Durban's R500m billing system

durban's r500m billing system

costs for the development of an electronic revenue management system for the ethekwini municipality have spiralled, with ratepayers paying almost r500-million for it.

the system will manage systems, including billing and revenue collection, and debt management, including disconnection of services. it replaces the existing coins billing system.

delays in developing the system increased costs from r90-million to r150-million in 2004 to r408-million earlier this year. the costs could escalate further with the november 1 "go-live" deadline having passed.

municipal treasurer krish kumar said r316-million had been spent on system, which would probably only come online next july.

the da has called for discussion on the project, saying ethekwini should consider "pulling the plug" on the system.

ifp executive committee member gladwin ndlela labelled the situation "ridiculous", saying the money could be spent on more pressing matters.

the municipality's executive committee decided in april 2003 to allow the council to investigate developing a system instead of buying an available option.

an october 2003 report indicates ethekwini would buy a product - virtual works - on which to base the new system and its owner, india-based ramco systems, would be taken on as "a strategic partner".

kumar said ramco systems was appointed through a tender process, and local companies were taken on for skills development.

in march 2004 the committee approved the system's development based on cost estimates of between r90-million and r150-million and a go-live date was set for march/april 2007.

two years later a report indicated the cost would rise to about r250-million, but the go-live date was unchanged.

a report tabled in may this year indicates the costs had increased to r408-million, and the go-live date was moved to november for rates, electricity and water, and another three months for other areas.

the costs were based on a november go-live date.

if the date is revised, the cost estimation would be revised, the report states.

kumar said the delays resulted from the implementation of changes required by the municipal property rates act.

the report said tests and technological advancements also caused delays.

the da criticised the municipality for developing the system when other products were available. the equivalent sap system in the cape town municipality cost r350-million.

andre stelzner, acting spokesperson for cape town municipality's it department, said sap covered every aspect of the municipality's revenue, including procurement and other areas.

the r350-million cost included hardware, software and consultants' fees, and access to technicians in the event of glitches.

da councillor rory mcpherson said sap should have been considered. "had ethekwini gone the sap route, we could have had an end-to-end system up and running for less than the amount of money the city will spend.

"ratepayers' money is being pumped into a project which, at best, will result in a product that will only be dedicated to the city's billing system," he said.

da caucus leader john steenhuisen recently wrote to executive committee chairman obed mlaba to have the matter put on the agenda.

"i think there has to be a point when the council seriously thinks about pulling the plug on this," he said.

kumar said it was decided to develop a unique system for ethekwini to develop local it skills and to ensure the system, and subsequent systems, were suited to local government.

"these systems will be offered to other municipalities at a nominal cost. the intellectual property will be owned by the municipality, thus avoiding licence fees," he said.