The City of Tshwane has been interdicted from making a payment of R950 million to its controversial prepaid smart metering service provider PEU Capital Partners.
The order stands until the pending review of the original contract has been finalised.
Before reading the order of the North Gauteng High Court, judge Bert Bam said the more he reads about the matter (in court documents), the more concerned he gets. He said he would refrain from saying anything more at this stage, but would deliver his full judgement with reasons within a week.
The ruling came after business-grouping AfriBusiness approached the court on an urgent basis to prevent the payment.
The payment was said to be for the PEU smart metering infrastructure, but AfriBusiness questioned the basis upon which the amount was arrived at.
The order further provides that neither millions of rands in a dedicated account, nor any other money would be paid to PEU for such infrastructure.
PEU would continue to provide the smart metering services and would be compensated for it until the finalisation of the review application. That prevents any disruption to the almost 13 000 Tshwane consumers who currently get their electricity supply via the PEU system.
This includes about 6 500 large power users and represents 55% of the city’s electricity revenue.
AfriBusiness has been ordered to apply to the deputy judge president within three weeks for a date for the review application.
The court order means that Accenture, which has been appointed by the city as service provider to replace PEU, would not be in a position to commence its contract before the review has been concluded. The city would therefore continue to do business with PEU for the time being.
During the proceedings advocate Cedric Puckrin (SC) for AfriBusiness accused the city of “cooking the books” in order to make provision for the R950 million payment in the city’s 2016/17 budget at the last minute, without properly informing council.
He said the payment is irregular and there is no guarantee that Accenture would buy the PEU infrastructure from the city, as the city and PEU argued. “It is a potential loss of R1 billion to the city’s tax payers,” he said.
AfriBusiness attorney Willie Spies welcomed the ruling and said the organisation has a strong case to have the original contract set aside, which would also apply to the subsequent onerous termination and interim services and transfer agreements.
He said the city had since October 2013 paid more than R2 billion to PEU for a service it could itself provide for R11 million per year. The court order prevents a further R1 billion from flowing to the company.