R50m ‘botched’ contract stalls digital migration

A government agency central to SA’s digital migration has allegedly been left in the lurch by a botched R50m software contract.

A draft internal Universal Service and Access Agency of SA (USAASA) report dated March 1, and made final this week, says the government’s big plan for broadcast digital migration has been hamstrung by a software revamp by the company EOH Mthombo. The beleaguered tech firm was fired by Microsoft amid a corruption scandal in February.

It was reported last week that Patrice Motsepe's African Rainbow Capital [ARC] would dispose of their shareholding in EOH.

ARC spokesman Ainsley Moos said the decision to sell their stake-holding had been months in the making, and had not been triggered by recent events.

USAASA is an arm of the communication department that is supposed to provide infrastructure to the country’s poorest citizens and drive the broadcast digital migration.

The report, seen by Times Select, says “challenges” are preventing the software from running optimally – despite denials from the company that there were problems.

The migration from an analogue television broadcast system to a digital one has been in the works for several years.

The analogue television signal is a technological relic from the 1940s.

The software upgrade was intended to streamline USAASA’s internal business processes, from payroll to stock control – and specifically monitor the rollout of tens of thousands of set-top boxes.

These boxes convert the digital TV signal into an analogue one.

In 2015, EOH scored what was initially a R35m contract from USAASA. But a confidential audit of the contract, initiated by USAASA’s board, recommended it be probed by an independent forensic investigator. The audit found that support and maintenance had been included at the time of the initial procurement, but was then “ignored” when EOH was appointed.

Auditors also found that the contract price had soared by R20m to R55m.

“There seem to be bigger problems that might require a detailed independent forensic investigation,” it reads.

EOH was also given special treatment when they bid for the contract, the report adds.

EOH said the rise in the contract cost was because of “delays” by USAASA.

“We are not aware of any forensic investigation. As far as EOH Mthombo is aware, the system is operating optimally,” the company said.