Software giant SAP and the Department of Water and Sanitation are involved in a “double billing” scandal where hundreds of millions were wasted.

The City Press reported that the department purchased R950 million in “unlimited” SAP software licences for itself, all nine water boards, and the Trans-Caledon Tunnel Authority (TCTA).

This five-year deal was concluded despite the water boards and the TCTA having contracts with different software companies and paying their own licence, maintenance, and support fees.

Citing internal memos and emails, the City Press reported that warnings were issued not to conclude the deal, as:

The department had already acquired “unlimited” SAP licences for R178 million in 2013.

The water boards had not been asked about the move.

The Department of Water and Sanitation’s existing R178-million deal for “unlimited” SAP licences could also have been renewed for around the same price for the next five years.

This means the department essentially wasted R772 million.

Gupta-linked companies

SAP said last month that a probe found it paid about R128.6 million to businesses linked to the Gupta family to win contracts with state-owned companies.

Three senior SAP executives who were suspended last year have now quit, it has strengthened its legal and compliance teams, and is cooperating with ongoing investigations.

Details of the payments to Gupta-related third-parties come after SAP said in 2017 it was being probed by the US Department of Justice and Securities and Exchange Commission.

The investigations involved how it won contracts with Eskom and Transnet.

The Guptas, who are friends with former President Jacob Zuma, are accused of using their political connections to win state contracts and influence ministerial appointments.

Denials from SAP

amaBhungane first reported the alleged corruption in July 2017, where it cited correspondence between SAP and a Gupta company called CAD House.

The correspondence showed that SAP used the company as a “sales partner” to secure contracts with Transnet.

The report stated that SAP said if CAD House was the “effective cause” of SAP landing a Transnet contract worth R100 million or more, it would get 10%.

SAP rejected allegations that it paid R100 million in kickbacks for scoring R1 billion in government contracts.

SAP responds

SAP said a review of all public-sector contracts dating back to 2010 is ongoing, which includes the Department of Water and Sanitation deal.

“It is our intention and duty… to get to the bottom of these matters, and we intend to keep that promise,” said SAP.

“We want South Africa to know that we are pursuing this process as quickly and thoroughly as possible.”