Tshwane smart metering contract in the spotlight

Three judges are hearing arguments before deciding whether the City of Tshwane’s controversial smart electricity metering contract and its subsequent cancellation agreement are unlawful and should be set aside.

The previous ANC administration concluded the original agreement with PEU in 2013. PEU would finance and provide a smart electricity metering system for the city and be paid 19.5% of the revenue vended through the system.

Then finance minister Pravin Gordhan warned former ANC mayor Kgosientso Ramokgopa not to go ahead with the transaction and pointed towards flaws in the procurement and a lack of value for money.

Industry experts stated that this was far above industry norms and represented huge profits. Ramokgopa in May 2015 conceded that the contract was unaffordable for the city.

The auditor-general later ruled the expenditure irregular.

AfriSake, the business grouping of the Solidarity movement, has challenged the original agreement. It was unsuccessful in obtaining an early interdict to stop the roll-out of the system, but in July last year obtained an interim order to stop the city from paying PEU R950 million to take over the meters and other infrastructure.

The court then ordered that the status quo remain until the full review is heard, which now commences.

PEU has installed only 13 000 meters instead of the original plans to install 800 000. The 13 000 meters include 6 500 large power users and represent 55% of the city’s electricity revenue.