'Tshwane electricity smart meter contract with Peu unlawful'

The High Court in Pretoria on Friday set aside a controversial smart meter contract‚ Mayor Solly Msimanga said‚ hailing it as a victory for good governance.

"This judgment holds all deals between Tshwane and Peu Capital Partners 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‚" Msimanga's office said in a statement.

The contract‚ meant to give Tshwane better credit control‚ started in October 2013.

Msimanga‚ who assumed office in August last year‚ said initially Tshwane paid Peu 19.5c for every rand of electricity which ran through its about 13‚000 meters‚ noting it was meant to install many more of these meters.

When legal action alleging irregularities in the tender process was mounted‚ he said Tshwane’s previous ANC administration concluded a termination agreement in terms of which Tshwane would pay R950 million as a termination fee to the Peu subsidiary TUMS.

Last year‚ TimesLive reported that business lobby group AfriBusiness had applied to the High Court in Pretoria to have the contract set aside on the grounds that it was irregular. In July last year‚ the organisation succeeded in getting the court to stop the city from paying the R950m‚ which was placed in an escrow account until the second part of its application — to have the contract set aside - was heard by the court.

In November‚ the city under Msimanga's administration filed a concession affidavit with the court saying that the contract was unaffordable‚ irregular‚ irrational and should be declared unlawful and set aside.

"This money must now be released to the city‚" Msimanga said on Friday.