The North Gauteng High Court on Friday declared a contract between the City of Tshwane and two service providers PEU Capital Partners and its subsidiary TUMS invalid.
The court ordered the R950-million, placed in a special trust account set up for the purchase of PEU’s infrastructure, to be released to the municipality immediately.
The application was brought by AfriForum and AfriBusiness in December 2013.
The City currently pays about R5-million on a daily basis to PEU and TUMS to manage their prepaid electricity meter system.
In 2015, former Tshwane Mayor Kgosientso Ramokgopa and municipal manager Jason Ngobeni allegedly ignored advice from the National Treasury and former finance Minister Pravin Gordhan against the ill-fated electricity prepaid smart meters project.
According to reports, the city was informed that the costs over the lifespan of the project were exorbitant and the risk associated with it was biased against the metro.
Tshwane Mayor Solly Msimanga, who came to court immediately after the judgment was handed, said the Democratic Alliance is pleased with the court’s decision as it will put an end to irregular expenditure.
“When we assumed office in August last year, we inherited a R2-billion budget deficit of which R1.5-billion constituted irregular expenditure,” he said.
“Ironically PEU was initially appointed on a tender to give advice to Tshwane on how to save money, but the deal soon transmogrified into something completely different, by-passing competitive bidding processes. From the outset the DA had pointed out that the tender and the deal was irregular, and would punch a hole in Tshwane’s coffers.”
The court ordered the city to indicate within 14 days whether it plans to take over PEU’s infrastructure.
Msimanga said he has instructed the city’s legal representative to peruse the court order and investigate the possibilities of recovering the money paid out during the tenure of the invalid contract.
“The city will determine who signed the relevant documents and who lied to council and we will consider laying criminal charges against them.”