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Tshwane/PEU litigation side-tracked

As DA-administration still coughs up millions every day.

A new development in the litigation to have the City of Tshwane’s controversial smart metering contract with PEU Capital Partners reviewed and set aside, indicates that the litigation might drag on as the city keeps on paying out millions every day that it cannot afford.

Business grouping AfriSake, the City of Tshwane and PEU will be back in court on March 24, but not to debate the merits of the application yet, says AfriSake attorney Willie Spies.

Spies told Moneyweb that PEU’s legal representatives, under direction of advocate Gilbert Marcus SC, argued during a meeting of the parties with deputy judge president Aubrey Ledwaba, that AfriSake’s amendment of its application to cover not only the original Master Service Agreement (MSA), but also the subsequent Interim Services and Termination Agreement (ISTA) is in fact an effort to slip in through the back door a new application in proceedings that have become moot due to the cancellation of the MSA.

Tshwane mayor at the time Kgosientso Ramokgopa terminated the agreement in the middle of 2015 based on the fact that the city could not afford to continue with it. It was replaced by the ISTA that was expected to lapse after six months, but is still in place.

It was eventually set to come to an end in June with the City paying PEU R950 million for taking over its meters and infrastructure, but Judge Bert Bam interdicted Tshwane from making the payment. He ordered that the status quo remain until the review application could be heard, which was expected to be soon thereafter.

While the aim of the recent meeting with Ledwaba was to set a date for the court to hear the review application, Ledwaba decided that the parties should first  argue the point PEU has raised, on March 24.

Spies says if AfriSake loses, it would launch a new application to have the ISTA reviewed and set aside. If PEU loses, however, he foresees an appeal, which could drag out the litigation considerably.

Political change

This follows after the change in political leadership in the City of Tshwane already cost the parties months of delays and Tshwane ratepayers millions of rand.

After the DA assumed office following the municipal elections in August, it requested extra time before the hearing of the review application to get to grips with the administration.

It subsequently withdrew the City’s opposition the ANC-led administration registered against AfriSake’s application.

In the meantime, the daily payment of several million rand to PEU for vending electricity through almost 13 000 meters continues even though it is bleeding the city dry.

Ramokgopa stated publicly that the 19.5% commission paid to PEU is unaffordable. While this has been reduced considerably in the ISTA, the balance of the 19.5% is paid into a trust account, and is still unavailable for service delivery. The allocation of the trust money is expected to be determined by the outcome of the review.

Public Protector

The Public Protector’s office has told Moneyweb that it has completed a draft report on the PEU matter.

This follows after Pravin Gordhan as minister of cooperative governance and traditional affairs at the time, instructed the Gauteng MEC responsible for local government (at the time), Jacob Mamabolo, to institute an urgent investigation into the contract between Tshwane and PEU and report back within 30 days.

Former Public Protector advocate Thuli Madonsela, then intervened on the basis that she had already started with such an investigation. Gordhan retreated in order to prevent duplication and Madonsela proceeded.

At her last media briefing before leaving office at the end of October last year, Madonsela’s deputy advocate Kevin Malinga said the report would be released by mid-November, but that has not happened.

Public Protector spokesperson Oupa Segalwe, told Moneyweb: “there are a few last interviews that we have to conduct with the top administrators at the City of Tshwane. Our aim is to do this in February. We also want to finalise our forensic work urgently. We were delayed by the change in administration at the City. We are now targeting April in terms of finalisation of the entire matter.”

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