Tshwane executive mayor Solly Msimanga said his administration will extricate itself from a contract with PEU Capital Partners for electricity smart meters.
In May 2015, the city announced it was terminating its smart metering contract with PEU.
National government had warned Tshwane on several occasions not to enter the contract, saying it was too expensive.
Tshwane ignored the warnings and concluded the contract. During the 2014/15 financial year, PEU was paid around R830 million – despite only 12,900 smart meters being installed.
A payment of R950 million to PEU was temporarily halted by the North Gauteng High Court in June after a successful urgent application by AfriSake, a division of the civil rights organisation AfriForum.
AfriSake said the municipality had tried to “sneak through” the massive payment with the knowledge the contract was not above board.
Msimanga said serious irregularities have marred the contract from its inception and it has ramifications for Tshwane to provide sustainable electricity.
The city faces the challenge of having to “continue to pay 9 cents on every rand every day”, said Msimanga.
PEU also supplied equipment that did not meet the minimum requirements at a cost way above industry standards, he said.
“We are pleased to say that the time has come, and we will steadfastly ensure that those implicated in wrongdoing are duly dealt with.”
Msimanga said they are steadfast in their determination to fix the mess created by the city’s previous administration.