Solutions company Syntell is to take over Cape Town's entire road traffic management system from Total Client Services (TCS) from 1 July. This secures Syntell a potential R100 million revenue stream for the next three years.
TCS has held the contract since May 2005, when it was then known as Labat Traffic Solutions. Its contract was mainly to manage the back-office solutions, while Syntell managed the analogue camera system.
There was an uproar three years ago, when it was found TCS had issued thousands of traffic fines in the city with the incorrect dates, making them invalid.
Recently, TCS took Syntell to court over the latter's initial refusal to move its analogue traffic cameras as directed by the City of Cape Town, which in turn, claimed TCS was not performing to standard as it was the overall project manager and Syntell was a subcontractor to it. The court ruled in TCS's favour.
TCS claims in a statement that it has not been given any reason by the City of Cape Town as to why it has lost the contract. It states it will have an 18-month period, from 1 July, in which it will continue to collect the payment of fines issued during its tenure. It has acknowledged the loss of the contract will have a material effect on the AltX-listed company.
TCS MD Saheed Mohamed was not contactable this morning.
Mark Chewins, MD of Syntell, says his company will now manage the entire traffic management system for Cape Town, including cameras, online payments and back-office systems.
He says the city issues about 100 000 fines per month and the company is paid R65 per fine that is paid by the offender. Chewins' basis for the overall revenue figure of R100 million, over three years, is that at least half the issued fines are paid monthly.
“The trend with traffic fines is to move towards more of a debt collection system, rather than a criminal case first,” he says.
Syntell administers the Administrative Adjudication of Road Traffic Offenses Web site on behalf of several municipalities, such as Tshwane. This carries a number of incentives for people to pay their road traffic fines as soon as possible, such as offering a 50% discount if they are paid within 32 days.
The City of Cape Town has not commented on the contract status, or its relationship with either company.
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