The City of Johannesburg’s beleaguered billing system is still in disarray after the municipality paid nearly R70m of a R404m partially completed upgrade contract that was terminated early with JSE-listed technology company EOH.
SA’s richest metro has been dogged by a problematic billing system since 2009, resulting in late bills, incorrect billing, lost credit notes, non-corresponding meter numbers and other inaccuracies.
The latest development is the early termination of a contract awarded to EOH Mthombo, a division of EOH. The value of the contract increased rapidly to R404m from R64m in 2017. It was one of eight contracts identified as dubious by ENSafrica after EOH commissioned Africa’s largest law firm to scrutinise its business.
DA councillor Julie Suddaby said city officials refused to answer questions during a governance committee meeting last week as to the reason for EOH Mthombo’s departure, how much had been paid to date, what the status of the upgrade was and how the city was going to complete the project.
Suddaby said the R400m EOH SAP Transformation project will come to an end on May 31, which means the "billing crisis will be with residents for the foreseeable future".
City of Joburg spokesperson Nthatisi Modingoane said the municipality has received value for money from the project because the billing system is online and is being used.
He said the project had an exit assist clause that the city had activated to ensure an orderly exit by EOH, which will ensure it "finalises the modules that are a work in progress and allow for an orderly migration".
Modingoane said the contract value as awarded on June 2 2016 was R404m and an amount of R69.45m had been paid to date.
He said EOH will exit the SAP Transformation project in July or August, "depending on negotiations that will lead to an orderly migration as per the exit clause".
Modingoane added: "The city’s billing system is still online and working accordingly under the old platform, which is being maintained and supported under the Metro Trading Company, which is a technological company owned by the city.
"The city has approached SAP SA as the original equipment manufacturer to perform an assessment of the stage of completion for the SAP Transformation project and will provide a road map to ensure a compliant and quality rollout.
"This assessment will form the base of phase two of the SAP Transformation project, which will be implemented by the city with the full support of SAP SA."
EOH has been implicated in R1.2bn worth of suspicious transactions, mostly involving public sector contracts. In 2019 software giant Microsoft terminated its contract with EOH over an allegedly corrupt contract with a government department.
EOH group risk officer Fatima Newman responded to a list of questions from Business Day with a one-sentence paragraph: "EOH wishes to advise that the term of the agreement with the City of Johannesburg has come to an end and EOH is complying with its post-termination obligations to assist with an orderly migration."
Suddaby said the EOH contract had been concluded under the ANC administration a mere two months before the watershed local government elections of 2016, in which a DA-led coalition won control of the metro.
"The city now has six months to find a new service provider, order EOH Mthombo to bring the new service provider up to speed, and have the new service provider take over the project. Either way, the billing crisis will be with residents for the foreseeable future," she said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.