A R950 million contract that was a heavy burden on the city’s coffers has been set aside by the High Court in Pretoria.
This crucial court ruling in favour of the Tshwane metro was made on Friday.
Tshwane mayor Solly Msimanga’s office welcomed the ruling.
“This judgment holds all deals between Tshwane and Peu Capital Partners and its subsidiary TUMS as unlawful‚” it said in a statement.
Peu has been hired to install smart meters in the city by the previous administration.
ALSO READ: PEU meter scandal to be investigated
Initially, the metro paid Peu 19.5c for every rand of electricity used by the 13 000 customers whose meters were installed by Peu.
Peu was supposed to install many more meters.
Corporate and shared services MMC Cilliers Brink said that the deal, however, turned into something different, bypassing the competitive bidding processes.
“When legal action threatened to expose the rigged tender, the previous administration concluded a sham ‘termination agreement’ to allow the service provider a quick getaway,” said Brink.
“In terms of the termination agreement, Tshwane would pay an R950 million ‘termination fee’ to PEU subsidiary TUMS.”
He said the DA opposed the deal from the outset, saying it would punch a hole in the metro’s coffers.
When the new administration took over last August, it inherited a R2-billion budget deficit. At least R1.5 billion of which was due to irregular expenditure explained Brink.
The biggest irregularity was a tender for the pre-paid electricity meters by Peu.
ALSO READ: Hofdatum vir Peu kragsaak vasgepen
Read the full article in this week’s Rekord East edition.
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