Communications minister Solly Malatsi has committed to restoring governance and ensuring there are permanent executives to head up some of the entities reporting to his department.
Malatsi, who has been in the job for just over a month, took over as minister in the Department of Communications and Digital Technologies (DCDT) as part of the Government of National Unity (GNU), with predecessor Mondli Gungubele serving as deputy minister.
Within the DCDT portfolio are 11 state-owned enterprises (SOEs): Broadband Infraco (BBI), Film and Publications Board, Independent Communications Authority of SA, NEMISA, Postbank, SABC, SA Post Office, Sentech, State IT Agency (SITA), Universal Service and Access Agency of SA (USAASA) and .ZA Domain Name Authority.
A few of these entities have received significant bailouts from the state, are under business rescue, in the process of consolidation, or face a number of procurement hurdles, in SITA’s case.
Speaking to ITWeb about his observations of the different entities under his department, the minister says in fairness “it’s a mixed-bag”, with some run really well, while others are going through phases of transitioning from difficult past moments.
“There has been some decent work done in terms of improving the governance level of some of these entities,” he states. “The biggest thing for me is ensuring there is stability in terms of leadership, making sure there are no prolonged periods without filling vacancies − be it at board level or senior management level.
“We also need to ensure there is always clear separation of powers between what the boards are entitled to do within their powers and what the executive management of these institutions are allowed. There is going to be a lot of time and energy that we dedicate towards continuing to improve the governance of some of the entities that had previously struggled.
“It’s a matter of making sure we bring everyone to the same level and there is standardisation in terms of performance and all the necessary governance-related outcomes.”
Case for PPPs
Commenting on whether there might be public-private partnerships (PPPs) for some of these entities, he says: “Oneof the things that are very obvious is that the South African fiscus faces alot of pressure and is increasingly going to be giving less to state-ownedenterprises.
“Going forward, I don’t think we’ll see the volume and depth of the bailouts that have happened in previous years, because Treasury has made it very clear that its pockets are not that deep.
“Therefore, what is needed is to look at some of these state-owned enterprises and be realistic about the prospects for their future and how we empower them to remain competitive in markets that are highly-competitive. This means relooking the whole model of ownership of those entities and pursuing on a case-by-case basis as to which ones are suitable for public-private partnerships.
“The reality is that for some of these entities, public-private partnerships or partial public-private partnerships, or whatever their size will be necessary going forward. We just need to satisfy ourselves post our assessment as to which ones those will be. This is a widely accepted concept throughout government, to say that 100% state ownership in some of these entities will probably be unsustainable going into the future.
“We’ve got to make space for some partial involvement of the private sector through public-private partnerships.”
Malatsi wouldn’t be drawn to provide timelines as to identifying entities that are suitable for the public-private partnership model.
“Timeframes are important, but they need to be informed by a pragmatic assessment of the problem. At this stage, because we haven’t finalised that formulation, I’m cautious about imposing timeframes because you’ll set up unrealistic timeframes. However, these matters are matter of priority…we’ll be moving with speed on them.”
An entity of the DCDT, SITA sits as a central pillar of government's IT procurement arm. It has, however, been plagued by challenges over the course of its more than 20-year history.
These include allegations of corruption and mismanagement of procurement processes and a client base that is increasingly frustrated with the poor level of service delivery. It’s also been flagged by the auditor-general for irregular and wasteful expenditure.
Furthermore, the entity is no stranger to leadership instability. With the exit of Dr Bongani Mabaso in December, SITA once again found itself without a permanent CEO to steer the ship.
The minister acknowledges there is recognition that the deficiencies at SITA, over the years, have also had an impact on government in general, based on other sister departments that rely on SITA for ICT infrastructure services.
“Every day I’m inundated with complaints about some deficiencies on SITA’s side, whether through fellow colleagues in Cabinet or even members of the public.
“We are going to be spending a lot of time in trying to establish the core issues. Currently, there is an intervention at SITA that was set up by the deputy minister, which is the ministerial task team. This was established to deal with the deficiencies that are there, but SITA is definitely going to be a priority.
“If we can get SITA to be the well-oiled machine that drives government’s ICT infrastructure programme and ICT services, it will go a long way in terms of improving the state of digital services in key departments and portfolios of government.
“We’re going to prioritisethat SITA functions as optimally as it should. This will require a lot of timeand some tough decisions in the process. I think working together with the board, we’ll be able to navigate that space and reposition a SITA that meets the demands of the times we are living in.”
On the intended merger of BBI and Sentech, the minister says the decision on the consolidation of SOEs pre-dates the formation of the GNU but it’s the right thing to do.
“For our department, it is Sentech and BBI, and USAASA and USAF. The high turnover of ministers within the department, over a short period of time, has had an impact on that project. It is something that we’re going to be looking at again.
“We have to execute decisions that were made previously in the better interest of making sure that we have a leaner and much more focused administration, and reconcile mandates of entities that could be better together,” he concludes.
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