City flouted smart meters tender
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.