In what has been described as one of the worst cases of abuse of public funds, the Northern Province Health Department has paid an international computer company R116-million to install an information technology system it cannot use.
The department has now engaged another company to undo IBM's work.
The new company, Ethniks, has been awarded a R94-million tender to remove the IBM system and install a brand-new system.
In 1995, the department invited tenders for the installation of a system that was meant to co-ordinate information in the province's 43 hospitals. The system was also supposed to be linked to the department.
IBM was awarded the contract, and the work was supposed to have been completed in three years.
However, Health Department budgetary constraints resulted in the installation of the system in only 23 hospitals in the prescribed time.
Although the initial amount stated in the tender documents was R110-million, IBM was paid R116-million, according to Health MEC Sello Moloto.
Moloto would not explain why IBM was paid R116-million even though it had installed the system in only 23 of the province's hospitals.
He admitted that the system that had been installed by IBM would not be used and was being removed by Ethniks.
Moloto, who was not on the provincial executive council in 1996 when the deal was concluded, described the apparent waste of money as sad.
I would rather not make any specific comments on this matter because it is the subject of an investigation, he said on Tuesday.
IBM executive consultant Dr Biago Longano said the company had been paid R100-million for the main contract, while the additional R6-million was related to computer training and cabling provided by IBM.
Longano was adamant that IBM was committed to finishing the work as had been specified in the tender documents.
We would have finished the work at no additional cost, he said, adding that the department would only have to pay a further R20-million for maintenance. He said the maintenance fee would have to be paid even to the new company.
Asked why IBM had failed to complete the work within the contract period of three years, Longano said the previous head of the Health Department had requested IBM to slow down the operation because the department had been experiencing budgetary constraints.
Source: The Star,
October 16 2001 at 08:12PM
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