The technology supplier to the City of Johannesburg and the South African Broadcasting Corporation, Masana Technologies, has filed for liquidation. It blames its demise on the city's failure to pay for its services.
Masana, which has been dogged by scandal, was formed when the City of Johannesburg decided to outsource its IT function about a decade ago. The R800 million contract went to Masana (an empowerment venture) and its partner, IBM.
However, the company has filed for voluntary liquidation and a provisional order was handed down on 21 August.
Human resources executive Reggie Mshengu says the company has been battling to receive payments, including from its biggest client, the City of Johannesburg.
As a result, it has been unable to honour its obligations and the city now needs to replace Masana in the contract, which runs until next September. Mshengu says the new vendor should be announced by the end of the month, and he understands Dimension Data is in the running.
Gabu Tugwana, director of communications at the city, states: “We do not accept that the city has not been paying Masana. It is established practice for the city to pay its service providers, including Masana, for services rendered, and we have no intention of interfering with the current ongoing liquidation process of Masana through the public arena.”
Lost jobs
A Masana receptionist, who did not want to be named, says some staff members have been retrenched and the rest of the company has not been told what will happen now. She says about 150 people are still working at the company. On its Web site, Masana says it has “over 200 IT practitioners and support staff”.
Mshengu adds that some of the staff may be retained for the city contract, but many of the support staff and management will be out of a job. “Top management don't have a future beyond September.”
Of the nine executives listed on the company's Web site, one is on maternity leave and only two others are still at Masana.
Masana's partner companies include IBM, SAP Africa, Internet Solutions, Dimension Data, EOH, Symantec, Cisco Systems and Dark Fibre Africa.
Rumours in the market indicate IBM may take over some of Masana's business or contractual obligations.
However, IBM SA media relations manager Bandile Sikwane says the company “does not comment on rumour and speculation”.
Barge pole
Whether IBM would want to take over the company is open to debate, as Carte Blanche recently exposed Masana as being behind ratepayers receiving over-inflated and erroneous accounts.
In July, the television show detailed the billing mess in the City of Johannesburg, and attributed it to Masana's decision to implement a SAP system.
It quoted Democratic Alliance councillor John Mendelsohn as saying: “The city launched what was called Operation Bakama and that was to get all information technology onto a single interface called SAP.” He said the system has failed.
The company also lists Freedom Park, the City of Tshwane, Johannesburg Roads Agency and Pikitup among its customers.
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