eNatis hurts arivia deal

The widely-criticised implementation of the new electronic National Traffic Information System (eNatis) has commentators sceptical of the benefits of acquiring arivia.kom.

The Tasima Consortium, led by arivia subsidiary Face Technologies, won the R365 million tender in 2001 to replace the original Natis. Perseus Computer Systems, Persetel Q Data and Comparex implemented the first generation of the system in the early 1990s.

Through a series of mergers and acquisitions, the three companies ultimately came under the umbrella of Business Connexion (BCX) as it is known today. BCX - alongside T-Systems, Accenture, Dimension Data and Siemens Business - has been shortlisted as a bidder for arivia.

The implementation of the eNatis system has been in the media spotlight since last month. Plagued by downtime, inefficiencies and capacity constraints, the new system has infuriated motorists, embarrassed the transport department and placed pressure on Tasima to get the system up and running smoothly.

Although the extent of the penalties incurred by Tasima have yet to be revealed, the Cape Argus last week reported the transport department had threatened to sue the contractor "as a last resort", if it failed to sort out the problems.

An analyst, who prefers not to be named, says this situation is similar to that faced by the contractors involved in the original Natis implementation.

"The penalties incurred by the original consortium nearly killed the companies financially. If penalties are to be imposed again - and I can't see how they won't - then arivia becomes far less attractive," he says.

BCX CEO Peter Watt agrees the original Natis system did not produce the originally expected benefits.

"For many years, Natis made no money at all. In fact, it's only been a profit-generator in the last five years. It would be reasonable to expect the eNatis system will result in penalties: it is long over its original delivery date and its wide base of stakeholders would have required the implementation of the system went smoothly."

He adds: "What I can't understand is the new R30 charge they are adding to the licensing process - this is apparently to cover maintenance and unplanned expenditure. We maintained the Natis system for over 15 years and we never passed on those costs."

Watt is not the only bidder proceeding cautiously as far as the arivia acquisition is concerned.

Dimension Data group CFO David Sherriffs last week said the company was alert to the risks inherent in acquiring arivia.

"Arivia provides us the opportunity to provide a full service offering to customers in SA, as well as gaining an entry into the parastatals through the Eskom and Transnet contracts. But, while these are good opportunities for us as a group, we are also extremely conscious of the risks. We are proceeding cautiously," he said.

Although GijimaAst was interested in taking a look at what arivia had to offer, CFO Carlos Ferreira confirms it was unsuccessful in getting a place on the shortlist. The troubles surrounding the implementation of eNatis will "clearly have a negative pricing impact", he notes.

"The attraction of arivia has always been the two contracts. However, there are a whole lot of other things that would make these deals unattractive. Like the people and service issues, the eNatis implementation has again raised the questions of competence and calibre of some of the organisation's staff. Arivia is known to be bloated and over-staffed, and it is also highly-unionised. The company that eventually acquires arivia will need to deal with these issues."

However, staffing does not bother Watt: "I would hate to make a general statement about the skills at arivia. It's commonly understood that SA has a skills shortage, but to me it's as important what you do with your staff as having them in the first place."