GCIS MINISTERIAL MEDIA BRIEFING
Minister of Communications
11 September 2001

Documents Handed Out:
Minister’s Media Briefing September 11, 2001 [See Appendix below]

Questions by the media and replies from the Minister, Dr Ivy Matsepe Casaburi

(Q) Does the government have any fixed amount as a subsidy to the Post Office?
(A) There is no amount agreed upon in rands, but government has accepted the principle of subsidy. Subsidy will be given on a circumscribed basis.

(Q) Is it true that Post Bank is moving away from Bloemfontein as its headquarters.
(A) Yes, there is that intention from the Post Office. It is informed by the fact that we are in a 21st century where technology is dictating terms. They intend to move Post Bank headquarters to a place that is much more technological advanced than its current headquarters in Bloemfontein.

(Q). What are the major issues the E-Commerce Bill seeks to address?
(A) It seeks to address security for electronic transactions. It seeks to give electronic transactions the same status as traditional paper-based and oral transactions. This is to give them legal effect as any properly executed transaction.
It excludes issues of Customs Tax
It seeks to recognise digital signatures
It provides for e-intellectual property rights related matters
It provides for the registration of domain names
It provides for the establishment of a dispute resolution mechanism over domain names
It recognises the establishment of a section 21 company.

(Q). Are you able to quantify the corruption that is being investigated in the Post Office?
(A) Since 1999 we have been investigating different concerns in this parastatal. As you know the Post Office is a very big institution. We started investigating in the provinces and that sent a signal that there are problems not only in these provincial centres. It appeared the there are problems everywhere. That has made us extend our investigation to whereever our leads take us. Given the complexity of problem, the process became very slow. It is only this year that the process is moving at a much faster pace. Part of this acceleration can be attributed to the new board that knows what questions to ask to aid the fasttracking of these investigations. Bringing in international investigators and auditors has also assisted progress. The investigations have started to yield results in that we have saved R200 million that would have ordinarily been lost if things were done in the old way. Given all this you will agree with me that it is not possible to quantify the corruption until investigations are complete. The bad news about these investigations is that they have placed a lot of publicity on the Post Office. This has made it difficult to attract senior managers to work in this institution. It is only those who have the nation at heart who have remained attracted to work for the Post Office.

(Q) Can you confirm the reports that Post Office borrowed one billion rand from Post Bank?
(A) It has been the practice that the accounts of the Post Office, Post Bank (and Telkom during the time when it was part of the Post Office) were held in one place. There are number of problems that might have contributed to this picture. These institutions were then sharing one Information and Technology System, with almost the same managers. It is this confusion that might have contributed to this highly publicised one billion rand loan. It is good that this beginning to change as the new board is questioning these practices. In short, I cannot confirm the one billion rand loan. The investigation that is currently going on will shed light on this matter.

(Q) Concerning the R200 million that has been saved, is this saving due to anti-corruption systems or is it due to increased efficiency?
(A) This saving cannot be attributed to only one thing. There are a range of things that contributed to this saving. For instance, with the new board there are contracts that have not been renewed that would have been signed in the old order and cost us millions. The installation of new board that really knows what it has to do can be one factor contributing to this saving. The implemented strategies advanced by investigators and auditors can be a factor also. In short, at this stage it is hard to say this saving is attributable to one factor.

(Q) Can you tell us more on the divorce settlement between New Zealand Postal Services and South Africa?
(A) The Post Office has been granted the power to issue a statement on this matter. This statement will be issued today or in the next few days.

(Q) What made this marriage between the New Zealand Post Office and South Africa Post Office fail? Is it due to one party not doing something properly? Or it was just an inappropriate venture and we do not need it anymore?
(A) This again is still a matter under investigation. Whether we need it again will be informed by a report we are due to get. The Cabinet mandated me to investigate this matter in its entirety. We will investigate how we came to enter into this contract, what were the reasons for us to conclude this contract, what did each party do right or wrong. This will inform us if we need this relationship in future and if so, what can be improved to ensure the smooth running of this venture or relationships of its kind.

(Q) Was the one billion rand loan made at bank loan rates?
(A) At a certain stage, evidence indicated that it was done on commercial bank terms. Since this has been ongoing for ages we need to get an in-depth understanding of this situation for us be able to give clear and detailed answers.

(Q) Do you have any specific areas that will get preference regarding the subsidy?
(A) I think the areas that will enjoy preference would be the areas that will increase access to international markets. That is if any group of people want to use Post Office services either to export products or import anything that will facilitate their production, that programme must get subsidy preference. This includes access to electronic means of posting. Another area that I think will have to get preference is an area that will increase access to postal services (e-mail, faxes, telephone, internet etc) for those who have been previously marginalised.

(Q) What is holding up the Broadcasting Amendment Bill. Are you awaiting information from SABC or from somewhere else?
(A) We need to ensure that we know exactly the role of the SABC on social issues. The SABC should be viewed with transformation eyes as it is undergoing transformation. Before we push this Bill, we need to determine what is the social responsibility role of the SABC. What role is the SABC playing to promote the Millennium African Plan and the newly formed African Union? What is the role of SABC in the creation of a non-sexist society, its role in promoting equality of languages, in the creation of a non-discriminatory society? When we are clear on the social responsibility role of the SABC, we can then know how to take this Bill forward.

(Q) What are the social obligations to be imposed to Second National Operator?
(A) They are not yet finalised. These will be inserted in the licence conditions, which is coming later.

(Q) What is the profile of the corruption in the Post Office, is it syndicates targeting post offices, irresponsible individuals, lack of skills, lapse of systems and so forth?
(A) I think by now the answer is known. It is a number of these things. The investigations are at different levels and very complex. For sure they will find a number of problems that are contributing to this corruption. When the report is done, we will have a very clear view of the actual happenings in the Post Office.

Appendix:
Statement by the Minister of Communications Parliamentary Media Briefing, Cape Town,
11 September 2001.

I delivered the budget vote of the Department of Communications, Vote 25 for the 2001/2002 financial year. Today, I want to report on the progress we have made and on the work that still needs to be done since the budget speech in May in order for us to achieve the objectives as stated in the budget vote.
1. Universal access and community outreach
In our budget speech we committed ourselves to accelerate the rollout of the infrastructure and services to under-serviced areas.
· To date 6 Citizens Post Offices have been established since the launch of the Soshanguve pilot in September 2000. We envisage launching 20 others by March 2002.
· 8 MPCCs have been established of which 3 have been launched. The remaining are going to be launched in October.
· 100 Public Information Terminals (PITs) have been installed in post offices in all provinces and 91 of them are already online. The other 9, which are offline, are based in the MPCCs where Telkom is currently installing Pots Office's wide area network.
· The Universal Service Agency (USA) is currently assessing the operations of the telecentres as part of the review process aimed at encouraging maximum use of telecentres in communities. A full report will be out before the end of the year.
· 94 DOC Web Internet Laboratories have been established in schools and universities. 10 DOC Wils are involved in the distance learning project that seeks to train unemployed graduates in java programming skills. The participating institutions have a capacity to produce 475 graduates per year.
· The department has rolled out 26 community radio stations around the country as part of its development programme. 4 other stations will be installed in the Northern Province, Free State and Eastern Cape before the end of the year.
· Production hubs have been established in partnership with community radio stations and community based organizations to assist stations in the production of local content. The hubs are geared towards the following sectors: disability, children, women and HIV/AIDS. 21 community radio stations are involved in this programme.
· The department provides technical support and advice in the development of the Smart Card, which is being co-ordinated by the Department of Home Affairs.
· Draft terms of reference for the AIDS Portal have been developed for finalization with GCIS, Department of Education and the Department of Health.

2. Legislation
· The telecommunications policy has been finalized and the Telecommunications Amendment Bill is before parliament. The restructuring of the Public Emergency Communications has been incorporated into the telecommunications policy and the Bill.
· The Postal Amendment Bill is also before parliament. The Bill deals with the clarification of the mandate of the Postal Regulator.
· The Broadcasting Amendment Bill is being prepared for presentation before parliament pending the decision on the role and social obligations of the SABC.
· The Electronic Communications and Transaction Bill is being finalized for presentation in parliament. The e-commerce enabling legislation will be finalized before the end of the year, as indicated in the President's State of the Nation Address.

3. Portfolio organizations
SABC
The restructuring of the SABC is on track. We are in the process of employing people to assist with the restructuring of Channel Africa and Bop Broadcasting.

The SABC is also going ahead with the extension of the radio and television signal to communities, which are currently not being serviced. The public broadcaster has just finished the extension of the Ligwalagwala FM signal to cover the Mbuzini area in Mpumalanga. This will cater for a population of about 230 000 people who have never received an FM signal.

SAPO
The investigation into corruption at the SA Post Office is going ahead. I want to clarify that the investigation is aimed at uncovering corruption from the time even before the arrival of the New Zealand Post International. We decided to embark on a full-scale investigation because of the proportion of corruption at the Post Office. Indeed addressing the situation at the Post Office requires the contribution of all stakeholders. In this regard, we encourage all those with information that will help us to bring an end to corruption to come forward and co-operate with the investigators and give information that might help them.

The issue of the use of the Postbank money for other activities, is a reflection of a legacy where all business units use the same accounting mechanisms. Even when Telkom was part of the Post Office, there was no clear separation of the accounts. The management of the Post Office is currently sorting out all the accounts to avert further confusion.

In the long term, we are going ahead with the restructuring of the Post Office and the plans to corporatise the Postbank.

The Post Office management is also working on the break-even strategy, which will be presented to my office in the near future.

The strategic management partnership with the New Zealand Post International has been terminated on the basis of the Cabinet recommendation. After the Cabinet meeting of 13 June the minister mandated the board and management of the Post Office to explore legal mechanisms to end the contract. The Post Office was given the responsibility to conclude the process because the contract was entered between them and the New Zealand Post International. The process will be finalized by the end of this week.

Government and the Post Office are engaged in discussions with regard to the re-introduction of the subsidy. The subsidy would be introduced on the basis of the mandate of the Post Office and will be directed towards meeting universal service obligations.

Sentech
Sentech's licence is being extended to include the provision of the international gateway telecommunications and multi-media services. This is going to benefit Africa as Sentech will contribute in linking the Africa with other continents.

Sentech in partnership with the Development Bank of Southern Africa produced the Glossary of ICT terms in English and Zulu. This initiative is very crucial because the use of African languages in ICTs is one of the requirements for the African Renaissance to succeed.

Independent Communications Authority of SA
ICASA is preparing itself to develop regulations for the introduction of the Second National Operator and SMMEs.

National Electronic Media Institute of SA
NEMISA will be formally launched before the end of October. The launch will coincide with the graduation of 31 students who completed the 18 months training programme on radio and television production.

Univeral Service Agency
The USA will be restructured in line with the new telecommunications policy. Its mandate will entail the monitoring and evaluation of the rollout of universal service obligations by the telecommunications operators. A board of not more than 7 members will be established to oversee the work of the agency.

Telkom
Since the restructuring of Telkom started significant progress has been made in the roll out of universal service obligations. Telkom has alreadu connected 200 schools in historically disadvantaged areas to the internet and will continue to expand on these targets. Today, after more than 1,3 million new connections, 35% of all households are linked to the national telephone system. By the end of the financial year 2001/2, it is envisaged that 75% of all households will have access to a telephone.

4. International work
On 12 to 16 November South Africa will for the second time, host the ITU Africa Telecom 2001. For the first time, the conference will include a Youth Forum where the youth representatives from various African countries will be given an opportunity to deliberate on issues around Youth and ICTs. We believe that this will go a long way in getting young people to be part of the information society and of the MAP/ New Africa Initiative.

The department and the World Economic Forum (WEF) are working closely with the Southern Africa Development Community (SADC) in the establishment of the E-SADC Task Force. The aim of this Task Force is to make ICTs a priority for national and regional socio-economic development.

Regarding the Millennium Africa Plan, the following projects (and areas) have been identified for implementation: e-schools project, e-health project, policy development village, capacitating the civil service, Vijana DOT Force; women and ICTs.

The G8 leaders, in their meeting in Genoa this year, ,adopted a plan of action to bridge the digital divide. It was agreed that South Africa will be a pilot on the formulation and implementation of e-strategies. The department is engaged in processes to ensure that this resolution is implemented.
For more information contact Robert Nkuna on 082 887 6874