IT firm wins R15.6m eThekwini contract

An IT consultancy which advised the eThekwini Municipality to continue developing its Revenue Management System has landed the R15.6 million contract to oversee the project’s implementation. However, the city said on Monday there was nothing “sinister” about the appointment of Liepzig Advisory IT, because it was in line with the supply-chain management process of the council. It emerged that the company, owned by information technology expert Leepy Shabangu, was being paid R650 000 a month by the city, as of January 1 this year, for the next two years to oversee the implementation of the project. DA councillor Rich Crouch said he had written to the city treasurer, Krish Kumar, and the city manager, S’bu Sithole, to ask what justification there was for paying R650 000 a month to Liepzig and what the city was getting for that fee.

Crouch said he was not asking the questions out of ignorance, but as a former chief executive of an international software development company. “Something is not quite right. There is absolutely no way that amount can be justified,” he said. The Who’s Who Southern Africa website says Shabangu holds a BCom degree in Information Systems from the University of KwaZulu-Natal. Last year his company was paid nearly R1m to give an overview of the risks associated with “going live” on the new system and to prescribe the various options available to the city. City spokesman Thabo Mofokeng said Liepzig Advisory IT submitted a report to the executive committee (exco) detailing the three options and the way forward with the associated risks and benefits.

“Exco and council applied its mind to the report and the three options and a decision was taken to continue with the RMS project,” he said. Mofokeng said Shabangu’s company was appointed through section 36 of the supply-chain management policy - a regulation used when the accounting officer deemed it necessary to bypass normal tender processes. The company had the knowledge and the project management experience that had been lacking on the project that had cost Durban ratepayers about R505m to develop. Mofokeng also said that a full motivation for the company’s appointment was included in reports to the bid adjudication committee and exco. Liepzig Advisory IT presented three options to exco: stop any further developments of the system and continue using the current Coins billing system; install an ERP system (a generic system); or continue developing the system. All the options came with risks and financial implications, Mofokeng said.

A number of modules of the new system had been implemented. These included revenue receipting, business support, community residential units, bulk electricity and the rates calculation model. Opposition parties have criticised the appointment of the company, saying Shabangu had a vested interest and that was the reason he had recommended that the city continue pumping money into the onerous project. Minority Front councillor Patrick Pillay said Sithole should investigate Shabangu’s motives for having recommended that the city continues with the RMS. The Mercury contacted Yonah Rwambiwa, who is in charge of operations at Liepzig Advisory IT, several times, but he declined to comment.