No tender for SMS bills

2012-06-25 00:00

THE Msunduzi Municipality has contracted a company to manage its electronic billing service without putting out a tender, and residents smell a rat and are also questioning the excessive charges.

Questions have been raised not only about the lack of a tender process, but about the company providing the SMS service and whether the move was cost effective.

The municipality claimed the move away from printed statements to SMS and MMS (multimedia messaging service) was to cut down on the use of paper and reduce costs.

Msunduzi municipal manager Mxolisi Nkosi said the contract did not go out to tender because the municipality opted to piggy-back on the tender process used by other municipalities.

This was allowed under Section 36 of the Supply Chain Management (SCM) regulations and done to save time and money because of the urgency to sort out the city’s massive debt crisis.

“We were sending out bills and there was no payment on more than 20 000 of the accounts going out. Statements and letters were returned because we could not locate the customers,” he said.

Nkosi said they looked at what other municipalities were doing and found five municipalities in KwaZulu-Natal using the service of Munsoft — a service provider of financial and billings systems.

Nkosi said since the introduction of the Munsoft system the municipality had reduced the number of untraceable account holders from 20 000 to 14 000 and expected to cut this down further to 7 000 by the end of July.

A reader who wrote to The Witness alleged that Munsoft was charging R2,85 per MMS, while the Post Office charged R1,85 for such a service.

On the legality of passing on ID numbers and personal information to the service provider, Nkosi said other municipalities had been doing it this way for a long time and the issue had not come up.

“If there is a problem we will have to look at it,” Nkosi said.

He said the council’s banking hall at 333 Church Street would be re-structured, where a counter dealing with requests for printed accounts would be installed.

Nkosi said he understood that residents were wary after seeing the municipality placed under administration and the electronic bills were part of moves to enhance revenue collection and bring down debt.

Figures published by The Witness put Msunduzi’s debt burden at over R1billion.

Lubabalo Nojiwa, CEO of Buzz Mobile, which supplies the MMS service to Munsoft which manages electronic billing for over 35 municipalities in the country, said the Post Office did not offer their MMS service.

Nojiwa said: “The Post Office never went out publicly to sell that service and as far as I am aware no municipality is using the post office (for the MMS service).”

According to Nojiwa the basic cost to Buzz Mobile was R1,95 per MMS and that this also depended on the network providers.

He said their research had shown that municipalities paid between R8 and R14 and even up to R18 per posted printed statement and this was why most were now opting to go the electronic billing route.

Derek Luyt of the Public Service Accountability Monitor said he did not blame Pietermaritzbug residents for smelling a rat when a service does not go out to tender. Since Section 36 had been used he had no doubt that the tender will be scrutinised by the Auditor-General.

“Let’s hope this was a valid use of the regulation, as a municipality coming out of administration, we expect them to be careful,” said Luyt.

The Post Office could not be reached for comment.

• nalini@witness.co.za

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