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Davies squares up to IT company

Feb 04 2011 17:13 I-Net Bridge

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Cape Town - The IT company whose R153m contract with Cipro was cancelled last year by the department of trade and industry (DTI) will be taken back to court by the DTI, after the two parties failed to reach a settlement.

Trade and Industry Minister Rob Davies said on Friday that demands presented by the Valor IT lawyers as part of settlement negotiations were "unreasonable and contrary to public interest principles".

An action brought by Valor IT against the DTI, Cipro's controlling authority, in the North Gauteng High Court resulted in the judge ordering the two parties to explore a settlement. Valor IT had wanted compensation for the cancellation of the contract.

Davies' comments on Friday make it clear this will not happen.

Valor IT was awarded the contract more than two years ago by Cipro.

However, the auditor general and parliament's standing committee on public accounts (Scopa) last year found that this was done irregularly.

Scopa was concerned that Cipro paid Valor IT R56m three days after it had delivered a box of compact discs containing software at Cipro's offices, and before any work or planning had taken place.

Those comments and another independent forensic report, which has not been made public, resulted in the suspension of two of Cipro's top managers and several court actions.

Valor IT has contended that the DTI owes it money for work done and that it should be compensated for the unilateral cancellation of the contract.

Davies indicated that not only was the DTI not interested in paying any form of compensation, but that it was exploring ways to get the R56m back.

In the meantime, Cipro and the DTI were working with the developers of the current system, a software development company called Waymark, to maintain and upgrade the system.

While a contract has not yet been finalised, they expect it to be about R11m and to run for about 18 months. 
dti  |  cipro
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