Western Cape Business News

Send  Share  RSS  Twitter  24 Mar 2009

VENTURES: Running The Traffic Fine Gauntlet


Recent Western Cape Business News

SCARCELY nine months after trumpeting the claim that it had helped double the Cape Town municipalities traffic fine revenue, the systems administrator Total Client Systems has seemingly been dumped.

Last month TCS – which boasts empowerment giant Mvelaphanda as a strategic investor - was told by the city’s Supply Chain Management Bid Adjudication Committee that their bid to continue to provide Traffic Contravention Systems and Services to Cape Town was unsuccessful.

The unsuccessful bid seems puzzling after TCS claimed that it had helped the city increase traffic fine revenue from R4 million a month in 2004 to around R13 million.

A TCS spokesman said the committee had provided no explanation why the bid was unsuccessful.

TCS, which used to be part of former rugby supremo Brian van Rooyen’s Labat Africa empire, has been providing Cape Town with Traffic Contravention Systems and Services (in other words traffic fine processing).

The contract has not been without its difficulties. In 2005 the City of Cape Town was reportedly already reviewing the multimillion-rand, five-year contract awarded to TCS after the company conceded that an astounding 44 000 camera fines issued by the company were illegal.

The unsuccessful bid is a major blow to TCS, which admitted in a statement to its shareholders that the ‘flagship’ Cape Town contract was ‘material’ to the company.

Although the tender has now been awarded to Syntell, TCS indicated it would pursue the matter by requesting the reasons for the decision “in order to consider its position and take whatever steps might be necessary to protect its interests.”

Syntell may have a hard act to follow. Last year TCS CEO Shaheed Mohammed said the company had effectively earned an extra R100 million a year for the Cape Town city council.

He pointed out that in most SA cities less than a third of traffic fines actually got paid compared with Cape Town where the payment rate was 60% “in some instances.”

But it seems the issue with Syntell goes deeper than just performance on the contract.

In a press statement TCS pointed out that about 12 months ago Syntell refused to relocate their analogue cameras “in accordance with a determination made by the City of Cape Town.”

Subsequently TCS was informed by the City of Cape Town that they were not performing in terms of their obligations due to Syntell’s non-conformance.

TCS understandably instituted legal action against Syntell.

Earlier last month judgement in the application brought against Syntell was delivered in favour of TCS with the former ordered to pay costs. Syntell was ordered to relocate their analogue cameras in accordance with the determination made by the COCT, within 30 days of the date of the judgement and replace them with TCS’ digital camera technology.

The bottom line is that TCS gets some temporary relief as the existing TCS contract with the City of Cape Town will have to be extended for an 18 month period from the end of June this year to the end of 2010.

This would allow the company to finalise all offences that will be in the current system up the middle of 2009 - and presumably offer an opportunity for TCS to lobby for a more lasting reprieve from losing its cash cow.

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