Masana Technologies' staff will no longer provide IT services to the City of Johannesburg from the end of this month. However, the city has yet to sign an interim agreement with a company that will carry over Masana's contract.
In August, the company filed for liquidation, claiming the City of Johannesburg owed it up to R90 million for work done.
Liquidator Ruben Miller, from RMG Trust, says once Masana employees go off site, the city will not have anyone to maintain its IT services.
Masana applied for voluntary liquidation last month after the city did not honour 1 200 invoices, amounting to at least R64 million. Masana, however, claims the city owes it R90 million.
Miller says without Masana staff, the city will not have anyone to maintain and support the IT system, and this could affect areas such as billing and revenue collection.
However, Gabu Tugwana, communication director, says the city will not be stranded without IT services. “That's impossible... Can you imagine a world-class city not having IT services?”
Tugwana says he will not debate the matter in the media as Masana's liquidation is before the court, but says there is an agreement in place to deal with the impact of the liquidation. “The city will be running.”
Risky business
Masana has been providing IT outsourcing services for the city since 2005. This included revamping the IT infrastructure and application environments from 12 separate systems into one. It also provided desktop support.
On its Web site, it says it provided the city with a SAP R/3 ERP financial implementation, a human resources program, and was involved in the ongoing implementation of a SAP revenue system - the Phakama Programme.
Miller says this will cease at the end of the month, and no other agreement has been entered into yet. He explains the city was meant to sign an interim agreement with Dimension Data on Friday, but claims it is a long way off from a deal.
Miller is concerned there is no interim agreement in place, as he is also a resident of Johannesburg. He says a handover will take time and could be problematic.
He says the council has also been in talks with Dimension Data to take over the remainder of Masana's contract, which would run for another year.
Dimension Data spokesman Kevin Handelsman says: “We don't respond or comment on the affairs of our clients.”
Meanwhile, the city has agreed to pay Masana the R64 million both parties agree is owed. There is a dispute as to another amount of R26 million, which will be held in trust until the issue is resolved.
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