Business Day column: ICT infrastructure plan could take irregular spending to new heights

According to the auditor-general’s latest report, there was R27bn in "irregular" spending last year. Oh, sorry, that was 2012-13. Last year, it was R25.7bn. Sorry again, that was 2014-15. What actually happened last year was that "irregular" spending rose by 80% to R46bn.

That is the equivalent of nearly half a million RDP houses, enough in three years to give all shack dwellers houses. It would fund, roughly, 460,000 extra police, R6,000 per student more than the average tuition fee for all students, and 185 Nkandlas.

Relax, we are a very rich country. We can afford it and much more. That is why the government wants another giant, nationalised monopoly capable of generating fabulously increased levels of "irregular, fruitless and wasteful expenditure".

To boost our national pride, the Department of Telecommunications and Postal Services (DTPS) published a White Paper which proposes the nationalisation of private telecommunications infrastructure and the creation of a spendthrift "digital development fund". Emergent and emasculated private operators will suck previously private spectrum from the teat of the state.

Stripped of techno-speak, the 177-page Integrated Information and Communication Technologies (ICTs) White Paper is simple enough for ordinary folk to understand. And oppose.

"Spectrum" is the range of wave lengths used to transmit information through the air – to your mobile phone, TV, radio and wifi device, for instance. "Broadband" spectrum is what cellphones use. Think of communication via air waves as people walking back and forth in the same airspace on different floors of a building. "Telecommunications infrastructure" is mainly underground cables which, like phone lines, carry information to transmission towers ("base stations") or via "landlines" to buildings and homes. Spectrum is also used for police and emergency vehicles, planes and ships, and localised gate and car remotes, security guard walkie-talkies and the like.

South African cellphone calls, messages and data would be much cheaper had officialdom allocated spectrum efficiently to cellphone companies ("network providers"). Insufficient spectrum forces companies to raise prices. They must "refarm" old (2G) towers for use by modern (4G/LTE) smartphones. Instead of extending coverage ("roll-out") to new areas and communities, they must build duplicate towers where one should suffice.

The proclivity for irregular spending in government suggests that the proposed ICT boondoggle will take "irregular, fruitless and wasteful expenditure" to new heights, literally and figuratively. But we need not worry, says Mzwanele (Jimmy) Manyi, president of the Progressive Professionals’ Forum. He assured us in a recent SABC debate that irregular spending is no problem because it funds regular stuff like bridges and clinics. He is right. About purely technical "irregularities". And wrong about waste, corruption, patronage and inefficiency.

A bigger problem than "irregularities" is often "authorised" expenditure. Authorised billions wasted on Eskom’s catastrophic power stations, Medupi and Kusile, dwarf the R46bn lamented by our auditor-general. The complex web structures and budgets proposed in the ICT White Paper will, if implemented, be one of the costliest mistakes in our history. Apart from its massive contribution to irregular spending, it will retard technological progress and network coverage. Ideological backwardness will shackle us as we watch the rest of the world advance to the "fourth industrial revolution".

A two-headed monster along the lines of the absurd financial sector "twin peaks" idea is proposed, one for "economic" regulation, the other for "content" regulation. To maximise wasteful expenditure, a digital development fund will endow bureaucrats who know nothing about money to give other people’s money to other people. The devil himself could not think of a better incentive for "irregular, fruitless and wasteful expenditure".

Not surprisingly, Duncan McLeod, a renowned ICT journalist and analyst, reported that the White Paper was met with "universal derision by ICT analysts and experts".

• Louw is executive director of the Free Market Foundation.

This article was first published in Business Day on 30 November 2016

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