In arrears for R300m
After four years of administration by National Treasury, four companies are suing the Limpopo department of education for almost R300 million over cancelled contracts. The companies include: Indian educational software firm Sankhyaa Learning, which is suing the department for R130 million;
Textbook supplier EduSolutions, which is suing for R121 million;
Construction firm Aurecon Joint Venture, which is suing for R41 million; and
Another company, a “professional service provider”, which has not been named in the department’s annual report and which has already successfully sued for R7 million.
All the lawsuits were lodged in the North Gauteng High Court.
EduSolutions made headlines around the country when it failed to deliver textbooks to Limpopo schools for the 2012 academic year. Provincial administrator Monde Tom cancelled the contract with the company in April that year and as a result, most of the province’s learners spent most of the year without textbooks.
EduSolutions, Aurecon and Sankhyaa are three of a number of companies which had their contracts cancelled after the administrators moved into Limpopo in December 2011.
Sankhyaa Learning, an Indian company based in Chennai, had its contract cancelled in December 2013, two years after the department was placed under administration.
According to court papers, the department had contracted the company to supply schools with 3 000 laptops and 730 desktop computers preloaded with HeyMath, a software program intended to make the teaching of maths easy and fun. HeyMath’s licence fees amounted to R27 million a year for the three-year period ending in 2014.
However, in responding papers, the department says it cancelled the contract with Sankhyaa because it “contravened the public finance management act” and because the company did not deliver the 3 000 laptops it was supposed to.
The department also insists the software was not accessible online and therefore of no benefit to pupils.
Officials already paid the company R10.2 million for the desktop computers it supplied.
“The agreed 180 000 licences as per the agreement were to be accessed online on the HeyMath website via the internet using individual user accounts,” the department says in court court is construction firm Aurecon, which in 2013 was contracted to “offer project management services for a number of construction projects”.
Aurecon dragged the department to arbitration after it refused to pay it about R26 million. The arbitrator ruled in favour of Aurecon, but the department did not pay up for more than a year, prompting Aurecon to approach the court asking it to make the arbitration ruling an order of court.
The court papers reveal that during the arbitration process, it was discovered the department had sent Aurecon a letter, saying the contract was “seriously flawed to the extent that it should be reviewed and set aside as an illegality”. However, the project was not cancelled.
The provincial department’s latest annual report says: “Judgment was given against the department on the amount of R41 million. As at the end of the financial year, the department had settled the capital and legal costs as part of the award which amounted to R26 million, and is engaging with the service provider [Aurecon] on the remaining amount for possible settlement.”
Another company now suing the department is EduSolutions, the controversial company whose contract the department cancelled in April 2012. The firm is suing the department for just over R121 million.
The department of basic education cancelled the company’s tender after receiving legal advice that the contract was illegal, and therefore null and void.
EduSolutions received a contract worth over R300 million to buy, pack and distribute textbooks and other learning material to all public schools in Limpopo. In an ongoing countersuit, basic education minister Angie Motshekga claimed for R88 million, alleging the company had received R19 million in management fees it did not deserve.
EduSolutions, she also argued, had unfairly benefited to the tune of R68 million in discounts from book publishers – money, she said, which should have gone to the department because it had already negotiated discounts from publishers.
In court papers, EduSolutions claims the R121 million is for “the loss of income, management fees and discounts” which the company negotiated with publishers and suppliers of education material.
The provincial department’s annual report also reveals that other unnamed professional service providers have successfully sued it, including one unnamed firm.
“The department has already lost one of these cases and paid R7 million as an award,” the annual report states.
The department of education in Limpopo declined to comment, saying the cases were sub judice.