National Treasury is set to investigate whether a three-year call centre contract for Gauteng was awarded without proper process being followed and whether it was a waste of money.
The deal, with defunct Dialogue Holdings' closed down subsidiary, Sibize Calling International, was awarded in 2007, and was worth almost R800 million. Dialogue was once the darling of SA's cell centre sector.
The contract was binned in October 2010 after a review of the centre found “provincial objectives would be realised better with the contact centre being managed by the department”, finance MEC Mandla Nkomfe said at the time. The province paid a R145 million early cancellation fee.
Sibize, which had more than 500 seats, provided Gauteng with several services through the call centre, including procurement and finance shared services, licence booking for the Department of Transport, consumer complaints, and a book-a-taxi service. About two-thirds of its services were provided to the Department of Transport for licence bookings.
However, the call centre was seen as notoriously inefficient, as consumers battled to get dates on which to sit for learners and drivers' licence tests.
Wasted money
Democratic Alliance spokesman on finance Mike Moriarty says National Treasury's accountant-general has agreed to investigate the R145 million cancellation cost. He says almost R1 billion was wasted because proper processes were not followed and the centre was useless.
The investigation will probe whether taxpayers received value for money, or whether there is anything more sinister than negligence or incompetence, says Moriarty “We welcome the investigation into the contract, which was mired in controversy from start to finish.”
Moriarty says the call centre was notoriously badly run, with many complaints from the public that it was almost impossible to use it to book a driving licence test. “In the end, the province had to pay R145 million to make Sibize go away. No value was received for this money whatsoever and we regard this as fruitless and wasteful expenditure.”
The call centre formed part of the Gauteng Shared Service Centre, which has come under fire several times in the past and has been slammed for its failure to deliver several key projects. It was reincorporated into the Gauteng Finance Department, following financial concerns, in 2010.
Moriarty alleges the contract to run Gauteng's call centre was awarded to Sibize without going to tender. “The provincial government did not develop a business case for the contract and it is questionable whether any value was received for the R780 million paid to Sibize over the three years during which it ran the call centre.”
Gauteng provincial staff are currently running the centre for much less, with about a third of the staff, says Moriarty. In October 2010, Nkomfe said binning the deal would save the province an estimated R300 million.
Out of contact
ITWeb was not able to obtain comment from either Sibize or its defunct parent company, Dialogue Holdings, which de-listed on 10 February this year, after losing several contracts.
An e-mail was sent to Sibize MD Sibusiso Kunene, but went unanswered. The number provided on the group's Web site seems to be out of order. Alan Farthing, who was CEO of Dialogue before its listing was terminated, is out of the country and declined to comment via SMS, or provide an e-mail address, indicating he will be back next week.
Dialogue used to have five business units: the three call centre operations Dialogue SA, Interaction and Sibize; and stakes in ContinuitySA and CallForce.
Dialogue SA was liquidated in April 2010, after the company could not stop bleeding cash, and CallForce and ContinuitySA have since been sold. Call centre units Interaction and Sibize were shut down after losing major contracts.
Dialogue was the first local call centre company to list in SA when it debuted on the JSE in September 2006, with ambitious plans to expand across SA and Africa. Since December 2010, the company has indicated it would be wound up.
Gauteng's Department of Finance indicated it would revert with comment, but failed to do so.
Share
