About 175 jobs will disappear as a result of IBM's withdrawal yesterday from the troubled INCIS police computer project - but that may be only the start.
IBM's Asia-Pacific communications manager, Fred McNeese, confirmed last night to a Computerworld reporter that 25 jobs on the INCIS team and a further 150 contract jobs would go. Industry sources suggest there will be many other redundancies if - as seems certain - the project cannot be revived.
IBM and the government appeared to be on course for a costly legal battle last night.
McNeese told New Zealand media yesterday that his company regarded itself as having "accomplished contractual requirements" on what was conceived in 1994 as the largest document management project in the Southern Hemisphere.
Finance Minister Sir William Birch, who signed off the original 4000-page contract in 1994, insisted, however, that IBM had completed only the first of three stages of the project - which essentially replicates the functions of the Wanganui computer - and that the government wanted the rest of the project completed.
Sir William confirmed that INCIS' cost to the taxpayer so far was $106 million. Others have estimated the cost at up to $130 million, but in any case, costs have run well beyond the $98 million police budgeted for the entire project in 1995.
Birch accused IBM of "walking away" during an interview on the Holmes show last night and said that if the company did terminate the contract, litigation would follow.
McNeese said that from IBM's point of view "the goalposts have been moving since day one" and that his company had not been paid for additional work it was carried out and was owed "a substantial amount of money".
IBM first used the phrase "the goalposts have shifted" in relation to INCIS in 1998, when the government increased funding by $20 million. A subsequent review by Logica found that 70% of requirements were still within the original scope.
A further $10 million in capital expenditure was approved this year, as IBM warned of future delays to phases two and three of the project. The government also formed an enlarged ministerial oversight committee, which has been negotiating for months with IBM. The computer company appears to have refused to proceed without the guarantee of additional funding.