The council playing politics with the IT department is the same thing. Yes, it's within their mandate, but it's still the kind of decisions that makes public services so crappy.
The only source of income for the city is its citizens. The fact that they have apparently been overcharged to the tune of €700 million is not a license to squander €20-30 million - on a project that might decrease the quality of service.
I've only visited Munich once, but from my experiences there of everything from the police to transportation or keeping the streets clean it seems to be one of the most "got their shit together" cities I've visited.
I challenge you to read my original comment and the comment I replied to. Seriously.
I'm challenging the idea that there is a difference in how you measure the success of a public sector entity over a private sector one, not wether Munich is a competently run city.
In fact, the OP suggested that is was meaningless for Munich to have done this private-sector-style savings analysis. I wholeheartedly disagree with him and agree with the approach of the City of Munich.
The only source of income for the city is its citizens. The fact that they have apparently been overcharged to the tune of €700 million is not a license to squander €20-30 million - on a project that might decrease the quality of service.