via Mugabe officials, military face off – The Zimbabwe Independent November 20, 2015
FIERCE clashes have erupted in government over the supply of systems, applications and products (SAP) software solutions and security of government information between senior officials in the Office of the President and Cabinet (OPC), supported by intelligence bosses, and the Ministry of Information, Communication and Technology (ICT) backed by the military. The fight — fuelled by vested financial interests of top state bureaucrats — between OPC and ICT officials threatens to throw government’s sensitive information systems into disarray.
The bone of contention is whether Twenty Third Century Systems (TTCS), supported by the OPC and the Central Intelligence Organisation (CIO) chiefs, should continue providing SAP software solutions and securing government information systems despite foreign shareholding. ICT ministry officials and the military’s worry over government’s information security came after TTCS sold between 49 and 80% of its stake to South Africa’s JSE-listed Information Technology company, EOH Holdings Ltd.
OPC and CIO officials want TTCS to continue to supply SAP software solutions from Germany to government despite its new part foreign ownership. However, ICT ministry and army bosses are rejecting that, saying the arrangement poses a national security threat.
OPC and CIO chiefs want TTCS to continue, but ICT ministry and army chiefs have taken over Portnet Software since September 2 using the wholly state-owned entity Zarnet and the Rusunungo Nkululeko Holdings (RNH) controlled by the military to replace TTCS. Zarnet is under the ICT ministry.
Zarnet purchased 65 000 shares in Portnet, representing 26%, while RNH purchased 62 500 shares representing 25% of the issued share capital. This together made up the 127 500 shares purchased representing 51%. The new company which emerged out of this deal is named Zimbabwe Systems and Applications Products (Zimsap-Pvt Ltd).
ICT minister Supa Mandiwanzira in September justified the move to replace TTCS with Portnet or Zimsap, saying since TTCS now has foreign shareholding and thus posed a threat to national security as it had access to sensitive information. ICT ministry officials and army bosses say TTCS cannot be allowed to continue as Zimbabwe’s SAP solutions provider since the South African government, through the Public Investment Corporation (PIC), will have access to government information. The PIC, a registered financial services provider, is wholly owned by the South African government, with the Finance minister a shareholder representative. It is the largest institutional shareholder in EOH, the company which bought into TTCS.
Besides, EOH has a number of rich South African businesspersons as shareholders. There is also concern over the firm’s chief executive Asher Bohbot, an Israeli who is the largest individual shareholder in the group with 5%.
Most government projects done by TTCS — the sole contractor since SAP came into government in 1999 — were not tendered publicly, including the one in the OPC for e-government for US$18 million; Zimra (US$10 million), Zesa (US$5 million), ZMDC manpower (US$3 million) and ZMDC corporate (US$4 million) and MMCZ (US$4 million).
Projects tendered publicly include Finance ministry for US$2 million, NRZ (US$1 million, although it was initially pegged at US$3 million) and Nssa (US$7 million). By June this year, SAP/TTCS projects in Zimbabwe totalled more than US$34 million. Resistance from the OPC to the ICT ministry and army objections was clearly demonstrated in a letter, dated August 18 2015, by deputy chief secretary to the President and Cabinet Ray Ndhlukula to Zimpost chief executive Douglas Zimbango.
“We refer to a recent article in the newspapers raising security concerns regarding Twenty Third Century Systems and their relationship with EOH,” Ndhlukula’s letter reads.
“The office of the President and Cabinet was aware of this transaction which does not pose any security risk to the government of Zimbabwe or to any of its entities including your organisation.
“The Office of the President and Cabinet will continue to work with TTCS on the e-Government project or any other related work. In this regard, we wish to advise you to continue cooperating and working with TTCS on your SAP projects. Should you need any additional information or clarification, please feel free to contact this office.”
In a telephone interview yesterday Ndlukula refused to comment on any issues to do with TTCS saying: “It’s still premature for me to comment about the issue because we are still having meetings and discussions with senior people.”
However, sources say the ICT ministry and army are determined to push out TTCS and bring Zimsap, owned by Zarnet through a partnership with the Defence ministry’s Defence Economic Development Department (DEDD) or RNH, and Chafausipo Family Trust which initially owned Portnet, a local company which was established in 2005.
Sources say in a bid to save the TTCS’s money-spinning deal, the company’s group chief executive Ellman Chanakira has been frantically trying to reach out to the ICT ministry and army bosses. On September 18, he wrote a letter to Major-General Sibusiso B. Moyo, who is in charge of the military’s economic interests, trying to amicably resolve the conflict.
Efforts to get comment from Chanakira were fruitless as his mobile phone went unanswered. Mandiwanzira was said to be out of the country.