Government wastes R772 million buying software licences twice: report

The water department has effectively wasted R772 million buy buying an ‘unlimited’ software licence from global software group SAP, when it appears the exact same deal was struck only a few years before.

According to a report by the City Press, citing memos and minutes it has in its position, the department, under former water minister Nomvula Mokonyane, struck a deal in 2016 to get the unlimited licence from SAP for all departments for R950 million.

However, chief financial officer of the department’s water trading entity, Mpho Mofokeng revealed in the notes that the exact same licence had been acquired not long before that for R178 million in 2013.

Even though it was about to lapse – being a 5-year deal – Mofokeng said in a letter that it would have been able to be renewed for another 5 years for the same price, meaning the department effectively wasted R772 million (the difference between the R950 million paid and the R178 million it could have paid).

Adding more confusion to the mix is the fact that some departments aren’t even using SAP’s software, the paper said, reporting that some departments it spoke to were using Oracle software and other software amounting to millions more being paid.

Mofokeng said the water trading entity and other water boards were not consulted on the SAP contract.

You can read the full story in the City Press for 22 April 2018.


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Government wastes R772 million buying software licences twice: report