Multinational software company Systems Applications Products (SAP) has been ordered to repay the department of water and sanitation (DWS) more than R400m.

This follows two software licence and support agreement contracts concluded between the department and SAP, to the value of more than R1bn, being declared constitutionally invalid and set aside by the Special Tribunal.

“The Special Tribunal order follows an intensive investigation which revealed that the department irregularly concluded software licence and support agreements between 2015 and 2016 with SAP,” read a joint statement issued by the DWS and SIU on Wednesday.

“The SIU confronted DWS and SAP with evidence of wrongdoing and by agreement, the SIU together with DWS and SAP, declared the contracts invalid and unlawful. The agreement was made the order of the Special Tribunal.” 

On March 14 the Special Tribunal ordered that SAP repay DWS R413m of the more than R1bn software licence contracts.

“The R413m represents the total amount paid by DWS to SAP pursuant to the 2015 and 2016 software licence and support contracts.

“The Special Tribunal further ordered SAP to pay DWS R263,282,173 within five days of the date of the order, with any remainder to be paid after the tribunal’s determination of whether any further amount should be deducted from the amount due. In terms of the Special Tribunal order, DWS may not use any of the software licensed under the 2015 and 2016 licence agreements.”

A disputed sum of about R83m for third party costs incurred by SAP and the no-profit principle will be adjudicated on by the tribunal and a further order made as to the repayment of any portion of the R83m to DWS.

“The SIU and DWS welcome the Special Tribunal order as it sends a strong message to officials and companies doing business with the state that collusion and unethical business practice will not be rewarded,” read the statement.

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