EOH, home affairs face off over R400m contract
IT Web – 26 April 2022
A showdown is looming between the Department of Home Affairs (DHA) and JSE-listed tech group EOH, as they are set to go to arbitration over the controversial R400 million biometrics contract.
The parties have counter-claims on the multimillion-rand Automated Biometric Identification System (ABIS) contract sourced by the DHA that is yet to go live, five years later.
The final implementation of the system would provide a single source of identification for citizens across state institutions and private sector entities.
As the matter heads to arbitration, the DHA is seeking to be reimbursed some of the monies paid to EOH, while the tech company has a similar claim on the department.
The initial ABIS contract, with a price tag of R400 million, was awarded by the DHA to the tech company in partnership with IDEMIA in 2017, after a tender process marred by controversy.
A forensic report by auditing firm Nexia SAB&T revealed how EOH and State Information Technology Agency senior staffers orchestrated an unlawful scheme to make sure EOH landed the lucrative contract.
The DHA then ceded the contract to IDEMIA as of 31 March 2021 and at the time of the cession, R224 million had already been paid to EOH.
Now, speaking to ITWeb, EOH CEO Stephen van Coller says a binding decision on the dispute with DHA will be made in three months.
Van Coller also revealed the tech group has set aside R48 million to be paid out when liabilities arise from investigations into government contracts awarded to it that are associated with impropriety.
The DHA biometrics contract is one of the contentious contracts that EOH is trying to settle.
“We had eight legacy contracts, so we decided to complete or settle them rather than co-default on them because they sat in some very important parts of the South African economy.
“We are going to arbitration with the DHA. We think they owe us money, they think we owe them money as always and that process is due to kick-off in July,” Van Coller tells ITWeb.
Adding pressure on the process are fresh concerns raised by NEC Africa, one of the five companies to bid for the contract in 2017, which is demanding the contract now held by IDEMIA be nullified.
Critically, it says, the South African Police Service still does not have access to a live ABIS system for queries to help fight crime as a result of the delays.
After the cession, the DHA concluded a new agreement to the value of R191 million with IDEMIA for the completion of the initial failed project, with 31 October 2021 as deadline, but this has not happened.
In the court papers filed in the South Gauteng High Court, NEC argues IDEMIA has failed to meet multiple deadlines and extensions “to deliver on the unlawfully ceded corruption-tainted EOH contract”.
The French multinational admitted to the court that the project was incomplete, but said: “IDEMA will have completed the implementation of the ABIS project by the time this application is determined.”
The application to which reference was made was set down for hearing on 7 February 2022.
When contacted by ITWeb on the latest delays, Sandra Valerii, vice-president of group public affairs and press relations at IDEMIA, responded: “As a policy, IDEMIA does not comment on its contracts. Please direct all questions on the DHA contract to the South Africa Department of Home Affairs.”
Tommy Makhode, DHA director-general, hadn’t responded to ITWeb’s requests for comment on the matter by the time of publication.
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