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Presentation to Portfolio Committee on Telecommunications & Postal Services QUARTER 1

Presentation to Portfolio Committee on Telecommunications & Postal Services QUARTER 1 04 August 2015 P Kwele Chief Executive Officer. Delivery on Mandate. (MTSF-Outcome 6 and enabler of outcome 1&2).

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Presentation to Portfolio Committee on Telecommunications & Postal Services QUARTER 1

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  1. Presentation to Portfolio Committee on Telecommunications & Postal Services QUARTER 1 04 August 2015 P Kwele Chief Executive Officer

  2. Delivery on Mandate (MTSF-Outcome 6 and enabler of outcome 1&2) Network Infrastructure Broadband Infraco will continue to develop and maintain connectivity infrastructure in South Africa and neighbouring countries • To be achieved through major projects being rolled out and will add more than 1000km of fibre and more PoPs • Areas of partnerships include PRASA (for metro fibre access); USAASA (for service rollout to underserviced areas) and SITA (for key government connectivity requirements). • Expand availability and Access to Broadband Infrastructure (Broadband InfracoAct) • Enable regional connectivity • Implement projects of National Interest • Develop strategic Partnerships (MTSF Outcome 4) Economic Transformation Broadband Infraco will create opportunity for Previously Disadvantages including SMMEs in the economy • Increase targeted procurement • Facilitate job creation • Facilitate Entrepreneur development Achieved through implementation of the procurement strategy and measured quarterly Financial Sustainability Broadband Infraco will endeavour to be financially sustainable by 2017 The adoption of the Build, Grow and Expand strategy is underlined by a principle that infrastructure deployed has to be utilised. Products have to priced optimally and costs reduced • Increase utilisation of network • Reduce cost of sales • Grow revenue • Achieve ISO 9000 accreditation and ERP optimisation • Optimise capacity and capability of human resources (MTSF Outcome 5) • Effective legal and governance structures Operational Efficiency; Effective Human Resource Practices; and Enterprise Risk Assurance Drive a culture of business process and performance management

  3. Performance against predetermined objectives Slide 3

  4. Performance against predetermined objectives Slide 4

  5. Financial Overview : Performance – Quarter 1 Slide 5

  6. Financial Overview Cash Flow Position Slide 6

  7. Financial Overview: Funding Initiatives Mechanism Elaboration An MTEF application in support of the BBI capital Asset renewal and Fixed Capital Formation programmes for value R1.8 billion over the medium term expenditure framework has been submitted to DTPS. Guarantee for R243M has been submitted to both shareholders ShareholderFunding 1 Funding Challenges 2 Funds have been usurped by efforts to strengthen the asset Balance sheet not strong – Conversion of shareholder loans into equity No credit history • The DBSA has advised that the SITA business case is undergoing governance processes, the first of which presentation to the Business Development Committee. DBSA 3 • The AfDB has been provided with the Pre – Investment report. The Bank will await the RSA stakeholder governance processes before conducting a due diligence for fundability of the projects. AfDB 4 USAASA The application has been approved by EXCO and submitted to USAASA. 5

  8. Procurement Overview: Outcome 4 BBBEE SCORECARD The Company to procure goods and fibre optic cables for projects that were already committed to service customers

  9. Network Infrastructure: Outcome 6 Actual Fibre rolled out per Province Slide 9

  10. Human Capital: Outcome 5 Highlights Demographic profile • Productivity analysis and it assisted with accurate review of human resources capacity for operational requirements. Resulted in redeployment of HR from areas of less need to high pressured areas. • A saving of 73% in the Maintenance department on overtime at double rate was realised. • A saving of 17% was realised in the Operations department on overtime, standby & nightshift combined. • Successful implementation of the second phase of the Multi-Year agreement for 2015/16 cost of living adjustments which resulted in a saving of 2.52% on labour cost due to salary capping at 90th percentile. • Signing of the Recognition Agreement and the Agency-Shop Agreement during the month of May 2015. • Refresher sessions on Performance Management resulting in 114 employees trained in 14 sessions including executives. Training sessions covered VIP system e-Performance Management module application. • Seven out of ten (7 out of 10) interns completed the internship programme at the end of June 2015. Female 36% Total Gender split Male 64%

  11. Internal Controls: Irregular Expenditure

  12. Governance: External Audit Findings 2013/14

  13. Strategic Risks Slide 13

  14. Thank You

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