While Johannesburg faces a water and electricity billing crisis, behind the scenes the metropolitan council has had to deal with an internal fracas between companies contracted to implement billing software, an internal report penned last year reveals.
The report by an ANC-led task team for the city also finds that the council made a bad decision in appointing Dimension Data, which is currently implementing the SAP software created to solve billing glitches. The report says that Dimension Data should be replaced by its predecessor, software giant IBM.
“The decision to appoint DD is unsound and illogical and has exposed the [city] to extremely high levels of risk,” reads the report. “It was based on a wrong risk assessment. The highest risk lies with the departure of IBM because it is the original equipment manufacturer and applications vendor.”
It goes on to recommend that the council rescind the decision to appoint Dimension Data “as the prime contractor to deliver the remainder of contract A117 and should appoint IBM as the prime contractor”.
The report observes that both Dimension Data and IBM were brought in as strategic partners of the first company contracted to implement the software programme, Masana Technologies, but that “it is not clear whether the contract was put out to tender”. But Alpheus Mangale, Dimension Data spokesperson, says that Dimension Data was selected “under tender”.
But matters between the two subcontractors turned sour. “IBM has taken a position that it will not work with Dimension Data,” reads the report. “The city was faced with choosing between the two — IBM advised the city that a mutually acceptable arrangement could not be reached between IBM and DD. DD cited unacceptable terms proposed by IBM.”
Furthermore, IBM was unhappy with the process used by the council to appoint Dimension Data, believing that it was not given an equal opportunity to present its proposals.
The report says that the council received a R158-million loan from IBM, but gives no further details. The task team, comprising three prominent ANC members, also explains the city’s earlier problems with Project Phakama, when it appointed Masana Technologies as the main contractor to implement software created first by Venus and then German multinational SAP.
“We took a decision to ‘marry’ Accenture [management company] and Masana in an attempt to get them to work together. The marriage did not work and Accenture pulled out — there were lots of delays at huge costs while the transition with the withdrawal of Accenture was being managed,” the report says.
“Masana did not have adequate capacity to manage the complex obligations — [and] underestimated the enormity of the task. It led to it being unable to meet its obligations.”
Last week the Mail & Guardian reported that three of the directors of Masana had worked for the city, City Power or the Gauteng government within a year of it being awarded the contract.
The city would not comment.