Msimanga administration takes steps to extricate Tshwane from fatally flawed PEU contract
Thu, Nov 24, 2016
Note to the Editor: This was the statement delivered today by the Executive Mayor of Tshwane, Cllr Solly Msimanga, at a press conference held at the Sammy Marks Council Chamber. Cllr Msimanga was joined by the Member of the Mayoral Committee (MMC) for Corporate and Shared Services, Cllr Cilliers Brink, and the MMC for Finance, Cllr Mare-Lise Fourie.
Both in opposition and in government we have had serious concerns about the validity of the PEU smart meter contract entered into by the previous administration. Chief among my concerns was and still is that the contract entered into by the City is deeply flawed and inconsistent with due process.
The serious irregularities that have marred this contract from its very inception have material implications for the City's ability to provide sustainable electricity to residents.
It is for that reason that I, in September this year, announced that I would launch a substantive review into the validity of this contract that threatens to unnecessarily haemorrhage much-needed public funds that could be useful in addressing the priority areas that I have identified for this administration.
It is on this basis that I, in consultation with the relevant members of my Mayoral Committee, have decided to file supplementary affidavits asserting that the deal entered into by the former ANC administration under Kgosientso "Sputla" Ramokgopa was irregular and irrational, and must be declared unlawful and set aside on that basis.
Let me be clear: This administration will not be complicit in the swindling of the City and its residents by remaining a defendant in this matter that we have long held was fraught with narrow political interests at the expense of the City's preeminent mandate to provide the resources that so many people in our community need for everyday life.
After appointing a new legal counsel and studying the contract, we have decided to take the necessary steps to fix the mess created by the previous administration, and it is our intention to extricate the City from this contract that threatens to bleed its resources.
Chief among the flaws of this contract, we maintain, is that the procurement process charged ahead despite the very material reservations of National and Provincial Treasury and their instruction to the Ramokgopa administration not to go ahead with the deal.
Ramokgopa and his cohorts will face the music for defying Treasury, and my administration will ensure that those implicated in wrongdoing are duly dealt with.
Additionally we maintain that the contract in its current form forces the City to surrender much-needed revenue to a service provider that we do not need and that supplied equipment that did not meet the minimum requirements and at a cost way above industry standards.
This we contend is not in the spirit of the precepts of good governance and the responsible use of public funds.
It is for these reasons that we, from the day we assumed office, instructed Group Legal Services to put the contract under review and to instruct new attorneys to extricate the City from this deal.
Presently, the substantive review of the decision to conclude this contract brought by Afrisake to declare it invalid and set it aside is welcomed.
It does, however, present challenges to the City, who will have to continue to pay 9 cents on every rand every day.
As such we instructed our attorneys to find mechanisms to redress this. We simply cannot be held ransom by a contract that in all likelihood will be set aside.
It must also be mentioned that further steps on the Accenture deal will only be taken after the substantive review application into the validity of the contract is concluded.
We are doing our part to get ourselves out of this mess and we are optimistic that our robust judiciary will, when all is said and done, return with a judgement that sets this contract aside.
Statement issued by Samkelo Mgobozi, Spokesperson to the Executive Mayor of Tshwane, 24 November 2016
