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18 October 2010


The Ministry of Communications held an ordinary quarterly meeting with the Board Members of SENTECH and the SABC to take stock of matters affecting all parties. The first meeting was with the Board of SENTECH and the Ministry received progress report concerning the following:

· An update on the suspension of the Chief Financial Officer and the previous acting Chief Executive Officer;
· The improved cash flow for the six months as at September. The financial statement also reflected that the operating profit margin increased from 7, 2% to 27% and the net profit margin increased from 13% to 32%.
· As at end of September Sentech had R230 million in cash
· Positive feedback and support on its business plan from the Parliamentary Portfolio Committee on Communications;
· Progress report on the implementation on the recommendations on the Independent Evaluation of Corporate Governance Practices.

The Board also gave the Ministry progress report on the second quarterly performance of SENTECH which currently reflects a R146 million operating profit which can be attributed to the newly introduced cash collections policy plus the implementation of austerity measures.

The Board further gave the Ministry a preliminary report on the progress made on the formulation of a national broadband plan.

On the appointment of the new CEO of SENTECH the Board received thirty applications, and shortlisted some for interviews. The Board also obtained assistance from a recruitment agency to extend the search for a suitable candidate. Of eight candidates who were identified, four were shortlisted for further evaluation. The evaluation results and the interviews conducted by the Board were the basis for the unanimous recommendation to the Ministry of a preferred candidate. I intend to submit the name of the new CEO of SENTECH to Cabinet. I will announce the candidate in due course.

On the meeting with the Board of SABC, the Ministry received progress report on the following:
* Performance against government guarantees
* Issues related to corporate governance
* Unqualified Audited Financial Statements of SABC
* Shareholder compact
* The progress report on the investigations as contained in the report of the Auditor General.
* Vacancies within the SABC Board

The Ministry noted a recommendation from the SABC Board on the withdrawal of the earlier report made by the Chairperson of the Board to the Parliamentary Portfolio Committee on Communications. The Board will now submit one report when it appears before the portfolio committee on Wednesday. The Board further updated the Ministry on their decision to request the Minister to amend the articles of association of the SABC to allow the Board to appoint an acting Group CEO. I referred all these matters to the Board of SABC for proper consolidation and resolution.

The SABC Board is currently holding a series of governance workshop to deal with matters of Corporate Governance Practices. I closed the meeting with the Board of SABC giving a frank talk on my expectations and the way the Board should focus on their mandate and avoid turning the SABC as a playground for factional interest.

The Department of Communication successfully presented its Annual Report at the Portfolio Committee on Communications in Parliament, Cape Town on the 13th October 2010.

The Annual Report was noted by Members of Parliament as an honest reflection of progress made in the year under review.

The Annual Report captured progress in terms of the following:
§ The role played by SABC and SENTECH in staging a successful Soccer World
§ Digital migration
§ Corporatization of Post Bank
§ ICASA Amendment Bill
§ Public Service Broadcasting Bill
§ ECA Amendment Bill
§ Implementation of International Agreements
§ Filling of vacancies

It was within this context that the PCC raised the following matters that appeared in the Annual Report as alluded by the Department:

§ The Human Resource constrains of the department
§ Possible under-spending
§ Irregular and fruitless expenditure
§ Performance of some State Owned Enterprises (SOEs)

On that basis the PCC passed the following resolution:
§ Urgent need for the department to rectify all matters related to supply chain management and financial matters
§ Attend urgently to issues of filling vacancies especially within Senior Management Services (SMS’s) with suitably qualified and competent personnel.
§ That the department should initiate a process of redefining its strategic priorities so that it is consistent with my performance and service delivery contract signed with the Presidency;
§ Prudently increase the level of spending on core operational programmes.
§ Creation of a specialised division adequately staffed with personnel with requisite skills to manage its relationships with public entities.
§ Undertake a comprehensive skills audit

The Department of Communications notes the resolutions presented by the PCC. However, the Department wants to put it on record that all the issues raised by PCC were presented and identified by the department. Actually the Department is at the tail end in implementation some of the issues identified by the PCC and we remain confident that the Department will endeavour to meet the requirements as outlined by the PCC.

The department also observed that the Auditor General’s office presented a report on the financial status of the DoC and its SOEs which unfortunately inflated wasteful and fruitless expenditure figures. This was later corrected by the AG’s representative.

The Ministry of Communications has appointed a service provider who will henceforth conduct a review on remuneration of Board members of SOEs that fall within the ambit of the Ministry of Communications.

I remain deeply excited and want to congratulate all SOEs for a job well done on the presentation of the 2010 Soccer World Cup.

The Department is further humbled by its nomination and election to occupy a seat on the Council of the International Telecommunications Union (ITU), an important quality assurance structure that facilitates the implementation of member states of the United Nations. This happened recently in Guadalahare, Mexico.


Issued on: Sunday, 17 October,2010

For inquiries kindly contact Panyaza Lesufi @ 0833834517 or

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