Project cancellation was smart move

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Home affairs minister Nkosazana Dlamini-Zuma has described the cancellation of an up-to-R16 billion smart ID card project as “a blessing in disguise”, as the department’s front-office was not ready for it.

“Since we have withdrawn that contract, it appears our front-offices were not equipped to deal with the production of smart ID cards. We are currently upgrading them so they will be in the future,” she said this week at a Parliamentary media conference, ahead of her budget vote speech.

Dlamini-Zuma said the department’s objective was to do away with paper systems, meaning cameras, biometric and other equipment had to be installed in its offices. “This would also lead to the lowering of corruption,” she said.

The multibillion-rand smart ID card system was initially awarded to a consortium led by GijimaAst last year. However, an audit showed irregularities in the way it was awarded and the contract was withdrawn. Dlamini-Zuma did not say if, or when, a new smart ID card system would be introduced. “However, we are going to use this year to prepare our offices for when it will be introduced and hopefully next year we can start rolling out the smart ID card system,” she noted.

The smart ID card system is supposed to replace the current green ID book that South African residents are required to have as proof of identity for various official institutions, such as banks, government services and to vote. Residents can apply for one from the age of 16. However, these ID books are often forged or altered. “We want to sort out the ID book system properly so that the only new issuances we have are those to people aged 16,” Dlamini-Zuma said.

Smart cards were first mooted in 1995 when the DHA issued a request for tenders for a Home Affairs National Identification System (Hanis) consisting of such a solution as well as Automated Fingerprint Identification System (AFIS). Only AFIS was awarded – in 1999. After many more delays the digitisation, as well as migration, of the Home Affairs fingerprint and photograph archives was completed in 2007.

In April 2008 then-director-general Mavuso Msimang said 25 ICT companies had answered a request for information for the smart ID card project. Treasury also allocated about R650 million to the venture, R3.7 million being spent in state financial year 2004/5 and R46.3 million in 2006/7. That appears where he wheels came off. The Estimates of National Expenditure (ENE) for 2007/8 indicate that Treasury that year allocated R150.5 million to the scheme, with R114.2 pencilled in for 2008/9 and R335.2 billion for 2009/10. But the 2009/10 ENE shows only R7.3 million of the R150.5 million was spent. R114.2 was still budgeted for the 2009/10 year, but the R335.2 million had been trimmed to R104.4 million for 2009/10. That amount remains in the 2010/11 ENE as an “adjusted appropriation” for the government year that ended last month.

But as intimated by Dlamini Zuma last month the ENE confirm that – for now – the Treasury is not willing to spend anything on the project. There is no allocation at all for the next three years. ITWeb reported in September 2008 that it had been confidentially handed a SITA tender bid evaluation document showing the agency’s Recommendation Committee (RC) was being asked to propose a joint venture (JV) led by ICT vendor Lefatshe Technologies be declared the winner of phases one and three of the project and a grouping named Oberthur SA the winner for phase two.

The documents, anonymously provided to ITWeb – the authenticity of which could not be verified – estimated the cost of phase one at R1.2 billion, that of phase two at R100 million and phase three at R15.57 billion – far in excess of what Treasury had in mind, if the ENE can be believed. A pilot project had been scheduled for November 2008, with pensioners as the sample group. In March 2009 ITWeb reported the pilot was delayed and it would take about three months to start once a tender to manufacture the ID cards had been awarded. Dlamini Zuma in June 2009 blamed the delays on poor administration of the tender by the State Information Technology Agency, known as SITA. The project was finally cancelled and handed to the National Treasury in September last year.

In December 2009 the department said it still hoped to sign a contract by the end of March this year. Responding in writing to a question asked by Democratic Alliance member of the National Council of Provinces MJR de Villiers the DHA said it had “requested National Treasury to start the tender process afresh. It is, still, hoped that the tender will be evaluated, and awarded during the 2009/10 financial year” that ends March 31.”

Speaking to journalists last month, Dlamini Zuma said that having stopped the tender “the money went back to Treasury and with the recession and all the problems we have the money was then used for other things but we are still pursuing.
“We are now looking at, I think I communicated earlier we are still in discussion to see whether this tender can be done differently because we had bad experience with the tenders and SITA. So we are not sure whether we should go back to SITA or be given an alternative way of dealing with [it]. So that is the situation we find ourselves in with the smartcard, but we will pursue it. In our budget we don’t have the money for the smartcard but once we have established which way to go, because there was no point in asking, so once we have an alternative we will try to put in a bid in the next budget.

Corruption, a long-time bugbear at the Department of Home Affairs, is slowly being dealt with and Dlamini-Zuma said the installation of biometric systems for staff logons is being rolled out. “We want to identify who was involved at every step of the process. A definite paper trail, so if there is an allegation of corruption, then we can deal with it,” she says.



Dlamini-Zuma said 3833 Home Affairs employees have been inducted onto this biometric system so far. Deputy Home Affairs minister Malusi Gigaba said the Government Printing Works, a division of the department, was moving to its new premises in Pretoria. This would increase security and allow for the use of new high-technology equipment, he explained. “The Government Printing Works has been contracted to produce the smart cards for African Union diplomats and for the Airports Company of SA. It is proving to be very capable as the government’s premier printer of security documents,” Gigaba noted.