A R1.5bn Tech Standoff: Transnet’s Risky Gamble to Reclaim Its IT Systems

A high-stakes technological tug-of-war is playing out in the courts, pitting the struggling Transnet against IT services provider Gijima. The heart of the conflict is a R1.5-billion contract and a simple, critical question: who is truly capable of keeping the lights on at South Africa’s freight logistics giant?

The contract between Transnet and Gijima officially ended in November 2024. Since then, Gijima has refused to simply hand over the keys to its complex IT systems, arguing that a sudden transition would cripple Transnet’s operations. The company insists it needs a concrete, workable transition plan, including a suitable mainframe computer to host the data.

A Costly Lesson in Chaos

Transnet’s attempt to force the issue backfired spectacularly. The state-owned company instructed Gijima to switch off all services by a December deadline. Gijima complied, and the result was immediate chaos. As systems went dark, Transnet employees logged a staggering 6,000 calls for help, forcing the company to urgently retract its own instruction.

This real-world test proved pivotal in court. The Pretoria High Court, presided over by Acting Judge Jacques Minnaar, rejected Transnet’s application to fast-track the disengagement. The judge found that Transnet simply did not have the technical capability, infrastructure, or skilled personnel to take over the mainframe services.

Transnet Fights Back, Gijima Cries Foul

Unwilling to accept this verdict, Transnet is now appealing the decision on 17 separate grounds. It argues that, with the support of its partner Microsoft South Africa, it does possess the necessary technical capacity. It also claims the judge ignored the contract’s conditions, which it says show Gijima failed in its obligations.

Gijima, in turn, is not backing down. The company maintains that Transnet’s transition plan is not viable and that the appeal has no merit. It has accused Transnet of wasting taxpayers’ money on a legal battle based on flawed advice. In a telling move, Gijima’s chairman reportedly tried to restart disengagement talks with Transnet’s CEO after the court ruling, but was rebuffed.

A History of Controversy

This is not the first legal battle between these two entities. The current contract was itself born from a previous years-long dispute. Transnet had initially awarded the tender to T-Systems, a company linked to the Guptas, despite Gijima scoring the highest points and bidding R1 billion less.

After the National Treasury intervened and a court order was issued, Transnet was forced to cancel the T-Systems contract and award it to Gijima. Reports at the time suggested a political aversion to Gijima, owned by Robert Gumede, nearly led Transnet to defy the court order.

Now, history seems to be repeating itself. The standoff leaves South Africa’s critical logistics infrastructure in a precarious position, caught between a service provider it can’t dislodge and a state-owned company a court has deemed not yet ready to fly solo. The outcome will have profound implications for the cost and efficiency of moving goods across the country.

{Source: Mybroadband}

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