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High Court to review STB tender award

Read time 3min 40sec
Legal action threatens to turn the set-top box production process on its head.
Legal action threatens to turn the set-top box production process on its head.

The Universal Services and Access Agency of SA (USAASA) has filed an application with the North Gauteng High Court to review the process that was followed in appointing 26 companies to manufacture government-subsidised set-top boxes.

Government has committed to supply five million subsidised STBs to low-income TV-owning South African households. The process, however, has been marred by legal battles, bribery and corruption allegations, as well as party politics over the amendments to the broadcasting digital migration policy.

USAASA's latest court application will potentially put another spanner in the digital migration process, which is already behind schedule.

According to the agency, because it can't review the previous board's decision to select companies that bid for the STB tender, it is looking to the High Court to determine a way forward in the continued process of manufacturing STBs.

Responding to ITWeb via e-mail, USAASA CEO Lumko Mtimde points out the application does not seek to invalidate the current service and delivery agreements with manufacturers, and the remainder of the five million needed STBs will be processed in terms of a new procurement process.

"The application is in respect of the entire procurement process and the appointment of the service providers on the panel. The application seeks an order from the High Court suspending the finding of invalidity regarding the conclusion of the existing service and delivery agreements with manufacturers," he states.

Mtimde explains: "On the 10th August 2017, USAASA, acting in terms of the provisions of the Promotion of Administration of Justice Act (PAJA), filed an application to review the entire procurement process in the broadcasting digital migration project and the resolution taken by the then USAASA board to constitute a panel of service providers in respect of four tenders issued by USAASA in 2014/5.

"USAASA applied to set aside the constitution of the panel, but in terms of the discretion accorded to the court, in terms of Section 172 (1) (b) of the Constitution Act and Section 8 (1) of the PAJA, to suspend the finding of invalidity, regarding the conclusion of existing service and delivery agreements with manufacturers."

Tender for all

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

In 2015, USAASA decided to award a R4.3 billion tender to manufacture digital migration decoders to all of the 26 bidders.

The move was met with resistance as manufacturers were left unsure as to how they would be contracted to produce the STBs.

While the tender to produce STBs and associated electrical equipment was awarded to all 26 bidders, manufacturers voiced concerns when USAASA decided to select only some companies to be involved in the initial production stage of 1.5 million STBs.

At the time, USAASA said BUA Africa was contracted to manufacture the direct-to-home STBs, while Leratadima Marketing Solutions and CZ Electronics were contracted to manufacture digital terrestrial television STBs.

However, it has been revealed USAASA placed the first order of STBs with six companies.

Attempts by ITWeb to contact the National Association of Manufacturers in Electronic Components, which lobbied to make sure the bulk of the tender to produce subsidised STBs was awarded to local emerging electronic manufacturers, were unsuccessful.

Democratic Alliance MP and shadow minister of telecoms and postal services Marian Shinn says she has lodged a request with public protector, Busisiwe Mkhwebane, to investigate possible corruption in the process undertaken by USAASA to procure 1.5 million STBs, satellite dishes and antennae at a cost of R1.3 billion.

According to Shinn, the action lodged by USAASA speaks volumes about the process that was suspect from the start.

"Depending on the public protector's findings, our request also asks for Mkhwebane to recommend the entire procurement process be cancelled and to suggest possible criminal investigations."

SA is in a race to complete the digital migration project after missing the June 2015 deadline set by the International Telecommunication Union for countries to switch from analogue to digital terrestrial television.

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