SAP forks out R82m to settle water affairs dispute

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 30 Sept 2022

German software firm SAP has agreed to pay a further R82 million within five court days from yesterday, as final settlement of a long-running contract dispute with the Department of Water and Sanitation.

The Special Tribunal announced the deal yesterday, saying a full and final settlement on the invalidated contract had been reached, and the software company will cough out a further R82 million.

SAP was first ordered to pay back R263 million over the invalid government tender in March, after its licence and support agreement with the department was declared constitutionally invalid and set aside.

In 2018, president Cyril Ramaphosa authorised an investigation into the SAP contract with the water ministry, citing allegations that public money was spent unlawfully.

The Special Investigating Unit (SIU) then launched a probe into the R671 million water ministry deal with SAP, which subsequently unearthed anomalies and the contract was invalidated.

The contract didn’t comply with the provisions of Section 217 of the Constitution, the Public Finance Management Act, treasury regulations and the department's supply chain management policies.

The Special Tribunal SA – mandated to recover public funds syphoned from the fiscus through corruption, fraud and illicit money flows – announced in March the contract had been set aside.

SAP was ordered to pay the department R263 million, with the remainder of the amount to be determined at a later stage.

Yesterday, the tribunal said a full and final settlement on the matter had been reached and SAP will pay more money. In a statement, it said SAP agreed to pay the full outstanding amount within five court days.

“Consequently, the agreement will extinguish the dispute between the parties and the matter will be finalised. The agreement was made an order of the court,” reads the statement.

“”The settlement arises out of the applicants (SIU and the minister of water and sanitation) having reached a full and final settlement of the remainder of the disputes and matters between them relating to the licence agreements entered into between 2015 and 2016.”

SAP hadn’t responded to ITWeb’s requests for comment by the time of publication.