Cape Town — Government departments owe about R800m to the troubled State Information Technology Agency (Sita) and if they do not pay up, they could see essential services withdrawn, which will result in their systems collapsing.

Public Service and Administration Minister Richard Baloyi has the "political will" to take such a drastic step but only if negotiations with departments fail, Sita acting CEO Nontobeko Ntsinde said in Parliament yesterday.

Among the major debtor departments are defence and police.

For its part, Sita will have to deal with the problems of its service delivery, which in many cases led to the departments' refusal to pay. But if this does not work, it will withdraw its services, initially the less important ones and later those that underpin the whole information technology (IT) system.

Ms Ntsinde said the "Achilles heel" of the organisation is its lack of sound contract management.

In many cases, particularly in the provinces, there are no contracts and service level agreements, which means Sita has no recourse when departments refuse to pay.

Sita was set up in 1999 as a centralised supplier and procurement agency for the government's IT requirements, as a means of achieving economies of scale.

But departments turned away from it because of the poor quality and high cost of its services, as well as corruption and inefficiencies.

It also suffered from an ineffective board, weak corporate governance, a poor performance management culture, flawed procurement processes, high staff turnover and many top-level vacancies.

A number of forensic investigations have been instituted to probe fraud and corruption and in the past month four senior staff members have been suspended pending the outcome of disciplinary proceedings, which began this week.

Ms Ntsinde said further suspensions and even criminal prosecutions are likely. The integrity of the supplier database will have to be established, tariffs reviewed and talks concluded with equipment manufacturers to get better prices.

Chairwoman Zodwa Manase said progress has already been made. The agency received an unqualified report from the auditor-general for the 2009-10 financial year and even made a small profit.

In March the Cabinet approved a three-year turnaround strategy to pull Sita out of its crisis and appointed a board of directors.