Tshwane gets shot of PEU

The High Court in Pretoria yesterday declared invalid a contract between the City of Tshwane and two service providers, PEU Capital Partners and its subsidiary TUMS.

The court ordered that R950 million, placed in a special trust account set up for the purchase of PEU’s infrastructure, be released to the municipality immediately. The application was brought by AfriForum and AfriBusiness in December 2013.

The city currently pays about R5 million daily to PEU and TUMS to manage the prepaid electricity meter system.

In 2015, former Tshwane mayor Kgosientso Ramokgopa and municipal manager Jason Ngobeni allegedly ignored advice from the National Treasury and former finance minister Pravin Gordhan opposing the prepaid electricity smart meter project.

According to reports, the city was informed the costs over the duration of the project were exorbitant and the risk associated with it was biased against the metro council.

Tshwane mayor Solly Msimanga said the Democratic Alliance is pleased with the decision as it will put an end to irregular expenditure.

“When we assumed office in August last year, we inherited a R2 billion budget deficit of which R1.5 billion constituted irregular expenditure,” he said. “Ironically, PEU was initially appointed on a tender to advise Tshwane on how to save money, but the deal soon transmogrified into something completely different, by-passing competitive bidding processes.

“From the outset the DA pointed out the tender and the deal was irregular and would punch a hole in Tshwane’s coffers.”

Msimanga said the city’s lawyer would peruse the court order and investigate the possibility of recovering the money paid out during the invalid contract’s tenure. “The city will determine who signed the relevant documents and who lied to council and we will consider laying criminal charges against them,” he said. – ANA