Mogale City Local Municipality (MCLM) has been fighting a legal battle with one of its erstwhile contractors for IT software – Quill and Associates.
The software in question was, and still is, the backbone of the council’s financial system.
The system is used for the payment of salaries and to pay the municipality’s suppliers. The same system is used to record meter readings and to send bills to customers – the main source of revenue that is used to pay for the provision of municipal services.
The news first reported on the lawsuit in July.
“The squabble between the two parties started some years ago when MCLM called for tenders for a new system and the municipality contracted with a company by the name of Lefatche,” says Dennis Pretorius, DA spokesperson for Finance in Mogale City.
The contract was fraught with problems and eventually Mogale City’s administration realised that Lefatche would not be able to provide the services and systems it had contracted for, and was paid in excess of R16 million. During the period of about three years while Lefatche tried to commission the system and the software, the municipality continued making use of the software that belonged to Quill.
“The relations between Mogale and Quill soured to the extent that the municipality stopped paying but continued using the software. Quill claimed damages and insisted that the municipality cease the use of its intellectual property (the software). The Pretoria High Court ruled in favour of Quill but the municipality applied for leave to appeal.”
On 14 October two judges in the Bloemfontein Appeal Court refused to grant leave to appeal and MCLM now must comply with the order of the High Court to pay damages, estimated at R9 million to Quill and must cease to use the software.
“Apart from the enormous cost of R16 million plus damages of R9 million, the municipality will not be able to run the financial system to pay beneficiaries and to bill customers – a real catastrophe! While a company had been appointed to try and make sense of the mess left by Lefatche, it is not expected that the ‘hatch and match’ or ‘cut and paste’ system will be operational before December.”
Pretorius says the DA has warned about this impending disaster repeatedly but the ANC government failed to take heed and do contingent planning in time.
“The DA reported the mismanagement of the tender system and the appointment of Lefatche to the Hawks but understands that the order to investigate the municipality’s management of the tender process requires authorisation by the president – and he has not had time to sign the order. He (the president) obviously has enough of his own problems that requires his attention,” Pretorius says with a wry smile.
“We really do not want to say this but we have to – we told you so and the council meeting minutes will reflect this. We now wait to see how the ANC gets the municipality out of this mess and whether heads will roll as a result of the mismanagement of the whole process.”
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• Mogale City to cough up R15m for wrongful claim
