The department of home affairs has less than a month to decide on a last-ditch proposal presented to it by JSE-listed IT services group Gijima over the disputed R2,5bn “Who am I Online” technology project.
Gijima CEO Jonas Bogoshi says the group now has an idea of what government’s needs are and it has presented a final proposal to the department.
However, he says because the contract has such a dramatic impact on the group’s revenues, the proposal has a time limit attached. Government now only has “weeks” to either agree, or cancel the contract.
Government still owes the group R237m for work it has already done on the multibillion-rand project.
If the proposal is not accepted, the group will pursue litigation.
Gijima was awarded the controversial project in 2008 to modernise home affairs’ core IT systems. It is Gijima’s largest deal with government and makes up 15% of the group’s annual revenue.
The system is expected to link into the Home Affairs National Identification System to the police, the national healthcare service and emergency services.
Five months ago, home affairs cancelled its contract with Gijima, contending the deal was invalid. However, Gijima maintains the contract is valid and enforceable. It has sought legal advice on the matter.
Bogoshi says the cancellation took the group by surprise because he had met personally with the department’s director-general just the day before.
He says that the department’s concerns relate to the Public Finance Management Act. Home affairs is not sure the person who signed the contract had the right to procure the expensive service.
The project has been riddled with controversy since its inception in 2007 and has faced spiralling costs from the start. The original bid was valued at R1,9bn.
Bogoshi says Gijima could have taken the legal route when the department canned the contract. However, the business was hoping a commercial resolution could be found.
Regardless of whether government accepts the proposal, Gijima has decided to scale back the division that was handling the project.
Bogoshi says the group is moving most of the staff into other areas of the business, leaving only a skeleton crew behind.
He says most of the development work has been done, which makes it easier for Gijima to refocus staff members.
Bogoshi is confident government will accept the final offer. “We have a better understanding of what it is government wants from us and our proposal is in line with that.”
He won’t say what’s in the proposal. “These are delicate discussions and we are trying to be as careful with it as possible,” he says. — Candice Jones, TechCentral
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