Courts stops smart meter payment
Pending the outcome if a review application in the high court, Tshwane metro has been prevented from paying almost R1-billion to Peu, the company that had a contract to install smart electricity meters in the city.
The Tshwane metro has been stopped from paying R950-million to the company contracted to roll-out its ill-fated prepaid smart electricity metering system.
An order to this effect was made by the High Court in Pretoria this week.
The court also ordered that a date for a review application regarding the contract with Peu Capital Partners be urgently obtained.
It instructed that the original contract between the metro and the service provider and also an evaluation report be made available.
The order by Judge Bert Bam followed an urgent application by the civil business watchdog AfriSake.
It sought to prevent the city council to pay even more tax payer money over for the controversial contract which had been cancelled in May last year.
In terms of the deal between Tshwane and Peu, the latter would install 800 000 prepaid smart electricity meters in the metro, run the system and collect fees.
For doing this, Peu was being paid 19,5 cents for every rand of electricity used in the city – an amount way above the accepted market rate which was between 7 and 9,5 cents per rand.
However, Peu installed only 12 700 smart meters before the city cancelled the contract.
Peu still had to maintain and service the metering service until such time as a new service provider was appointed and for this Tshwane was about to pay over R950-million to Peu – a move halted in an urgent application by AfriSake.
At the time, of cancelling the contract, Tshwane mayor Kgosientso Ramokgopa said the termination decision had largely been based on the negative financial economic impact of the project on the metro.
Since the roll-out of the smart metres, which began in October 2013, Tshwane had paid the Peu more than R830-million.
Before granting the interdict, Bam said the more he read about the matter in court documents, the more concerned he became.
The judge will deliver a full judgment within a week, clarifying his reasons for halting the payment.
According to the metro, the payment to Peu was for among others, smart metering infrastructure.
The order further provides that neither millions of rands in a dedicated account, nor any other money would be paid to PEU for such infrastructure.
PEU would however continue to provide the smart metering services and be compensated for it until the finalisation of the review application.
That would prevent any disruption to the supply of electricity to the almost 13 000 Tshwane consumers who currently got their electricity supply via the PEU system.
This includes about 6 500 large power users and represents 55% of the city’s electricity revenue.
AfriBusiness has been ordered to apply to the deputy judge president within three weeks for a date for the review application.
Last week, AfriSake lawyer Willie Spies said Bam’s order was a “win” for the organisation.
“If we had not been successful, that payment would have been made today or tomorrow,” he said.
“We stopped that and we are very glad about the outcome. We have seen excessive wastage of taxpayers’ money in this contract.”
Spies said the City was already in debt as a result of the agreement and would end up going deeper into debt by making the payment.
The court ordered that a priority date for the review application be obtained from the deputy judge president within three weeks of his ruling.
Also read:
Court halts payment for doomed smart meters
Hands off smart meter investigation: Madonsela
Smart meter woes for residents
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