Gijima settles “Who Am I” dispute

March 7, 2011 8:53 am 3 comments

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Gijima has announced that it has reached an amicable settlement agreement with the Department of Home Affairs (DHA) to map a way forward for the completion of the multi-billion Rand Who Am I Online project.

In a statement, the company reveals the terms of the settlement.

“The full and final settlement agreement has been signed by all
parties, but is subject to the fulfilment of certain suspensive conditions.
The settlement brings the project back in line with the original objectives
and cost estimates”.

“The total final capital cost of the items in the scope of this project, including expenditure to date of approximately R1.4 billion, is estimated to be approximately R2.27 billion. This is in line with the Treasury budget of R2.23 billion for the project, which was conditionally approved in 2009,” the statement reveals.

In April, Gijima announced it had received a letter from the department contending the validity of the Who Am I Online (WAIO) contract it concluded in June 2008.

Gijima was awarded the ground-breaking contract in June 2008 to overhaul the department’s IT infrastructure. The contract for the WAIO system covers the design, development and implementation of an integrated core system for the DHA, including all business processes of both its Civics and Immigration divisions.

The statement also reveals that as part of the settlement, Gijima has agreed to incur certain manageable losses which will be a once-off impact during this financial period.

“Against the background of the once-off impact of the settlement with the
Department, as well as the impact of the issue on Gijima’s other operations, shareholders are advised that Gijima’s reported basic earnings per share and headline earnings per share (HEPS) for the six months ended 31 December 2010 are expected to reduce to a loss of between 27.5 cents and 28.5 cents from the reported EPS of 8.80 cents and HEPS of 8.83 cents for the six months ended 31 December 2009,” the company states.

The decline is due to the writing down of certain invoices and the future rendering of support and maintenance services as well as legal fees; the cost of skills retention over the duration of the issue; as well as the investment in restructuring the project team to align with Gijima’s involvement in the project.

The company is finalising its results for the six months ended 31
December 2010, which are planned to be released on 9 March.

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