Listed outsourcing company Gijima may have no option but to sue the Department of Home Affairs over the disputed 'Who am I' contract, which was cancelled in April.
The Department of Home Affairs' termination of the multibillion-rand 'Who am I Online' contract in April came as a surprise to Gijima, as it had already been paid millions for work completed.
The project aims to replace outdated paper-based and manual systems with electronic processes. At the time, the department said the contract was invalid, and could not be enforced.
Gijima has been in discussions with the department to try and resolve the impasse since May, in a bid to avoid having to go to court to have the deal enforced. Soon after Home Affairs canned the deal, Gijima staff members were locked out of Home Affairs until the State Attorney intervened.
Last-ditch bid
However, this morning CEO Jonas Bogoshi told investors and analysts that the dispute may end up in court if its latest offer is not accepted within the next few weeks. Gijima has made an offer to the department that it believes is in line with what Home Affairs wants, says Bogoshi, without providing further details.
The 'Who am I' deal is worth about R2.5 billion and Gijima has earned about R500 million in revenue from it each year since work started in July 2008. FD Carlos Ferreira says, if Gijima loses the contract and does not do any future work, it would miss out on just over R1 billion in revenue.
In its financial year to June, Gijima invoiced R476 million, of which R237 million has not been paid for by the department. This amount relates to work completed in the second half of the year until Gijima stopped working on the contract in June. However, says Bogoshi, it has performed in terms of its contractual obligations so far.
Since inception of the deal, Gijima has earned R1.18 billion from the project, which is 14% of its total revenue of R8.5 billion during the same time frame.
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'Who am I' weighs on Gijima
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