Business News of 2014-07-04

Subah, SA firm eye $40m foreign call data contract

Subah Infosolutions Limited and Gijima of South Africa two companies who are the subject of separate official investigations in their respective countries over their handling of government contracts have been controversially shortlisted by the Ministry of Communications to monitor international call data into Ghana a contract worth millions of dollars. The Center for Investigative Reporting Ghana (CIRGHA) has gathered that the embattled companies which are both associated with the Jospong Group of Companies are in pole position to win the bid to manage the $40m Ghana international gateway project called the consolidated international gateway project management (CIGPM). The CIGPM serves as a consolidated telephone clearing house for all in-bound international calls and if well monitored could lead to a significant reduction of fraud in the operations of the international gateway system. The other companies on the shortlist are the Seychelles based, Global Voices Group and Africwaves Ghana Limited. Global Voices Group whose running contract to manage the CIGPM ends in 2015 was acquired for $9m by Subah Infosolutions in a deal financed by Stanbic Bank in 2013, Cirgha has gathered. Subah was recently fingered as the beneficiary of a $30m payment said to be its fee for the monitoring of domestic call data, a payment which has aroused a lot of suspicion from industry stakeholders, civil society and anti-corruption agencies in Ghana. Gijima on the other hand is currently being investigated by South Africa’s elite investigative unit over its failure to execute government contracts running into millions of dollars. Gijima is owned by Robert Gumede, a major funder of the ruling ANC and one of the richest black entrepreneurs in South Africa. The Jospong Group of Companies of which Subah is a subsidiary also has a tripartite business relationship with Gijima (a subsidiary of the Guma Group of Companies) and another South African company called Scaw Metals. As recent as March this year, the 3 companies signed a $40m deal to build a steel factory in Ghana’s industrial hub of Tema. Newspaper articles corroborated by our contacts in South Africa have confirmed that the probe of Gijima was authorized by President Jacob Zuma. Our contacts further confirmed that Zuma signed the order for the Special Investigative Unit to probe the tendering process that led to the award of a multi-million dollar contract to Gijima. The SIU which is similar to Ghana’s Economic and Organised Crime Office (Office) will investigate the R360 million contract that Gijima has failed to complete despite being paid millions of Rand by South Africa’s Department of Home Affairs or the Ministry of Interior in Ghana. According to our contacts this is the second time Gijima has botched a major IT contract. In 2011, the company settled out of court with the Department of Home Affairs after it failed to deliver the R2.3 billion Who Am I Online project, an online registration system, by the mutually agreed timelines. By cancelling the contract with Gijima, the Department claimed it saved R2bn. At the centre of the row, the Sunday Independent claims was escalating project costs which saw the initial figure for the tender rising from an initial R2.4bn to a total of R4.5bn. The department cancelled the contract after it realized that the company would not be able to deliver the system before the start of the 2010 World Cup as had been envisaged, CIRGHA gathered. Another contract to convert 500 million pages of deeds records in the department’s deeds offices across the country into micro films has been in limbo since it was awarded in 2010. The e-Cadastre system is not functional despite South Africa’s department of Home Affairs doling out millions of rand to Gijima and its subcontractors. Gijima and one of its subcontractors, Anderson Scanning Technologies (AST) are currently engaged in a court battle to determine who is to be blamed for the current state of affairs regarding the execution of the contract. South Africa’s Sunday Independent reported last year that AST, which was subcontracted by Gijima in 2011, has in court papers described the project as a failure. The department’s annual report stated that irregular expenditure of more than R4m was incurred for services rendered on the said contract because human resources and supply chain management processes were not followed. Over R31.8m paid to Gijima was also considered irregular due to these processes which were not followed. In 2012, Gijima welcomed Public Protector Thuli Madonsela’s separate investigation into the Home Affairs contract, saying it was confident nothing would come out of it because it had done nothing untoward. According to the Sunday Independent of South Africa, Zuma has signed over 30 proclamations authorizing the SIU to investigate corruption in the three arms of government. According to the proclamations issued by President Zuma, the SIU is supposed to investigate fraud, theft, corruption or maladministration in the affairs of the department in relation to the lodging of deeds on the Deeds Registration System of the Pretoria, Cape Town and Bloemfontein deed registries. It is also tasked with probing the procurement of and contracting for the ICT systems and projects, which include the e-Cadastre system. The SIU is also expected to investigate unauthorized, irregular and wasteful expenditure as a result of payments made to the service providers for the ICT systems, CIRGHA can confirm. CREDIT: CENTER FOR INVESTIGATIVE REPORTING GHANA
Source: Paa Kwesi Plange
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