The Democratic Alliance (DA) is considering initiating criminal charges over the Tshwane smart meters tender saga.

On Thursday, the DA’s Lex Middelburg said his party had unravelled new material and correspondence which show that the municipality concluded a contract to install 800 000 smart electricity metres in the South African capital with PEU Capital, despite red flags raised by National Treasury.

“The mayor [Kgosientso Ramokgopa] and the municipal manager of Tshwane [Jason Ngobeni] ignored the opinions, advice and express written instructions of the then Minister of Finance and head of National Treasury Pravin Gordhan not to proceed with the contract for the rollout of prepaid smart meters in the city by PEU Capital Meters,” said Middelburg.

“They also failed to disclose this information to the council of Tshwane. In a letter by the minister to the mayor, dated September 13, 2013, the minister raised concerns that the contract between Tshwane and PEU was entered into without complying with applicable legislation’.”

Middelburg said Gordhan pointed out that the PEU contract did not offer value for money to the city. In National Treasury’s assessment, the agreement involved exorbitant charges of 19.5 cents for every rand of electricity purchased.

He said on May 17, 2013, National Treasury wrote to the City of Tshwane alerting them to the fact that it had not concluded its obligations stipulated in the Municipal Finance Management Act. National Treasury requested the city to provide it with the requisite information for an assessment of the deal.

“The National Treasury completed its assessment of the contract on June 7, 2013 – a week after the council resolution to enter into the contract was taken,” said Middelburg

“The chief procurement officer (National Treasury) Mr Kenneth Brown wrote to the municipal manager…the letter ends with the instruction that ‘the City of Tshwane is advised to put this project on hold and seek the necessary guidance on how to proceed with it from the National Treasury’,” said Middelburg.

He said another letter came from National Treasury on August 29, 2013 advising Tshwane to terminate the PEU contract and to conduct a proper feasibility study.

“This advice was simply ignored by the municipal manager and the mayor. Thereafter, given the city’s complete lack of cooperation with National Treasury, minister Gordhan intervened and personally addressed a letter to the mayor. A meeting was subsequently held between minister Gordhan and the mayor but needless to say his personal intervention fell on deaf ears and failed to bring an end to the PEU contract.”

Asked to explain where the DA had acquired copies of the correspondence, Middelburg responded: “These documents should have been given to us by the municipal manager and the mayor. This is not secret documentation. The documents come from a whistle-blower with direct access to this information. I’m not going to say anything more than that. We will not reveal the person’s identity for obvious reasons because he will be ostracised”.

DA MP Gordon Mackay said the correspondence raised doubt about Gordhan’s competency in his current deployment as local government and traditional affairs minister.

“The magnitude of the problem is R1.4-billion. This is multiple Nkandlas. We have seen the kind of issues raised in Parliament around Nkandla. I think this is an issue we will have to drive through Parliament,” said Mackay.

“We have deep concerns on the fact that the minister of finance refused to act when he had the knowledge against the city of Tshwane and specifically against the mayor. This raises serious questions of his competency in his ongoing capacity to serve within cabinet. We have deep concerns that he is currently the minister of local government, recognising the scale of corruption in local governance.”

The party claims the PEU contract had landed Tshwane in a financial quagmire.

Ramokgopa has repeatedly denied widespread allegations that Tshwane is losing around R1.4-billion in penalties after terminating the lucrative smart meters contract with PEU in May.

Efforts by the African News Agency to get comment from Ramokgopa’s office were unsuccessful.