JSE-listed technology services group Gijima appears to be no closer to resolving its dispute with the department of home affairs over the validity of the R2,5bn “Who Am I Online” contract.

The group has advised shareholders that it is still seeking a “commercial resolution” of the dispute in a bid to avoid taking legal action.

The controversial project involves the modernisation of 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 that the deal is invalid. However, Gijima maintains that the contract is valid and enforceable. It has sought legal advice on the matter.

The department has not indicated why the contract was declared invalid.

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.

Gijima is working with international companies — including IBM, Siemens and identity management specialist Daon — to provide services to home affairs.

In a trading update, Gijima says shareholders can expect some good news in its upcoming annual results.

The group says basic earnings per share (EPS) and headline earnings per share (HEPS) could be up by between 35% and 55% compared with the same period last year, excluding the impact of foreign exchange translation differences that affected earlier reporting periods.

Gijima says these numbers take a conservative approach to recognising the revenue earned from the still-disputed “Who Am I Online” contract. — Staff reporter, TechCentral