Smart meter project on ice indefinitely

The smart meter pilot project has been put on ice indefinitely after accusations of fraud committed by corrupt ‘tenderpreneurs’ arose for the second time.

Last year, the tender to roll out the smart meters had been awarded to a company that had failed to produce a tax clearance certificate and had bid twice as high as the company that was recommended by the external consultants, Moteko, and the municipality’s own electrical department.

Rumour has it that the bid score sheets were fraudulently altered by officials managing the department at the time, to favour the more expensive company. The project was brought to a standstill after the allegations surfaced in the media, and an investigation into tender fraud was conducted by auditing firm, Deloitte.

While the outcome of the investigation has never been made public, the Newcastle Advertiser is given to understand that the strong recommendations made in a damning report compiled by Deloitte were never implemented.

Earlier this month, the portfolio councillor for Planning, Development and Human Settlements, and Ward councillor for Ward 3, Matthew Shunmugam, encouraged residents of Ncandu Park and Fernwood to apply to participate in the smart meter pilot project, which was supposed to have been rolled out this year.

He explained that the pilot project would be used to determine the viability of installing smart meters in all Newcastle homes, and to iron out any problems that may arise. However, this project will now take longer than anticipated if it gets off the ground at all. Several companies have lodged objections to the awarding of the tender to supply and install 1 000 smart meters for the pilot project, to a company called Exotic Warehouse.

Viewers of popular investigative journalism television programme, Carte Blanche, will remember that Exotic Warehouse was recently the subject of an investigation when Johannesburg residents complained that it had not delivered on its promises, after being awarded a tender by City Power to manufacture, supply and install solar geysers in the area.

While Exotic Warehouse had been awarded the solar geyser tender on the basis that it would source raw materials used in the manufacturing process in South Africa, and that the geysers themselves would be manufactured locally, they were caught receiving a bulk order of solar geysers from China. The geysers that were imported were not SABS approved and most did not work at all.

Companies that objected to Exotic Warehouse being awarded the smart meter project in Newcastle, pointed out that a third grade electrical professional certificate (3EP) was part of the bid specifications required in the tender documents.

According to a quick search on the Centre for Industrial Building Professionals website, however, Exotic Warehouse clearly only has a first grade general electrical certificate (1EG). How does a company that is not properly certified make it through an external consultant, three municipal supply chain committees and the municipal manager himself, to be awarded the tender?

Competing companies say it is blatant fraud. Municipal manager, Kebone Masange, answered simply, “I don’t know.”

He that, by the time the supply chain process was completed and he received a recommendation from the Bid Adjudication Committee, he would not have received nor would he have viewed a complete set of tender documents.

“The project will be put on ice until our legal department has had a chance to resolve the objections to the satisfaction of all parties concerned,” said Mr Masange.

Asked how long this would take, he responded, “I wish I were a prophet, then I could tell you.”

Priv Reddy, owner of Exotic Warehouse, says he did not compile the tender documents himself and would need time to investigate what had happened.

“If the bid specifications required a 3EP, however, we would have had to partner with a local company,” he assumed. Asked the name of the local company Exotic Warehouse had partnered with, Mr Reddy said that he did not know and would need more time to look into the matter before he could respond.

In the meantime, it seems that Newcastle residents who are clamouring for smart meters to be installed, are going to have to wait a while longer.