T-Systems prepares for court battle over R1.5bn tender

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 13 Nov 2017
Gert Schoonbee MD of T-Systems SA.
Gert Schoonbee MD of T-Systems SA.

CORRECTION: This story has been updated to correct the tender value from R2.5 billion as originally reported, to R1.5 billionn as stated by T-Systems SA.

T-Systems South Africa (TSSA) is preparing for a court battle with Transnet as the dispute over a R1.5 billion T-Systems Transnet contract turns ugly.

According to a report by City Press, Transnet CEO Siyabonga Gama "has launched a court application to set aside the board's decision to award a R2.5 billion tender to German information technology company T-Systems".

Although the report values the tender as R2.5 billion, T-Systems in a statement today said it amounted to R1.5 billion.

The report notes that Gama's affidavit, filed in the Pretoria High Court on October 23, exposes how the board's acquisition and disposal committee defied Transnet's management - as well as National Treasury's advice - by ceding its IT data services tender to the German company on February 22.

The five-year tender could have been awarded to business mogul Robert Gumede's Gijima Holdings, which scored the highest points, it adds.

T-Systems has also been named in the #GuptaLeaks scandal where several big companies helped Gupta entities secure lucrative government deals.

Last week, ex-Eskom bosses were also grilled in Parliament over the "overpriced" R1 billion information technology tender that Eskom awarded to T-Systems two years ago.

Responding to the allegations this afternoon, Gert Schoonbee MD of T-Systems SA, said: "T-Systems South Africa (TSSA) is supportive of the work that parliament and others are engaged in to get to the bottom of the allegations of state capture.

"Due to our long-standing relationships with Eskom and Transnet which started in 2010 following our acquisition of state-IT company arivia.kom in an open tender, it is natural that TSSA would also be mentioned in this narrative.

"While I expect a high degree of scrutiny and speculation to continue until the various investigations have been completed, I am also well aware that this has caused anxiety amongst all of us, particularly as some of the details that have been referenced are not accurate."

He argues that context and facts are important in what is a complex matter. "It is for this reason that I am placing on the record the facts, key milestones and answers to questions that have been raised around our contracts with Eskom and Transnet.

"We expect that new information will come to light during the next few months as various investigations unfold," he says.

Schoonbee points out that there has also been some publicity around T-Systems' court challenge of a decision by Transnet to retract its planned award of a large IT contract to the company.

"It is important to note that this is a commercial matter, with vested competitive interests at play.T-Systems welcomes the court process as it will provide a transparent, independent and objective judicial ruling on this matter. We will be lodging our court papers soon. These will be in the public domain.

"It is against this highly fluid backdrop that our exco and board have agreed that I should update you on an ongoing basis. We want to be transparent and ensure there is a central repository where you can access accurate information on these inter-related matters as the situation unfolds.

"We have increased our investigations as new information has come to light in recent months, and have taken decisive action to terminate contracts where required. We will continue to act where needed, guided by our core values and ethical principles throughout this process.

"I will provide updates on any new developments as the various processes unfold."

Commenting on last week's parliament debate over the R1 billion Eskom tender, T-Systems says: "We were very surprised to see this number surface in the parliamentary hearings. A saving of R1 billion a year would be highly improbable, as Eskom's all-inclusive average spend with T-Systems from 2010 to 2014 was less than R1 billion a year.

"We do however believe that it would have been possible for Eskom to save approximately R1 billion over a five-year period. We outlined this in our proposal to Eskom in June 2013. After 2014, Eskom insourced (brought in-house) more than 50% of the services they were getting from T-Systems.

"T-Systems cannot comment on behalf of Eskom on whether they did in fact achieve these intended savings since then."