Joburg hires ICT specialists

The City of Johannesburg (COJ) will spend up to R750 million on a panel of IT specialists.

However, the panel will not assist the problematic Joburg billing system, despite the city being owed R12.1 billion by big business, government entities and households, due to the billing crisis that plagued many residents for more than a year-and-a-half, according to a National Treasury report.

The Democratic Alliance (DA) estimates the billing system has so far cost the city around R1 billion. The city would not give any indication of the costs, despite several requests.

Acting CIO of the COJ Abraham Mahlangu says the tender was awarded to 31 ICT companies in February.

The panel will work on various ICT projects and provide advisory services that the city may require as and when business requirements for such emerge. The contract is for a period of three years.

The invitation for tender proposal A392 called for proposals for “inclusion in the panel of IT specialists to assist with IT-related projects in the City of Johannesburg”.

Mahlangu said the figure of R750 million is a framework cap that all projects for the duration of the framework contract shall not exceed this amount.

“It was merely a cap and not an award amount, as there is no budget already approved, nor is there any list of projects already decided and approved.”

He explains that all projects that come up will still be subject to business cases or motivation, budget availability and other project life cycle requirements before being commissioned.

DA shadow member of mayoral committee for finance Patrick Atkinson says the COJ couldn't give sufficient information on the tender when questioned.

“When they were asked why so much money and if it was financially viable, they didn't have the answers.”

He says R750 million is a huge amount for the city.

“We are quite flabbergasted that they want another R750 million. That's why we need more information. It seems inconceivable that they would need so much more. We find it quite baffling that they would need to spend this amount of money after spending R1 billion on a system that still doesn't work properly.”

The COJ received a qualified audit for the 2009/10 financial year. DA shadow MEC for the Municipal Public Accounts Committee (MPAC) John Mendelsohn says this is due to the billing system.

“The rollout of Programme Phakama caused lots of distress. The embarrassing qualified audit may happen again due to Programme Phakama being problematic into the next financial year.”

He adds that the finance committee and MPAC requested a report on the billing issue and value chain, but this was not forthcoming.

“The failed audit is not good for the reputation of the city. We will find ourselves on the losing end of funding and with regards to the taxes attached to the funding.”

Member of the mayoral committee for finance councillor Geoffrey Makhubo said at a council meeting last month that corrective measures have been put in place.

“There is a team working on the 2010/11 period to ensure we do not repeat the problems. We agree that any negative report will impact on the cost of doing business in Johannesburg.”

A Standard Bank report on the City of Johannesburg's financial status found the city inflated its revenue for the 2009/10 financial year by R1.9 billion, because of refunds related to the billing mess.

However, Makhubo said Standard Bank is now on board with the COJ's corrective measures.

The COJ says a further R50 million has been set aside this financial year for system maintenance, SAP licences, system alignments and configurations, and fixing of bugs, for the billing system.

Last year, the city migrated its billing system onto a SAP platform, under project Phakama. The project had several aims: to supply a single-service utility for managing the revenue value chain; to be responsible for overall revenue and customer services; to operate a single database; and to give the city a single IT system sufficiently robust to run the integrated and complex operations of the city.

Johannesburg started implementing Phakama in November 2009, and completed the move in June 2010. However, thousands of Johannesburg account-holders complained about grossly over-inflated bills, inaccurate meter readings, illegal disconnections and a lack of service from the city's call centre.

Mayor Parks Tau, on being appointed after the May elections, said previously the city was “well aware of the issues that need to be addressed”. The city previously claimed to have resolved all the problems that stemmed from its migration to the SAP system.

However, ITWeb last month reported that about 7 000 account-holders discovered they owed the city as much as an additional R3 000, on top of their monthly bill, because they had not been billed for refuse removal for the past two-and-half years.

This latest billing problem has only recently been picked up by the city.