NEWS & ANALYSIS

We were right about Tshwane's prepaid electricity meter contract - AfriSake

Organisation says metro planning to keep paying PEU about R3m per day (R800m per year) after the cancellation

Cancellation proves AfriBusiness correct

12 May 2015

The summary termination of the controversial contract for prepaid electricity meters between the Tshwane Metropolitan Municipality and the company PEU is a confirmation of the fact that AfriBusiness was quite right about the illegality thereof.

The Tshwane Metro just recently announced that his agreement with PEU was terminated immediately because it costs the Metro too much money. Earlier reports indicated that the Metro pays PEU R5 million per day under an agreement concluded between the Metro and PEU, which is in conflict with constitutional provisions regarding public tender processes.

According to conservative calculations the contract costs taxpayers in the Tshwane Metro at the moment more than R1, 2 billion per year, while it still made no difference to the Metro's ability to put a stop to the non-payment of electricity.

The legal representative of AfriBusiness, Willie Spies, said in a statement on behalf of the business rights watchdog, AfriBusiness will continue with its proceedings against the Metro and PEU. ‘The last thing we want is the replacement of a corrupt contract with a corrupt cancellation that will cost taxpayers so 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 R3 million per day (R800 million per year) after the cancellation. This means that the cancellation of the agreement will be even more harmful than the maintenance thereof.’

In his response to the cancellation of the contract the CEO of AfriBusiness, Mr Cornelius Jansen van Rensburg, said he was delighted that AfriBusiness once again has been completely vindicated by the events surrounding the contract. AfriBusiness will continue to strive for transparency, clean administration and the protection of property rights and the rights of taxpayers. ‘If our proceedings in this case could contribute to that, we are very grateful,’ he added.

Statement issued by Willie Spies, Legal representative: AfriBusiness and Cornelius Jansen van Rensburg, CEO: AfriBusiness, May 12 2015