Tshwane–PEU Smart Meters: 19.5c on Every Rand of Electricity, No Tender — Full Bench Declares the Contract and Its R950m Exit Unconstitutional

R830 million (paid to PEU by termination; R950m termination fee set aside)

documented loss

PEU Capital Partners was appointed in 2012 on a tender to advise Tshwane on saving money; without a fresh competitive bid the relationship became an eight-year contract to install 800,000 prepaid smart meters with PEU taking 19.5c (later 9.5c) of every rand of electricity sold. The Auditor-General found it unlawful and the Public Protector directed a halt. On 13 October 2017 a full bench of the Gauteng Division set aside both the contract and the R950 million termination agreement as constitutionally invalid and ordered the escrowed R950 million released to the city.

The Record The Evidence What Was Lost Implicated Institutions The Paper Trail

The Record

In 2012 the City of Tshwane appointed PEU Capital Partners on a tender to advise it on revenue enhancement. In June 2013, without a new competitive process, that advisory appointment became a master services agreement under which PEU, through Tshwane Utility Management Services, would install 800,000 smart prepaid electricity meters over eight years and be paid 19.5c of every rand of electricity sold through them, later renegotiated to 9.5c. The Auditor-General found the arrangement unlawful; the Public Protector directed the city to halt it; National Treasury objected. By the time the city moved to exit, about 13,000 meters had been installed and roughly R830 million paid.

AfriBusiness (AfriSake) sued to set the contract aside. The ANC-run city negotiated a R950 million termination payment to PEU, which AfriSake interdicted into escrow. After the 2016 election the new DA administration under Solly Msimanga switched the city's position to support the challenge. On 13 October 2017 a full bench of the Gauteng Division, Pretoria, declared both the master services agreement and the termination agreement constitutionally invalid and ordered the R950 million released to the city. Msimanga: "This judgment holds all deals between Tshwane and Peu Capital Partners unlawful." No prosecution followed; the city's later administrations have blamed the deal for a share of Tshwane's R4 billion financial strain. The record is filed alongside the archive's existing Tshwane irregular-expenditure file, which does not narrate the PEU contract.