Joburg's R128 million bonanza for Dimension Data

By Karabo Ngoepe Time of article published May 6, 2021

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The City of Johannesburg is in the process of appointing a company that was fingered in a forensic report. Despite being aware of the forensic report, the City wants to award the company a 12 months contract.

Between 2010 and 2017, the City paid Dimension Data (DD) over R900 million irregularly for ICT upgrades. According to sources, DD will be pocketing R128 Million from May 1, 2021, to April 30, 2022. In addition, the publication has seen a 12-page motivation for the City to deviate from normal procurement processes using Regulation 36.

"The objective of this report is to request permission from the Accounting Officer to allow the Group Information Communication Technology and Information Management department to: deviate from the normal procurement process and appoint Dimension Data (Pty) Ltd to render ICT Services currently offered under the A639 ICT Service Outsource Contract and grant approval of twelve (12) months contract period commencing from 1st May 2021 until 30th April 2022," the report said.

Furthermore, the report stipulates that the appointment be made in terms of regulation 36 (1) (a) (v) of the Municipal Finance Management Act no 56, 2003.

"This regulation makes a provision for the Accounting Officer to dispense with a normal procurement process in any other exceptional case where it is impractical or impossible to follow the official procurement processes," read the report.

Sources working close to the deal believe the contract is just smoke and mirrors.

"It's important to remember that we are heading into the local elections. They will need funds to campaign," the source said

City of Joburg spokesperson Nthatisi Modingoane failed to respond to questions sent to him. We will update the story as soon as we get a response from him.

It is said that the City was procuring a new contract via an open tender. However, there were production delays in the procurement process, mainly due to the procurement demand from departments.

"Procurement process depends on committees set up as per the prescript of Municipal Finance Management Act. The composition of the committees must include Supply Chain Specialists, Legal Advisors and Experts from the user departments. Due to the high demand from user departments, the Group Strategic Supply Chain Management Unit was, therefore, unable to allocate resources to the committees as required and that had an impact on the progress of procuring the new ICT services contract."

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