City of Tshwane audits PEU deal

An independent audit firm will assess the rate it was agreed to pay off smart metering contract.

The DA-led City of Tshwane has appointed an independent audit firm to assess the rate at which its ANC predecessors agreed to pay off its controversial smart metering contractor PEU Capital partners.

This is the first step in a plan to approach the court for permission to reduce the payment rate until the court application to have the Masters Service Agreement (MSA) and its Interim Service and Termination Agreement (ISTA) reviewed and set aside.

Bankruptcy threat

Tshwane mayor Solly Msimanga said in his budget speech last week, the PEU contract which cost more than R630 million a year threatened the city with bankruptcy.

In terms of an interim court order the city has to continue paying PEU 9.5c per kWh until the validity of the agreements has been determined.

That was a reduction from the original 19.5c/kWh the previous administration agreed with PEU. The balance would be paid into a dedicated account to be used to purchase PEU’s infrastructure at the end of the contract.

The interim order was aimed at preventing a disruption of electricity supply to Tshwane customers, supplied through the PEU system.

The court envisaged an expedited hearing of the main application, but this has stalled due to an objection by PEU to the applicant, business grouping AfriSake, amending its Notice of Motion.

The parties reached a settlement in March and will meet soon with deputy judge president Aubrey Ledwaba to get a court date.

The DA administration has been criticised publicly for continuing to pay PEU since it took office in August last year. The PEU contract was one of five the party promised to stop.

Member of the Mayoral Committee for corporate Services Cilliers Brink, says the city is bound by the court’s interim order.

The city was certain the contract “is irregular and unlawful and that the service provider is profiting unnecessarily from it”.

He said in its 2014 ruling on Cash Paymaster Systems, the Constitutional Court ruled that no company should profit from irregular or unlawful contracts.

“The interim order issued by the High Court in Pretoria states that pending the review application, the city should continue paying for the smart meters. However, we believe that we are in fact paying too much for the service.

“To this end, we have engaged the services of an independent auditing firm to assess PEU/TUMS’ records, and establish whether the service provider’s rate of 9.5 cents per rand is reasonable.

TUMS (Total Untility Management Services) is PEU’s project implementation vehicle. PEU/ TUMS said it had no knowledge of the moves by Tshwane.