15 June 2016, because of legal challenges to the much revised BDM policy, that was ruled on by the Constitutional Court on 8 June 2017.

At yesterday’s meeting of the Parliamentary Telecommunications and Postal Services Portfolio Committee, USAASA CEO, Lumko Mtimde, said the National Treasury report had not been dealt with because it was marked as a ‘draft’.

Instead, USAASA had worked with the Auditor General’s 2016 report on the entity to investigate the irregularities and take internal disciplinary actions. He was uncertain whether any criminal investigations would follow.

USAASA has, on 10 August 2017, approached the Gauteng High Court to set aside the STB procurement process while condoning USAASA’s payments made to date, and to condone a request for the original orders - at the inflated cost - be completed. I assume USAASA has taken this approach to ‘settle’ the legal challenges from those companies whose orders were suspended last June.

While the Court has still to hear USAASA’s application, which the DA welcomes, we believe there may be more corruption that warrants investigation by the Public Protector and we trust that she will agree to investigate in the interest of rooting out all corruption in public procurement processes.

The action lodged by USAASA speaks volumes about the process that was suspect from the start. Hopefully Ms Mkhwebane’s report will reveal what went wrong with the process, who was responsible and recommend consequences for those who knowingly participated in, and benefitted, from the corrupt process.

Issued by Marian Shinn, DA Shadow Minister of Telecommunications and Postal Services, 16 August 2017