Parliament has accused Siemens IT Solutions and Services (SISS) of delivering “a less than excellent product” in terms of its R1.7 billion contract with the Department of Labour (DOL).
Yesterday, Workers Compensation Fund commissioner Shadrack Mkhonto told Parliament's labour committee that the Siemens system is so flawed that it “cannot possibly account for each claim in the system and it cannot tell us the status of that claim”.
Mkhonto also told the portfolio committee that the situation has deteriorated to such an extent that hospitals no longer accept patients that rely on the compensation fund to pay their medical bills.
Democratic Alliance MP Ian Ollis says this means that workers injured on site would not be able to receive prompt payment on a filed claim against the fund, as they are legally entitled to.
Trendsetters
A Siemens statement tries to deflect some of the blame, saying: “In terms of the public-private partnership (PPP) agreement, Siemens assumed full responsibility and the risks associated with taking over the DOL's IT resources, including hardware, software, support, and maintenance and application development. The Department of Labour is responsible for accurately defining business processes and requirements, while Siemens was tasked with system design, development and delivery.”
It goes on to say that engaging in a PPP requires the commitment of both parties. “Our relationship with the Department of Labour is based on two pillars: value for money and risk sharing. A clear understanding of those two pillars, handled with commitment and maturity, is the foundation of our partnership.”
A press release issued by Siemens in March describes the DOL contract as “...the only ICT public-private partnership in SA; Siemens IT Solutions and Services and the DOL have become trendsetters for other government agencies and ICT vendors”.
It says the two organisations signed a 10-year contract, valued at R1.7 billion, in 2002. “Now, more than halfway through the tenure, all systems are on track to deliver on the Department of Labour's IT objectives, as set out in the agreement.”
However, Ollis is unimpressed. “The problems are that the deal was negotiated very badly [and], with the DOL now being unable to change it, the department did not keep proper oversight of the software implementation, and Siemens has delivered a less than excellent product.
“What makes it so much worse is that the department has entered into a R1.7 billion contract with Siemens to have the required software - but that money appears to have either been misspent, or the department has failed to implement the system adequately,” Ollis said.
Idle money
He said this means the R6.5 billion available in the fund to help injured workers is gathering dust in the DOL's coffers - all because the department cannot procure and implement an efficient software system.
Manyi said the apparent failure on the part of Siemens to meet all its commitments means other entities within the DOL are also not meeting their administrative requirements, such as the Unemployment Insurance Fund (UIF).
“Worse still, the DOL has already paid more than R1 billion to Siemens - but cannot exit the contract since the penalties would be even more costly than finishing it. The DOL must, therefore, pay the remaining R700 million to Siemens regardless,” Ollis said.
“The fact that the DOL has not sorted out the situation with Siemens shows the kind of lax attitude of the department towards accountability and due diligence on taxpayers' money. It has been 10 years since the contract was signed; how long does it take to realise there is a problem?”
A DOL spokesperson says an official response from the department is being drafted, but acknowledged there are problems with the system.
“We all know that various parts of the system do not talk to each other,” he said.
Lumka Yengeni, chairperson of Parliament's labour committee, was unavailable for comment.
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