Manuel gets ICT advice

Johannesburg, 19 Feb 2008

On the eve of his national budget speech, the finance minister has received some "Tips for Trevor" from the ICT sector.

Trevor Manuel will address Parliament tomorrow with his much-anticipated annual budget speech.

While fears of an international recession and questions over the impact of the ongoing national power crisis loom large over his head, research and consulting firm Frost & Sullivan cautions that ICT issues should not be left by the wayside.

Specifically, Frost & Sullivan ICT analyst Karin Howell says 2010 ICT spend needs to be addressed.

"Past experience (Korea/Japan World Cup in 2002 and Germany World Cup in 2006) has shown that FIFA's ICT requirements changed right up to the start of the first match," she says. "Indications are that we are heading in the same direction. Treasury has indicated it will not step in to assist the construction industry on over-budget limits, but will the same hold for IT budgets?"

Howell says Manuel needs to ensure contingency plans are in place to cover the costs of last-minute changes FIFA is almost certain to request. This type of forward thinking, she says, will increase confidence in the country's ability to host a successful event.

Government is yet to reveal how much it will spend on ICT for the soccer spectacular, but indications so far have been that it will be in the region of R3 billion to R5 billion. Deputy finance minister Jabu Moleketi has hinted it may exceed these expectations, but has remained mum on the issue otherwise, indicating Manuel would reveal all.

Crisis management

Power issues are expected to dominate Manuel's speech. Frost & Sullivan energy industry manager Cornelis van der Waal says: "SA has for many years been marketed as a cheap electricity destination and the country has, to a large extent, built its competitive advantage around this factor.

"The current power crisis demands rapid action and hence a number of steps need to be taken to ensure lasting advantage."

He advises Manuel to allocate at least R55 billion to Eskom, as it could struggle to raise funds needed for infrastructural expansion if its credit rating is downgraded.

"This money can be transferred to Eskom over a four-year period, but there has to be a very strong message from government that any debt obligations from Eskom will be honoured."

Van der Waal says Eskom's distribution network needs to be boosted though additional fund allocations so that the delivery of power is not compromised.

"A cash injection from government, coupled with forced maintenance spending by municipalities, will ensure grid reliability."