R500m for Durban's property billing system
In 2004, the approved development cost for the eThekwini municipality's onerous billing system was between R90 million and R150m.
Fast forward to February 2010, a go-live date for the system was projected for June 30 last year, but another R77m was needed.
This pushed the cost of developing and implementing the system to R474m.
Yesterday, it was decided that the city's ratepayers would have to fork out another R140m for the controversial revenue management system, bringing the total cost of developing it to more than half a billion rand.
The latest request for more funding came after the municipality recently paid an IT expert R1m to review the system and help it decide whether to cut its losses or invest in the RMS.
A figure of R140m was approved by the executive committee yesterday to allow the project to be fully tested and implemented by June 2014.
But the money needed for the system to be fully functional was over and above maintenance and support fees. These, it was estimated, would cost the city at least R55m a year.
Based on the advice given to the council by information technology expert Leepy Shabangu's company, Liepzig Advisory IT cc, the city had decided that the most favourable option was to continue developing the system.
Shabangu previously explained that having a reliable billing system was critical for the effective running of the municipality. The municipality collects more than R20bn a year in revenue.
Yesterday, deputy mayor Nomvuzo Shabalala said the system had taken too long to complete and had been a costly venture.
"This makes me sick. If you understand how long this system has been developed, how much it cost then and how much it is now costing us, I can bet the R140 million is not the last request we will receive," she said.
But city manager S'bu Sithole said the municipality needed to salvage what it had developed "and make it work".
"We need to restrict ourselves to this R140 million. It doesn't make sense to abandon the project now. But to continue to go-live, this is the price we have to pay," he said.
Sithole said the other "painful" step would be to ditch the project and accept that the money spent on it had gone down the drain.
A report tabled before the committee yesterday also recommended that an independent project manager be appointed to report directly and independently to the executive committee. The costs of employing an independent project manger were not discussed.
At the time, when the idea of an in-house billing system was sold to councillors by then-city manager Michael Sutcliffe, they were convinced that no commercially available product met eThekwini's requirements. Another advantage was that in-house development would negate the need to pay annual licence fees.
A number of modules of the application have already gone live.
These include revenue receipting, business support, community residential units, bulk electricity and the rates calculation model.
The Mercury
Posted at 07:53AM Oct 17, 2012 by Editor in Durban | Comments[2]