IT disaster in South Africa

A fight between South Africa’s rail, port, and pipeline company, Transnet, and its hosting provider, Gijima, could result in the former’s operations coming to a standstill.

According to Gijima’s court documents, seen by City Press, Transnet’s operations could be rendered dysfunctional if it doesn’t find another service provider to store key operational information.

Transnet had instructed the South African IT giant to hand over passwords relating to its operations and walk away. It said it planned to manage the services Gijima provides through internal staff.

Gijima COO, Sylvester Samuel, said Transnet can’t transfer its data without a suitable mainframe computer to accept it.

Gijima had purchased the computer from Transnet’s previous IT provider, T-Systems. Samuel said the results of just walking away without another capable service provider in place would be dire.

“These systems are integral to the organisation’s daily operations and will bring Transnet to a standstill if there’s any interruption in their availability,” City Press quoted Samuel as saying.

He recalled that on 12 December 2024, Transnet had instructed Gijima to switch off all services by 23:59, which it complied with.

However, chaos ensued as soon as the systems were switched off, with Gijima noting that more than 6,000 calls were logged by Transnet employees who were locked out of the systems.

The state-owned company was forced to back down and ask Gijima for assistance. However, Transnet has denied Gijima’s version of the events, instructing it to hand over passwords and walk away.

Transnet’s contract with its former IT provider, T-Systems, entered the spotlight in June 2018, after snippets from a Transnet tender subcommittee meeting revealed bias towards the IT provider.

T-Systems was awarded a five-year Transnet ICT contract in February 2017 after a six-stage open tender process involving nine bidders.

The IT service provider had previously done business with several third-party suppliers, including Zestilor, which had alleged links to the controversial Gupta family.

Zeenat Osmany, the wife of Gupta associate Salim Essa, owned Zestilor.

Snippets from a tender subcommittee meeting revealed bias towards T-Systems, with former Transnet director Stanley Shane revealing that Transnet “helped create” T-Systems.

“I’m happier with the risk of getting sued by Gijima, who did not get a contract, than getting rid of the incumbent that we helped create. I think it’s suicide,” said Shane.

He went on to say that his understanding of putting the contract out to tender was to keep T-Systems honest.

“That was actually the motivation… We are putting this thing out to make sure that we were not paying T-Systems R2.5 billion where we should be paying R1.5 billion,” said Shane.

“Our contract management in this place, excuse my French, is kak. It is kak. It is terrible.”

Gijima reportedly scored the highest points in the Transnet tender process, and subsequently called for a criminal probe into the T-Systems contract. It also launched a court application to set it aside.

National Treasury got involved and, in September 2017, gave Transnet permission to extend the T-Systems contract on a month-to-month basis only, for a maximum of eight months.

A later court order instructed Transnet to cancel its R2.5-billion contract with T-Systems and award it to Gijima. However, Transnet fought to keep the contract.

Documents from March 2019 revealed that Transnet planned to defy the Johannesburg High Court order to award the contract to Gijima.

Transnet reportedly had a “political aversion” to Gijima despite charging 50% less than T-Systems for the same tender.

Gijima was finally awarded the five-year contract in December 2019, which ended on 30 December 2024.