Tshwane looking for new providers for smart meters

2015-05-14 17:24
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Johannesburg - The City of Tshwane is looking for a new service provider to continue with the city-wide roll-out of smart prepaid electricity meters. This comes after the initial contract was terminated, mayor Kgosientso Ramokgopa has said.

"We have brought the city’s smart meter project to an end in its current form," he said during the state of the capital address on Thursday.

"However, we remain convinced of the project’s merit in terms of its demand-side management capabilities, and for this reason the city will commence with the requisite processes to appoint a service provider to continue with the roll-out of smart prepaid meters.

"We will be in a position to provide additional information in due course."

The city announced on Tuesday that it was terminating its smart metering contract with service provider PEU.

The original intent of the Security of Revenue Project (SoRP), was to install smart meters for all consumers in Tshwane, both commercial and residential.

"The termination decision was largely based on the negative financial and economic impact of the project on the city," the city said in a statement.

Since the roll-out of the project, which began in October 2013, the city has paid the service provider over R830m.

Up to now, 6572 meters have been installed for large powers users and 6348 for small powers users.

"However, like a spanner in the works, Afrisake's court application in 2013 to interdict and review the SoRP impeded the speedy roll-out of the meters, undermined the benefits for the city and rendered the project financially and economically unsustainable. Since then, the city has engaged with Afrisake and PEU in an attempt to find an amicable solution to the problem," the city said.

"To date, the engagements have not yielded positive results, thus leaving the city with little choice but to issue a formal termination notice. The review application brought by Afrisake is however still pending in the courts."

Costing the taxpayer

Afrisake reportedly claimed at the time that “PEU has no experience in the installation or management of electricity infrastructure in towns or cities”, with the contract an example of "blatant corrupt municipal transactions".

It said on Wednesday that the termination was a confirmation that it was right "about the illegality thereof".

AfriSake's legal representative Willie Spies said it would continue with its application against the city and PEU.

"The last thing we want is the replacement of a corrupt contract with a corrupt cancellation that will cost taxpayers dearly," Spies said.

"We will immediately communicate with the metro’s legal team to get more details about the basis of the termination.

"According to reliable sources the metro plans to keep paying PEU about R3m per day [R800m per year] after the cancellation. This means that the cancellation of the agreement will be even more harmful than the maintenance thereof."

The announcement of the termination was questioned by opposition parties on Wednesday.

Calls for resignation

Freedom Front Plus Tshwane councillor Piet Uys said it was not clear what the municipality would do regarding the acquisition of more smart meters.

"This formal termination of the project now leads to many more questions regarding the project," he said.

"The Freedom Front Plus is convinced that a thorough investigation in this matter must now be launched - this issue will certainly be taken up in council."

The Congress of the People said that based on its calculations, the city eventually paid R130 000 for each of the over 12 900 meters that were installed.

"What is more serious in this whole saga is that opposition parties in the council objected to this project. The ruling party, however, insisted on going ahead with it," spokesperson Dennis Bloem said.

"Cope, furthermore, is shocked that the mayor and city manager have now unilaterally terminated the contract. Did the Council adopt a resolution to do so?"

The Democratic Alliance reportedly called on the mayor and city manager to resign over the smart meter "fiasco".

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