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Cloud of corruption hangs over STB tender

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 07 Aug 2017
More corruption allegations emerge in set-top box tender process.
More corruption allegations emerge in set-top box tender process.

With fresh bribery and corruption allegations relating to the procurement process of government-subsidised set-top boxes (STBs), there is pressure on the communications minister to make the STB procurement report public.

Democratic Alliance MP and shadow minister of telecoms and postal services Marian Shinn has called on minister Ayanda Dlodlo to publicly release the report arising from the investigation into the procurement process of STBs.

The Sunday Times reported at the weekend that one of president Jacob Zuma's sons has been implicated in a bribery scandal relating to the tender of digital TV decoders.

According to the Sunday newspaper, Mxolisi Saady Zuma "allegedly tried to broker a bribe with Altech UEC, a subsidiary of Altron, to help the company secure a multibillion-rand TV set-top box contract".

The bribe, described as commission or a consultancy fee, is said to be in the region of R54 million.

An Altron group executive has refuted claims the company was involved in plans to bribe the president's son to win the lucrative tender, according to the newspaper.

While it is believed the money was never paid as noted in the Sunday Times article, Shinn is of the view that making the procurement report public will "reveal where the corruption in the process was identified in the R1 billion first phase of the STB procurement process and prompt the relevant criminal investigations".

Treasury investigates

The Universal Service and Access Agency of SA (USAASA), the agency charged with the responsibility of managing the production and installation of STBs, decided to award a R4.3 billion tender to manufacture digital migration decoders to all of the 27 companies that bid for the tender.

Following growing criticism and questions regarding the capacity of those bidders to deliver the digital TV decoders, the communications department, under the leadership of Faith Muthambi, sought National Treasury to conduct an investigation into the appropriateness of USAASA tenders.

MP and shadow minister of telecoms and postal services Marian Shinn.
MP and shadow minister of telecoms and postal services Marian Shinn.

National Treasury commissioned PricewaterhouseCoopers to investigate the process and its report was handed to Muthambi.

The investigation found the process of evaluation and adjudication of bids was not in line with USAASA's supply chain management policy and National Treasury regulations.

In terms of the report, the tender process followed by USAASA led to non-qualifying companies in terms of scores allocation, and establishment of the panel of 27 manufacturers instead of appointing qualifying companies.

In light of the investigation, the Treasury report recommended the production process of STBs be stopped with immediate effect.

Shinn has criticised the communications minister and the minister in the Department of Telecommunications and Postal Services, to whom USAASA reports, for failing to take action on the report's findings.

She explains: "Parliamentary questions I asked on action being taken on the report's findings have had both ministers of communications and telecommunications and postal services ducking the issue, saying it was up to the other to take action.

"CEO of USAASA Lumke Mtimde has responded to Parliamentary questions on the National Treasury report that he has not engaged with it and is basing any 'disciplinary investigations' on supply chain management highlighted in the auditor-general's annual 2016 report, indicating there is little appetite for probing the wider issues of possible corruption in the process."

Shinn adds: "For the past year, I have repeatedly asked both the chairpersons of the portfolio committees on communications and telecommunications and postal services for a two-day parliamentary hearing into the status of the broadcast digital migration process, its legal and fast-changing technological challenges, and to seek views of all stakeholders in the digital migration process to discuss ways to accelerate the process."

Playing catch up

SA's switchover from analogue to digital terrestrial television (DTT) has been hampered by policy uncertainty and broadcasting turf battles mainly centred on STB encryption.

The country missed the June 2015 deadline set by the International Telecommunication Union for countries to switch to DTT.

After missing this cut-off date, the DOC began the digital migration process in border-lying towns, as these households require the use of encrypted STBs for DTT.

The department is working together with the South African Post Office to reach communities and distribute the subsidised television decoders to qualifying households.

To qualify for the government-subsidised decoders, television viewing households must earn less than R3 200 per month, according to the DOC.

Government has committed to giving five million subsidised STBs to poor TV-owning households.

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