Gauteng’s R1bn contract bungle

Independent Newspapers

Gauteng premier Nomvula Mokonyane. Photo: Jennifer Bruce

The Gauteng provincial government will be investigated by the National Treasury following the collapse of a R1 billion contract to set up a centralised call centre in the province.

In June 2007, the Gauteng Finance Department entered into a secret agreement with Sibize International Calling to set up a call centre to allow Gauteng residents to apply for learner and driving licences through the centre. People were also supposed to be able to use the service to apply for child grants.

In May 2010, the provincial government abandoned the project after problems at the call centre resulted in residents being unable to secure dates for licence tests.

It was reported that some of the officials forged improper links with owners of driving schools – to allow clients to get preference when applying for licence tests. The bungling caused public outrage, forcing the provincial government to revert to a manual system.

The provincial government was forced to pay Sibize R145 million for cancelling the contract. These amounts were confirmed by Gauteng MEC for Finance Mandla Nkomfe in January when he replied to DA’s Jack Bloom. More than R780m was paid to Sibize, including the cancellation cost.

The reply prompted Bloom to write to Coen Kruger, deputy director-general in the Treasury, asking to investigate the Finance Department for the cancellation of the contract, saying there was “very poor contract management and waste of public money both in the running of the contract and in its termination”.

The Star is in possession of documents from the office of the accountant-general of the Treasury agreeing to probe the matter.

The Star earlier reported that the provincial government and Sibize had a secret clause governing the award of the contract. The clause stated: “Neither party shall without the written consent of the other issue or make any public announcement or statements, including media statements, regarding this agreement, including without limitation, any reference to its existence, its terms, conditions, the details of the negotiations leading to this agreement, or the identity of the parties or any operations carried out or to be carried out pursuant thereto unless it is necessary for the parties to make such public announcement or statement in order to comply, within… South Africa or elsewhere, with a statutory obligation or the requirements of a competent government agency or a recognised stock exchange, in which case, such party shall consult will all other parties before such public announcement or statement.”

Sibize was granted a contract, without the government following proper procurement processes, to set up a provincial call centre in 2007. The parties agreed that the Gauteng Shared Service Centre (GSSC) would pay Sibize R30 000 (VAT included) for each seat in the call centre each month, and R11 400 (VAT included) a month per agent at the driving licence testing centre.

A total of 512 call operators were employed during the initial stages and each call operator earned between R3 000 and R3 500. That meant the GSSC had agreed to pay Sibize R14m to R15m per month, depending on the number of call centre seats in use. The government paid Sibize R175m in 2007, and the amount increased by R3m in 2008.

baldwin.ndaba@inl.co.za

The Star