R950M TO GET OUT OF ME­TER CON­TRACT

CityPress - - News - – Her­man Scholtz

Tsh­wane could have cho­sen to man­age its own smart elec­tric­ity me­ters at a cost of about R11 mil­lion a year, but in­stead in­sisted on pay­ing 70 times this amount to a con­trac­tor – and is now pay­ing R950 mil­lion to get out of the con­tract.

This pay­ment will be made shortly be­fore a new coun­cil is elected, busi­ness rights group AfriSake al­leges in court pa­pers filed in the North Gaut­eng High Court in Pre­to­ria.

This can­cel­la­tion pay­ment is over and above an amount of “at least R2.2 bil­lion” that Tsh­wane has al­ready paid to the op­er­a­tor by sell­ing elec­tric­ity at a loss, ac­cord­ing to the DA.

The smart me­ter con­tract awarded to PEU is the al­ba­tross around the neck of Kgosientso Ramok­gopa, the em­bat­tled mayor of the cap­i­tal, who the ANC has re­placed as its may­oral can­di­date.

The con­tract, meant to give Tsh­wane bet­ter credit con­trol, started in Oc­to­ber 2013. PEU was to re­ceive 19.5% of all elec­tric­ity charges as com­mis­sion in terms of the con­tract. Fi­nance Min­is­ter Pravin Gord­han had al­ready warned that the PEU con­tract was not sus­tain­able in a let­ter ad­dressed to the city on Septem­ber 13 2013, but Ramok­gopa only an­nounced that the project would be can­celled in May last year. Judge Neil Tuchten granted an in­terim in­ter­dict against the can­cel­la­tion pay­ment and the mat­ter will be heard on July 5. But sup­ple­men­tary court pa­pers filed by AfriSake this week in­cluded a mem­o­ran­dum by Umar Banda, the act­ing chief fi­nan­cial of­fi­cer of the city, to Ramok­gopa’s ex­ec­u­tive com­mit­tee. In it, Banda ad­mits that the project would never have de­liv­ered the ex­pected ben­e­fits and could not be ex­pected to de­liver them in the fu­ture. Ac­cord­ing to the mem­o­ran­dum, Tsh­wane also chan­nelled elec­tric­ity it bought from Eskom for its own use through the PEU sys­tem, which meant it paid for its elec­tric­ity twice. The city of Tsh­wane and PEU have yet to re­spond to the sup­ple­men­tary court pa­pers.

PHOTO: LEON SADIKI

COSTLY Kgosientso Ramok­gopa

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