Durban — EThekwini Municipality management has “secretly dished out” a R215 million contract to a US company called Oracle to replace the current billing system without going through an independent tender process.
According to documents obtained by the Daily News, the City’s Information Management Unit (IMU) under Robert Dlamini as the Chief Information Officer has struck a deal with Oracle to replace the City’s problematic Revenue Management Systems.
The “appointment” of Oracle was approved in 2021 but nowhere in the document is it explained how the company was identified and which process was used to identify it.
In the executive summary of the 14-page report, the unit cited a directive from National Treasury to ensure that the municipality’s systems were compliant with the Municipal Standards Chart of Accounts (MSCOA).
The committee further said there were penalties for non-compliance in the form of withholding the equitable share grant of non-complying municipalities.
“The City’s current billing system is the Revenue Management System (RMS) which was implemented in 2005. The last module, being metered services for water and electricity, was implemented in 2016,” read the report.
“The implementation journey was 11 years, the application itself is close to the end of its life cycle whereby change requests to the system have become too complex and costly to implement.
“The sustainability of the RMS was queried by committees such as the Finance and Procurement Committee and the War Room. There has also been engagements with Cogta investigating the billing system complaints.
“The Information Management Unit then sought approval from the ICT Strategic Committee to upgrade the RMS, however, pursuant to a previous decision to consolidate into the Oracle platform, the committee recommended IMU explore the Oracle billing system,” read the report.
“The Oracle Utilities Customer to Meter (C2M) utility was reviewed and has demonstrated capabilities to combine meter operations, customer operations and MSCOA compliance on a single unified platform with the possibility of reducing support and maintenance costs with minimal custom development. As a by-product of the exploratory exercise for MSCOA, the Oracle Customer to Meter utility solution for billing was identified as a possible replacement of the RMS.”
In what appeared to be a clear vouching for Oracle to get the tender, the report added: “After detailed engagements and input from the relevant internal stakeholders, it is IMU’s considered view that all the City’s billing business requirements have been assessed against Oracle’s C2M billing system; the system meets the requirements at a high level.
“It also needs to be noted that at a business rule level, the Oracle C2M is configurable and very adaptable. Accordingly, it is recommended that the committee (the ICT Strategic Committee) confirms and supports replacing the RMS with Oracle C2M. The revised estimated cost is R215 776 213 excluding support and maintenance for three years.”
The report also stated that the quote was directly from Oracle and excluded any business partner costs.
This paper also learnt that since then, Oracle representatives have been engaging City officials in preparation to replace the RMS by next year.
Earlier this year it was reported that IMU told councillors that the RMS was not compatible with the MSCOA system and it would be too expensive to reconfigure the RMS to comply with this system.
Dlamini said the RMS needed to be replaced, adding that the municipality has to table a roadmap for the introduction of the new system ahead of its implementation by December 2024.
There was no mention of Oracle and the MSCOA committee which Dlamini is part of.
The committee has since discussed the tender process for the companies to bid for the work.
The tender was issued and closed in July which appears to be just a formality as it seemed the winning bidder has long been identified.
With support and maintenance cost still to be added, the tender bill was likely to go over R400 million.
The City was sent questions which were acknowledged on Thursday and a reminder on Sunday but it had not responded by the time of going to print.
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