Gijima confirms Home Affairs talks

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JSE-listed outsourcing company Gijima is still in talks with the Department of Home Affairs over the canned “Who Am I Online” contract. In April last year, the department told Gijima that the multibillion-rand contract was invalid and would be cancelled. The deal, worth R2.2 billion, was awarded to Gijima in June 2008.

“Who Am I (I am I said)” is the Department of Home Affairs’ integrated business system that aims to replace all manual processes with online and real-time transactions. Yesterday evening, Gijima told shareholders “it is involved in ongoing discussions with the department”. The company is still “optimistic” that the talks will result in a resolution of the dispute. Gijima says shareholders should be cautious when dealing in its shares until further notice.

According to National Treasury’s Estimates of National Expenditure, released on Wednesday along with the national budget, the cancellation means that planned outcomes for the project will not be met this financial year. Government’s financial year ends at the end of next month. The total cost of the project is estimated at R2.2 billion over five years. So far, R390.4 million has been spent since the project was implemented in the 2008/9 financial year. Over the next three years, a total of R912.9 million has been allocated and National Treasury has approved a “total lifecycle” cost of R2.2 billion.

The project has been dogged by controversy since it was first mooted in 2006. The initial tender for the project was worth R1.9 billion; however, when the contract was finally signed in mid-2008, the cost had increased to more than R2 billion. It was then referred to the auditor-general for investigation by former home affairs minister Nosiviwe Mapisa-Nqakula, on recommendation from the Parliamentary Portfolio Committee for Home Affairs.



Questions were raised around whether the contact had been properly awarded. The auditor-general did not find any wrongdoing by Gijima. Earlier this week, the department denied reaching a settlement, reportedly worth R2 million, with Gijima. Gijima was due to present its financial results this week, but these have been postponed to next month.