IT dither costs R9bn - report

By Leon Engelbrecht for SITA
Johannesburg, 31 Mar 2008

The government has yet to comment on a report in the City Press yesterday that a bungled IT deal has already cost the state R9 billion - with more to come.

The contract was awarded to replace the Department of Social Development's (DSD's) Social Pension system (Socpen).

The paper says social development minister Zola Skweyiya has confirmed that delaying implementing the system presented fraudsters and thieves a golden opportunity to fleece the taxpayer and they were doing so at a rate of R1.5 billion a year.

A 2006 SA Press Association report adds that the State IT Agency (SITA) called for bids in 2001 under tender 0082. The wire agency added that Skweyiya subsequently awarded the deal to IT Lynx, headed by former ANC exile Obbey Mabena.

City Press says Mabena's consortium was to install a smart card-based system that "was meant to ensure that pensioners did not have to carry cash every month-end or visit pay points".

But finance minister Trevor Manuel apparently baulked at the system's R300 million price tag, which he reportedly considered excessive.

The paper adds that president Thabo Mbeki, in November 2006, ordered the two ministers in writing "to compile a joint report on ways in which any issues delaying the replacement of the Socpen system could be resolved in the least-costly, but most effective manner". By then, IT Lynx was already suing government.

Mabena told the paper he had secured a date "for oral arguments to be heard in the Pretoria High Court in March 2010 against Skweyiya and Manuel". He also threatened to interdict the state from awarding the deal to anyone else pending an outcome in the case.

No response

SITA this morning declined to comment, as did the DSD.

"SITA considers it prudent not to comment on this matter as it will be heard before an independent judiciary," said spokesman Elton Fortuin. "Notwithstanding, the conclusion of contracts with vendors resides with the relevant government departments, while SITA is responsible for administering the tender process."

DSD spokesperson Lakela Kaunda said by SMS "we have been advised by our legal team not to comment on the matter as we would be undermining court processes".

Neither Mabena nor his lawyer, Alpheus Denga, could be reached for comment.