Massive corruption suspected in installation of pre-paid electricity meters in FS municipalities

28 June 2017

The DA is concerned that there may be massive corruption with several multi-million Rand contracts awarded for the installation of pre-paid electricity meters in the Free State.

Our suspicions are based on a reply from MEC for Cooperative Governance, Traditional Affairs and Human Settlements (COGTAHS), Sisi Ntombela, to our question following the Provincial Governments’ announcement on the roll out of pre-paid electricity meters as part of a package of solutions to the province’s massive municipal ESKOM debt.

Three contractors have been appointed to install pre-paid electricity meters in the Setsoto, Ngwathe and Moqhaka Local Municipalities.

For Setsoto, the appointed contractor is Ole, with a contract value of R65 million, to install 5 000 pre-paid meters. This calculates to R13 000 per unit.

In Ngwathe, EPG was awarded the contract with a value of R5 million to install 1 000 units at a cost of R5 000 a unit.

In Moqhaka, Conlog was appointed, but MEC Ntombela is yet to disclose the contract value for the installation of a thousand units.

The DA suspects that these contracts are inflated. It cannot be that in one municipality the cost per unit is R5 000 while in another municipality the cost escalates almost three times to R13 000 per unit.

In the City of Cape Town, where the DA governs, the estimated costs for the installation of a prepaid electricity meter is about R2 000 per unit where there is existing wiring and about R6 700 per unit if wiring is required.

Mercifully, the contractors have not yet started with the installation of pre-paid electricity meters in both Setsoto and Moqhaka.

As such, I have today written to both MEC Ntombela and the MEC for Finance, Elzabe Rockman, requesting them to immediately intervene and put a stop to these contracts and to launch an investigation into the competitiveness and legality of these contracts.

In addition, I will also request that the Portfolio Committee on Finance and Public Accounts call both the Departments of COGTA and Finance as well as the three municipalities to appear before it in order to provide the committee with a full disclosure with regards to these contracts.

Issued by David van Vuuren, DA Chief Whip in the Free State Provincial Legislature, 28 June 2017