The politically connected, controversy-plagued consortium that failed to deliver on the R2bn Gauteng Online Project, SMMT Online (now trading as Cloudseed), may get a second bite at the cherry.

The five-year Gauteng government tender to install Internet-connected computer laboratories in 2 200 schools expired in December last year, but 548 schools still don’t have functioning facilities, according to official figures. Many more schools have abandoned the facilities, saying they are unusable.

A new tender was advertised again on 18 January this year, and prospective bidders have complained that it has been structured in a way that will give Cloudseed a head start. They added that the new contract could be worth billions of rands.

Both the Democratic Alliance in Gauteng and a number of school governing bodies objected that the tender specifications — which require the project to be completed within four days — have been framed to give the previous contractor a head start.

The tender specifies that the “successful bidder must demonstrate his or her capability to deploy a replacement solution on 1 April, ensuring zero interruption of service to the users”.

A source close to the process pointed out that the service is being delivered on equipment that belongs to Cloudseed.

The implication was that a new contractor would have to remove the existing equipment to install a new system, and that Cloudseed could switch off the network whenever it chose.

Chop-chop
The source said prospective bidders were given little time to put together the bids for a tender of this magnitude. “The advert is out [on] 18 January and a month later, on 18 February, it closes,” the source said. “That’s a month. And then a month later [22 March], the evaluation is finalised. So the whole process will take less than two months.”

Gauteng DA education spokesman Khume Ramulifho said he was concerned that the process appeared to have been rushed and he would not be surprised if the same company won the contract.

“The current contractor has an advantage because the education department is already leasing its equipment,” Ramulifho said. “They’ll be reluctant to give the tender to someone else.”

If a new contractor is appointed, all the computers, security and alarm systems installed by Cloudseed will have to be replaced, and migration from the old network to a new one must take place in less than a week.

Ramulifho also charged that the CEO of the Cloudseed consortium, Tebogo Mogashoa, is connected to Paul Mashatile, the national arts and culture minister and ANC Gauteng chairman.

A damning 2010 report by the Resolve Group contained allegations that Mogashoa had received tenders from the department of former Gauteng head of public works Sibusiso Buthelezi, while the latter was his friend.

Buthelezi was the housing department head when Mashatile was provincial housing MEC between 1999 and 2004.

Getting connected
The brainchild of former premier Mbhazima Shilowa, the Gauteng Online project aims to provide every state school in Gauteng with computer laboratories. Its stated purpose is to facilitate learning, address the digital divide and provide all state school pupils with an e-mail address and free Internet access.

The project was initially handled by the provincial education department at an estimated cost of R1bn. In 2007, it was transferred to the Gauteng Shared Services Centre, which awarded the initial R2,1bn contract to SMMT Online.

From its inception, the contract was marred by controversies, including accusations that the tender was irregularly awarded and the consortium was incompetent.

The main accusations centred on the speed of the tender process, which took less than four months from advertisement to award, and the fact that one person — Mogashoa — had shares in three of the companies in the consortium.

These were SMMT Online (Cloudseed), of which he is CEO, and Tebfin and Beget Holdings, of which he is nonexecutive director.

Other members were Hawkstone Marketing, Sifikile, Self Empowerment International, Enlighten Security and Vimba Security.

The Gauteng Shared Services Centre responded that no law prohibited someone from being a director in more than one company and that procurement rules allow companies to submit joint venture bids.

School governing bodies branded the project a flop when it was partly implemented in some schools and not at all in many others. Last year, the DA called for it to be scrapped.

Kathy Callaghan of the Governors Alliance, a federation of governing bodies that represents about 384 schools, described the project as a disaster.

“There have been many shortcomings and even today the project has not been fully implemented. It was a wonderful idea but was never rolled out properly,” Callaghan said.

After endless complaints from schools, Callaghan said the alliance had advised its members not to use the computer labs from Gauteng Online.

“Our members were frustrated; they would report a problem and it was never sorted out,” she said. “In the end, the project was more trouble than it was worth.”

‘Gauteng Offline’
Matakanye Matakanye, spokesman for the National School Governing Body, which represents poor schools, said he did not understand why the tender had been advertised again.

Matakanye said the schools body had seen no benefit from the project. “We call the project Gauteng Offline,” he said. “There is never any connectivity; we’re always told the server is down. Most of the labs are white elephants.”

Security was an additional headache, he said. “Computers were being stolen and were supposedly replaced within 21 days, but this didn’t happen. We asked the education department to hire more security and draw patrols from the community.”

Cloudseed CEO James Ainslie dismissed the criticisms, saying “no one had been able to produce evidence that we were appointed in any underhanded manner” and that “the tender was awarded in an open, competitive and fair bidding process”.

Ainslie said that despite many challenges the company had achieved what it had set out to do. “We have fully installed specially designed computer facilities and enabled connectivity for in excess of 1 600 Gauteng schools.”

Each school was “the recipient of a laboratory of 25 workstations, one server for teachers and 24 for pupils,” he said. “This means that we have completed our current requirements for the roll-out of schools, which was phased in accordance with project delivery schedules … jointly agreed on [between] ourselves and the Gauteng department of finance.”

‘Major success’
He said the security issues experienced early in the project had been resolved, “with major success [in] bringing all the burgled schools back to function and the implementation of integrated security measures that have slowed the rate of burglaries … significantly”.

Ramulifho last year called for the termination of the contract following an internal audit by the provincial finance department. This concluded that the project’s primary objectives had not been achieved, schools were not able to “effectively implement a technology-enabled learning environment”, the project’s computers were underutilised and the department was not getting value for money.

Last week, he said he was disappointed to see the advertised tender had basically the same scope.

“The project started in 2001 and is not functional; I thought the new tender would focus on new technology. This seems like an extension of the old contract,” Ramulifho said.

He said under the current contract, Cloudseed provided 25 computers per laboratory, but according to statistics an average classroom contained about 40 pupils.

“Our approach now would be to provide each pupil with a tablet … this approach can sort out the issue of the text book shortage as you can download books on to the device.”

Buthelezi, the former Gauteng public works department head, was suspended by MEC Ignatius Jacobs in July 2009, after he was accused of handing contracts to friends and relatives.

Premier Nomvula Mokonyane later reinstated him and awarded him a R1m golden handshake.

The tender specifies that the successful bidder must demonstrate his or her capability to deploy a replacement solution on 1 April, “ensuring zero interruption of service to the users”.

The Mail & Guardian asked the Gauteng finance department whether it was happy with the implementation of the tender or whether the scope of the tender had been framed to favour Cloudseed.