USAASA, set-top box installers at loggerheads

Read time 5min 30sec
USAASA CEO Lumko Mtimde.
USAASA CEO Lumko Mtimde.

Set-top box (STB) installation companies have accused the CEO of the Universal Service and Access Agency of SA (USAASA) of failing to advance the empowerment of small businesses by refusing to sign the contract extension that will see them continue their work.

This, they say, is despite National Treasury authorising the deviation in regards to the expired contract "on condition all the 26 were initially contracted to do the installations".

Amigen Investments, Silverwell Business Enterprise and Lerumo IT Solutions, which identify themselves as the digital terrestrial television installer forum representing the 26 installation companies initially contracted by USAASA, allege the agency has employed other firms that have not gone through the correct tender processes to install STBs.

However, USAASA CEO Lumko Mtimde says there is no truth to claims he refused to sign any necessary documentation, emphasising USAASA's contract with the referred-to "set-top boxes installation companies" expired and as such there is no existing contractual obligations.

Probing matters

Over the years, USAASA, which is charged with managing the production and installation of STBs, has had to fend off allegations of serious maladministration, unlawful conduct and unlawful expenditure.

In 2015, USAASA decided to award a R4.3 billion tender to manufacture the digital migration decoders to all of the 26 companies that bid for the tender. The agency also contracted 26 companies to install STBs.

However, the matter concerning digital migration set-top boxes and procurement thereof has been shrouded in controversy.

The Democratic Alliance (DA) previously called on the public protector to investigate the process undertaken to procure government-subsidised STBs. At the time, the DA said investigations into collusion in the process "clearly indicate serious procurement irregularities or criminal acts have been committed".

USAASA also filed a legal application requesting a review of the entire STB procurement process and the decision taken by its board to select a panel of service providers in respect of four tenders issued in 2014/2015.

During her time as minister of communications, Nomvula Mokonyane went as far as to say her department would not go through USAASA for matters relating to digital migration or for procurement. According to Mokonyane, legal disputes and collusion allegations concerning USAASA were areas she did not want to be dragged into.

Due process

The companies say they have written to communications minister Stella Ndabeni-Abrahams and president Cyril Ramaphosa to lay out their grievances.

Hilton Theunis of Silverwell Business Enterprise acknowledges the USAASA contracts have expired, noting the last one expired on 27 January.

However, USAASA created an expectation by requesting Treasury for the deviation, according to Theunis.

"They applied for the deviation and they received approval for it. We've got the letter from Treasury that approves the deviation. The letter categorically states the 26 companies sitting on the panel must continue with the work and only them. Terms of reference and everything should remain the same.

"What happened next was an internal process that was supposed to be completed - basically appointing the 26 companies based on the motivation to Treasury. The last step was an addendum that was supposed to be drawn up, which was. We signed the addendum on our side, but the CEO hasn't signed his part, so that prevents from making the addendum legal."

Mtimde confirmed USAASA's communication with National Treasury, saying it is part of the agency's internal business processes and is receiving National Treasury approval accordingly.

He explains: "USAASA received several complaints from local installers and community leaders that the local installers were being exploited and they were being paid, in some instances, as little as R30 for each installation, while the installer companies received approximately between R550 and R650 per installation.

"This has created conflict at a local level to the extent that some communities would not allow installations to proceed. The situation was exacerbated by, in some instances, installer companies also not using local installers and bringing in outside installers.

"USAASA is looking at all options to improve economic opportunities for local participation in the installation process. Previously, under the initial contracts with the referred 26 'set-top boxes installation companies', the local installers were sub-contracted by the installer companies."

When asked about the addendum, Mtimde says the process is a supply chain management process, which recommends to the CEO for approval.

According to him, the approval is pending completion of the options USAASA is considering in regards to the installation, which will inform the way forward.

Sentech to the rescue?

While the installation companies wait to find out what is in store for future business, they declare USAASA is using other companies, including Sentech, to install digital migration set-top boxes.

Theunis claims during a meeting with the CEO on Tuesday, 30 April, they were told Sentech has been appointed to do some of the installation. "We know that Sentech has contracted external companies to carry out installations."

As per the CEO's assertions, this is an interim set-up, indicates Theunis.

Amigen Investments' Steve Motuba says the fact that some of the initially contracted companies have had no work since December, and other people have been employed to carry out installations, is pure corruption.

The installation companies say they would like to install the balance of the set-top boxes that are currently sitting at the SA Post Office storage warehouses.

On claims Sentech has been contracted, Mtimde say these allegations are unfounded and totally false.

"There [are] no installations taking place in terms of the USAASA process. USAASA has not contracted with Sentech to do installation of set-top boxes. As we understand, Sentech is assisting the public awareness process led by the Department of Communications."

USAASA is fast-tracking resolving the broader challenges in respect of installation, through engagement with relevant stakeholders and when that process is completed, it will inform the way forward, Mtimde concludes.

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