Tshwane/Peu prepaid meter deal declared unconstitutional

2017-10-13 22:16
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Pretoria - A full bench in the North Gauteng High Court has ruled that the R950m pre-paid electricity meter contract and termination agreement between the City of Tshwane and contractor Peu Capital Partners is constitutionally invalid and must be set aside.

In 2012, when Tshwane was still governed by the ANC, a tender was put out for advisory services to help the city save money and Peu was appointed. Thereafter, Peu and its subsidiary, Tshwane Utility Management Services (TUMS), were awarded a tender for smart prepaid electricity meter instalments.

After business organisation Afrisake challenged the entire deal in court, the city terminated the contract and agreed to pay Peu R950m. Afrisake then successfully interdicted this payout pending the finalisation of the review application, with the judgment thereof delivered on Friday.

The court found that the entire contract, as well as the termination deal, were constitutionally invalid and ordered that the R950m which was put in a trust be paid out to the city.

Furthermore, the court ordered that the city, which is now under DA rule, make submissions on how it intends to disentangle itself from its business relationship with Peu and its subsidiaries.

Tshwane mayoral committee member for corporate and shared services Cilliers Brink said from the outset it was obvious that the deal was not above board as an adviser could not be appointed as a service provider. She also said that the tender had not followed the normal competitive processes.

"This judgment holds all deals between Tshwane and Peu and its subsidiary TUMS as unlawful, and lays the basis for the city to untangle itself from a relationship which has cost our people dearly," said Brink.

"We also hope the judgment sends the right message to every negligent city manager, every dishonest mayor, and every unscrupulous service provider doing business with government."


Read more on:    da  |  anc  |  pretoria

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