IT project scrapped after R1bn spend

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Johannesburg - The government has written off R1 billion spent on buying and building an IT system to run across its departments’ computers after the nearly complete project was scrapped in favour of an entirely new one which could cost at least another R3bn.

According to information seen by The Sunday Independent, less than 10 percent of the R1bn already spent on the Integrated Finance Management System – a consolidated IT system – could be reinvested in the new project.

And, to add to that, the canning of the project could also leave the government’s embattled IT arm – the State Information Technology Agency (Sita) – with a hefty legal battle if it fails to negotiate its way out of contracts with several service providers before the new tender is awarded to a single company.

According to Sita’s website, the tender, which was advertised in March and closed on April 23, is still pending.

The decision to scrap IFMS comes nine years after the cabinet agreed that the Treasury, the Department of Public Service and Administration and Sita should contract service providers to provide some of the software systems, and Sita should be financed to build some of the software solutions in-house.

By last year the project, according to several sources, was 80 percent complete. But this week Treasury’s spokesman Jabulani Sikhakhane speaking on behalf of both the Treasury and Sita, said the decision to change the solution was a “strategic” one between both departments and Sita.

He said a steering committee from the three departments nominated Sita to lead discussions with all existing service providers on the basis that they had been working closely together in the past.

“Sita, in turn, appointed a legal firm, Edward Nathan Sonnenbergs, to support them with this process,” he said.

Sikhakhane said the discussions were ongoing and would be resolved in the near future. He disputed that the R1bn would be written off.

“A large portion of the amount spent to date was allocated to preparation activities, upgrade of integration capabilities and specification of business requirements. While some implementation work has been undertaken on the previous solution’s architecture, the decision to change is deemed reasonable in the course of a programme life cycle, and therefore not construed to be fruitless and or wasteful,” he said.

Sikhakhane said the cabinet approved the decision to migrate to the new IT system at a cabinet meeting on November 20 last year.

But a statement issued by the Government Communication and Information Systems a day after the meeting does not mention the decision.The IFMS was seen as a consolidated approach to ensure all government department systems used the same financial management system interface. It was intended to replace the ageing and fragmented management systems used in national and provincial governments.

Sunday Independent


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