The Department of Home Affairs has unilaterally terminated its contract with GijimaAst for the "Who am I Online" contract – but the IT company is ready to go to the courts to defend it.
According to a statement issued by GijimaAst this morning: The conclusion of the Who Am I Online contract signed in June 2008 between the Department of Home Affairs and GijimaAst is a matter of public record.
"The project involves the design, development and implementation of an integrated core system for the Department of Home Affairs including all business processes of both its Civics and Immigration Divisions.
"After close of business on 13 April 2010 the Department of Home Affairs sent a letter to GijimaAst in which the Department contended that the contract is invalid.
"GijimaAst has taken legal advice and through its lawyers disputes that contention as the company maintains that the contract is valid and enforceable. If the matter is not resolved it is possible that litigation on this issue will follow.
"GijimaAst has fulfilled its obligations and continues to perform in terms of the contract with an extensive and experienced team dedicated full-time to the project. GijimaAst is one of the largest ICT companies in South Africa with extensive experience of implementing complex projects in the public and private sectors. Consortium partners on the project include inter alia multinational companies such as Daon, the world leader in identity management systems, IBM and Siemens.
"There has previously been no suggestion from the Department of Home Affairs that the contract is not valid and enforceable. GijimaAst has been performing in terms of the contract for some two years and the Department`s claim that the contract is invalid was therefore completely unexpected.
"The board of directors is currently considering all options available to the company and should the Department of Home Affairs persist in disputing the validity of the contract, GijimaAst will consider inter alia seeking a declaratory order from the High Court affirming the validity of the contract."
The company also warns that, should the dispute continue, it could have a material impact on GijimaAst's earnings as it represents about 15% of tis revenue.
At the tmie of going to press, GijimaAst's share price had slipped by just over 12%.