The City of Tshwane says it will buy 13 000 smart meters following its cancellation of the project. The city binned the deal after court application by Afrisake to have the tender cancelled.
Afrisake, an Afrikaans business rights watchdog organisation, claimed the tender, worth R27 billion, was illegal. The watchdog noted, based on conservative calculations, the contract costs taxpayers in the Tshwane Metro more than R1.2 billion per year, yet made no difference to the city's ability to stop non-payment of electricity.
Tshwane started rolling out smart meters in October 2013 and, under the project, service provider Peu Capital Partners had already installed almost 13 000 meters to large and small customers, and had been paid R830 million.
The city's aim in installing smart meters, as is the case with some other installations under way, was to improve revenue collection on its electricity provision.
In a statement issued today, the city says it has been in talks with Peu's project company Total Utilities Management (TUMS) to explore options which included, among others, early mutual termination of the contract in a way that delivers a satisfactory resolution for all parties.
Tshwane has decided to acquire the installed smart meter system together with all installed meters so it can continue benefitting from the prepaid smart metering project and to ensure continuity of service to its customers.
This includes all the meter related hardware and software including the vending and collections systems. The city notes it will appoint an independent valuator to finalise a price for what it will take over. TUMS was charging Tshwane a percentage of electricity revenue and not an upfront cost for the hardware.
The city also asked TUMS to provide ongoing support, including training staff between July and the end of December.
During the handover period, TUMS will also l reduce its management fee from 19.5c to 9.5c for every rand because the city will purchase the system.
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