AfriSake’s advocate, Quintus Pelser SC, yesterday argued that no proper tender process had ever been followed for the system, which could cost the city in excess of R8 billion.
The city, in June last year, entered into a services agreement in terms of which PEU Capital Partners was appointed to provide a so-called smart prepaid electricity meter system and Tshwane Utility Management Services (TUMS) to purchase, install, finance and administer the system.
The agreement entailed that the City of Tshwane would have no financial expenditure, other than a payment of 19,5 cents in the rand to PEU when the electricity was sold on a prepaid basis.
AfriSake says the decision to enter into the agreement amounted to the illegal procurement of goods and services, as no procurement process had been followed.
Pelser argued that the city had only issued a tender for financial advice about a prepaid electricity system, but ended up awarding the massive contract for such a system to the very company appointed to advise them.
Pelser argued that it was the most expensive exercise the city had ever undertaken, but in reality very little had been done so far, with only 164 of the 272 systems so far installed being activated.
He described PEU as a mere shelf company that was not even registered for VAT and had “lied” about its assets and turnover.
He added that it was a known strategy to use a company without any assets to obtain procurement projects, simply because there was no risk to the people behind that company and the project was expected to finance itself.
The city, PEU and TUMS are opposing the application.