The City of Tshwane has lost a total of R2.6 billion on the flawed PEU smart meter contract that continues to extract funds from the capital city, despite the cancellation of the agreement last year.
PEU Capital Partners was contracted to install prepaid electricity smart meters to residents in 2013, but the agreement was terminated in May last year after the city deemed it not financially viable.
The city has continued to fork out millions after 12 900 prepaid meters were installed.
Tshwane mayor Solly Msimanga said the supplied equipment met minimum requirements at a cost way above industry standards.
Msimanga and the mayoral committee have filed affidavits proclaiming that the deal entered with former mayor Kgosientso Ramokgopa’s administration was “unaffordable, irregular, irrational and must be declared unlawful”.
Speaking to the media ahead of the council sitting at the Sammy Marks Square Council Chambers on Thursday, Msimanga said a legal counsel was appointed to extricate the city from the contract.
“I have previously laid charges of fraud, perjury, contravention of the Municipal Finance Management Act and misleading the City of Tshwane municipal council against the previous mayor, municipal manager and the directors of PEU Capital Partners,” Msimanga said.
“Their conduct has had real implications for the people of Tshwane. It resulted in the city having to pay commission in excess of R1.65 billion, which is money that the residents of Tshwane have been robbed of.”
In accordance with the termination agreement negotiated by the previous administration on July 1 last year, the city had to pay the balance of 10c per rand of the original 19.5c per rand into a separate, ring-fenced bank account, which stands at R950 million.
“In total, the loss to the city … stands at R2.6 billion. It is for these reasons that we, from the day we assumed office, instructed group legal services to put the contract under review and to instruct new attorneys to extricate the city from this deal.”
The matter will be heard at the high court in Pretoria on November 30, after rights watchdog AfriBusiness filed an urgent application to interdict the city from making further payments to PEU.
“We are determined to fix this mess created by the city’s previous administration.
“We are optimistic that our judiciary will return with a judgment that sets this contract aside,” said Msimanga.