City flouted smart me­ters ten­der

Pretoria News - - NEWS - RAPULA MOATSHE

LAWYERS for the City of Tsh­wane have con­ceded that the pro­cure­ment of the elec­tric­ity pre­paid smart me­ters con­tract un­der the pre­vi­ous ANC-led ad­min­is­tra­tion was con­cluded with­out fol­low­ing proper ten­der pro­cesses.

The Gauteng High Court, Pre­to­ria heard yes­ter­day the pro­cure­ment was not in com­pli­ance with the city’s Sup­ply Chain Man­age­ment poli­cies.

The con­tract in ques­tion was awarded to Peu Cap­i­tal Part­ners in 2013.

Ac­cord­ing to court pa­pers, the City failed to com­ply with both Sec­tion 217 of the con­sti­tu­tion and pro­cure­ment pre­scripts and its own poli­cies.

The ap­pli­ca­tion was brought to court by AfriBusi­ness, which claimed it pur­sued the mat­ter in the pub­lic in­ter­est, con­sid­er­ing that it was no longer op­posed by the City.

The or­gan­i­sa­tion also ap­plied for an amount of R950 mil­lion, to­gether with all ac­cu­mu­lated in­ter­est, to be re­leased from the ded­i­cated ac­count and be paid to the City.

The court was told that the City con­tin­ued to pay an amount of R4m a day to Peu de­spite the con­tract’s ter­mi­na­tion.

Af­ter the City ter­mi­nated the con­tract in May 2015, part of the terms was that Peu would re­duce its man­age­ment fee from 19.5c to 9.5c for ev­ery R1 vended.

The es­crow ac­count was cre­ated as part of the agree­ment to hold the re­duced fees for the ben­e­fit of the City and sub­ject to ful­fil­ment of the terms and con­di­tions of the ter­mi­na­tion agree­ment.

Peu was awarded a ten­der to in­stall pre­paid elec­tric­ity smart me­ters, but the deal did not work out as planned and was found to be cost­ing the City more than it had bar­gained for.

De­spite its can­cel­la­tion, the City con­tin­ued to pay the con­trac­tor, although at a re­duced rate, for the 12900 me­ters al­ready in­stalled. On the other hand, Peu ar­gued in court that the ap­pli­ca­tion must be dis­missed with costs.

The City sup­ported the ap­pli­ca­tion ini­ti­ated by AfriBusi­ness, which sought for the re­view of the orig­i­nal con­tract between the two par­ties and its sub­se­quent can­cel­la­tion in May 2015.

AfriBusi­ness at­tor­ney Wil­lie Spies said heads of ar­gu­ments went very well, and they were wait­ing for judg­ment to be de­liv­ered at a later stage.

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