Johannesburg - Will the withdrawal of the City of Joburg’s IT provider’s R404 million contract, EOH Mthombe, plunge the city’s billing, payroll and payment into chaos?

EOH withdrew from the contract following allegations of bribes raised during the Zondo Commission which resulted in Microsoft withdrawing all their licences from the company.

This termination, claims the DA, is going to cause further billing problems, which have been plaguing residents for years.

Not so, says the city, which claims the transfer of the contract is being handled properly and only R69m of the R404m was paid out for services rendered.

However, according to DA councillor Julie Suddaby, the termination of the contract with EOH Mthombe, which was intended to upgrade the city's SAP (systems applications and products in data processing) software and fix the mess left by the previous SAP installation under former mayor Parks Tau, and which dates back to 2009, will impact the city’s already-problematic billing system.

“This mess is at the heart of the billing crisis which continues to plague Joburg residents, and which now has no end in sight. Incorrect bills with ridiculous amounts, lost credit notes, changing meter numbers, and sometimes bills to the wrong property entirely, are a constant headache for many residents. At the time, R580m was spent on the project known as Project Phakama.

“What the city was left with was a system which failed to recognise thousands of properties, and was not even recognisable by SAP itself. When the DA took over the new upgrade in 2017, it was effectively going to be a clean installation.

“However, this contract had been concluded under the ANC a mere two months before the local government elections. The 2017 contract for R64m, which was an extension of the previous contract, suddenly ballooned to a R404m upgrade contract shortly after implementation,” said Suddaby.

Now the city's SAP business transformation project is set to fall apart after the EOH withdrawal, she said. “The exit assistance clause is unlikely to provide any conclusion to the project. The billing crisis will be with residents for the foreseeable future,” she added.

The city confirmed the expiry date of May 31.

City spokesperson Nthatisi Modingoane said the contract had an exit assist clause which will ensure an orderly exit by EOH and nsure that EOH finalises the modules currently in progress, and allow for an orderly migration, he said.

The contract value of EOH, as awarded on June 2, 2016 was for R404 656 224, but only R69 450 424 from the inception of the contract has been paid to date.

This amount was paid for the modules already implemented and being used by the city, namely, reporting to National Treasury monthly to ensure the city’s compliance as required by legislation and a module which has digitised the city’s payroll function in line with the city’s smart city priority.

Modingoane said the city’s billing system is still online and working 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 is working with SAP SA to perform an assessment of the stage of completion for the SAP transformation.”

The Star