‘Tenderpreneur’ jibe in court bid to stop roll-out

The roll-out for prepaid electricity meters across the city could be halted if lobby group Afriforum manages to convince the Pretoria High Court that it was wrongly awarded and no processes were followed. AfriForum has told the court the City of Tshwane’s R8 billion contract for prepaid electricity meters for all living in the municipality was irregular. Though the group did not claim that the tender was awarded corruptly, it found it odd that the process of awarding the tender to two service providers - PEU Capital Partners Ltd and Tshwane Utility Management Services Ltd (Tums) - had not included opening the tender to other bidders.

The group argued in court that the process was illegal as no procurement processes were followed. Quintis Pelser, for Afriforum, argued that the tender specification was for the appointment of a panel of financial and legal advisers to assist the council with funding opportunities. The idea was that the winning bidder would be paid per hour for its advice. Pelser said the council, instead of the advice it wanted, got a prepaid metering system - which it did not ask for in the tender specification. Pelser said this made the agreement entered into by the city with PEU and Tums regarding the installation of the meters irregular. Afriforum asked that the city in the interim be interdicted from further rolling out the project dubbed the “e-toll of electricity supply”, pending an application in which it would ask the court to set aside the awarding of the tender to the two firms.

Afriforum said it wasn’t asking for the dismantling of the installations already built. It wasn’t against the implementation of pre-paid systems. The court was told that the system had plenty of advantages. Afriforum was only against the manner in which the tender was awarded. Last June, the council entered into a Master Service Agreement in which PEU had to provide goods and services entailing a smart prepaid electricity meter system. Tums in turn would purchase, install, finance and administer the system. The installation began around October and will take years to fully roll out. “It is an expensive, radical and draconic contract which will set up taxpayers as perpetual hostages of a team of inexperienced tenderpreneurs with a shelf company and a controversial contract,” said Pelser. The court papers didn’t name the directors of the two companies or expand on why Afriforum described them as “tenderpreneurs”.

Though Pelser admitted that there was no allegation from Afriforum about corruption, he said the process was unfair as nobody else was given the opportunity to apply for the tender, nor was a feasibility study done. He said it was probably the most expensive exercise the council had so far undertaken. It concerns 800 000 large power users, including hospitals, universities and government departments. About 272 installations have been made to date and the council planned to roll out to residences at the beginning of March. There had, however, been no installations since December. Judge Hans Fabricius remarked that prepaid metering seemed a win-win situation for both the council and the consumer. “Don’t you agree the sooner the system is in place the better for the consumers?” he asked. But Pelser said, “no, the sooner it is stopped, the better”. Both the council and the winning bidders denied any wrongdoing.

In response to the arguments, the council said mayor Kgosientso Ramokgopa, in his city address, outlined the desire, among others, to install prepaid electricity meters. PEU, it was said, in submitting its proposal focused on smart prepaid electricity meters as a way of contributing to the city’s revenue optimisation programme and thus this proposal was accepted. The council said this fell squarely within the requirements of the tender proposal. The case continues.