City’s R5m-a-day PEU drain ends

TSHWANE METERS TO BE REPLACED

A court has ordered that all the smart meters be replaced and for the parties to work together.

Both parties have to work together to replace meters and associated system.

Asettlement agreement between the City of Tshwane and its controversial smart metering supplier, PEU Capital Partners, was made an order of the high court yesterday.

Tshwane can now remove the PEU meters and install new ones for the almost 13 000 Tshwane customers. It can also stop the haemorrhaging of money that started in 2013 when the contract was implemented.

Tshwane member of the mayoral committee Cilliers Brink confirmed these payments amounted to almost R5 million per day. PEU allegedly operated at a 63% profit margin.

PEU, through Total Utilities Management Services (TUMS), was to replace all Tshwane’s electricity meters – about 800 000 then – with smart prepaid meters and run the back office and vending system.

The previous ANC administration agreed to pay PEU 19.5c of every rand vended through the system, seemingly thinking the scheme would result in substantial saving that would fund the commission.

The commission proved to be wholly unaffordable. The ANC administration then entered into an interim services and termination agreement to stop further smart meter rollout. It provided for Tshwane to pay PEU R950 million to take over PEU’s infrastructure and reduced PEU’s commission to 9.5c/R.

The Democratic Alliance (DA), then the opposition, strongly criticised the ANC for entering into the contract and the subsequent termination agreement which, it stated, was concluded on unacceptable terms.

Afrisake, the business arm of Solidarity now renamed Sakeliga, challenged the original deal and the termination agreement in court. Initially both the city and PEU opposed the challenge, but the city changed sides after the DA assumed office in 2016.

A year ago, the court found the deal to be unconstitutional and set it and the termination agreement aside. The order was suspended until a just, equitable remedy could be formulated to ensure continued electricity supply to the city.

It took a year for the matter to go before the court again, during which time Tshwane was bound to the agreement that has been bleeding it dry financially.

The parties returned to court yesterday with a settlement proposal for the remedy and it was made an order of the court.

Tshwane must give TUMS written notice of the date when it’s ready to start the transfer of the system.

Both parties have to work together to replace the meters and associated system within four months after that date. PEU must continue rendering service “until the last PEU/TUMS smart meter has been replaced and switch over has taken place.”

Brink said the City wanted to take over the metering as soon as possible and believed it could render the services through new service providers at the normal industry rate of six to seven cents/ rand vended.

City wants to take over metering soonest.