National Treasury has denied funding to state-owned enterprises (SOEs) under the Department of Communications (DOC) for the digital terrestrial television (DTT) project.
The department presented the revised Strategic and Annual Performance Plans for the Medium Term Expenditure Framework (MTEF) period 2012/13 to 2014/15 to the Parliamentary portfolio committee last week.
The broadband project, DTT, and review of the National Integrated ICT Policy were identified as the department’s flagship programmes.
Sam Vilakazi, acting deputy DG of finance and ICT development, said an analysis of the funding requirement for DTT indicated that the SOEs had a certain amount of funding available but this was not sufficient for completing the project.
Members were concerned about the significant funding shortfalls for the DTT project and ICT infrastructure. Other questions concerned the target dates for distribution of the set-top boxes (STBs) and the broadband project.
The department said the total funding shortfall over the period 2012/13 to 2015/16 for the South African Broadcasting Corporation’s DTT project was R3.9 billion, R140 million for Sentech and R2.6 billion for the Universal Service and Access Agency’s STB programme.
Members suggested the department review how the cost of the DTT project was originally calculated.
The department said it requested additional funding from Treasury. The SOEs’ funding requirements and requests had to be supported by business motivations.
In most cases, Treasury declined to approve the additional funding. The SOEs were requested to improve on the business cases for re-submission to the Treasury in July.
Democratic Alliance shadow minister of communications, Marian Shinn, questioned why projects are started before adequate funds are secured.
Vilakazi said the DTT project has commenced and STBs will be available for distribution in 2013. Sentech is engaged in providing the necessary infrastructure and a digital content library has been started. The DOC hopes sufficient funding will become available over the MTEF period to implement the DTT project.
Norman Munzhelele, chief director of ICT policy development, explained that the broadband project included different elements. The review of the policy on broadband has commenced, consultation with stakeholders is taking place, and the review is expected to be finalised by the end of 2012.
The outcomes of the review will allow for the development of a business plan. The DOC is considering alternative funding models for the necessary investment in broadband infrastructure; for example public/private partnerships and investment by the private sector.
The department said the recent colloquium highlighted the need to amend the Electronic Communications Act. Most legislative changes would be aimed at clearing existing bottlenecks, resolving issues concerning inter-connectivity, sharing and competition in the sector.
The Broadband Master Plan, once finalised, will ensure that rural connectivity is delivered in a coordinated manner with the participation of Sentech and Broadband Infraco.