Fingers pointed at eThekwini Municipality over alleged wasteful expenditure on overpriced smart meters
Image: Supplied
The eThekwini Municipality finds itself under scrutiny once more, amidst concerning allegations of wasteful expenditure following a recent procurement of electricity smart meters.
Officials opted to purchase these devices from the highest bidders rather than the lowest quote suppliers, triggering concern among residents and stakeholders alike regarding potential misconduct and improper financial practices.
Sources indicate that this decision suggests an attempt to bypass a qualified supplier that provided the lowest bid — a move that raises various questions.
In what many perceive to be an alarming indicator of corruption, it has been alleged that officials may seek kickbacks from these more expensive suppliers.
In May 2024, the National Treasury approved the RT29 national transversal contract for smart metering, identifying seven companies for the municipality to choose from for their needs.
However, documents acquired by Independent Media reveal a shocking deviation from standard procurement practices. The eThekwini Municipality ordered 2,000 smart meters priced at R2,591 per unit from one supplier, while another supplier quoted a mere R1,645 per unit. The total cost indicated that the city spent R5.9 million for these overpriced devices.
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This instance of poor financial decision-making apparently didn't stop there. The municipality additionally procured non-smart meters at R1,996 per unit, accumulating a further cost of R4.5 million. With the distinction between smart and non-smart meters being that the former can be remotely disconnected by officials, while the latter necessitates physical travel for disconnection, questions loom large over why non-smart versions were even necessary.
A source privy to the procurement process has expressed concern, stating, 'This is another instance of wasteful expenditure incurred by the city. There was no valid reason why the officials chose to purchase the same product with the same quality from different suppliers with varying prices. Surely, there is something fishy.'
Attempts to obtain clarity from the municipality's communications team went unanswered as of Wednesday, leaving many to speculate on the motivations behind these decisions.
This incident comes in the wake of previous controversies linked to the municipality's financial management. Just recently, the city faced a harsh financial penalty, having to pay over R20 million to a supplier, an amount accumulated from interest on a court appeal that the municipality lost. While the initial amount claimed was R30 million, the city disputed the claims but ultimately lost their case.
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eThekwini Municipality denies purchasing smart meters from seven companies, saying the procurement process is still ongoing. Image: Willem Phungula eThekwini Municipality has denied awarding seven companies to supply electricity smart meters. In a written response to the story that the Independent Media published last week, the city's spokesperson, Gugu Sisilana, said the municipality was not aware of differing quantities being placed across suppliers; therefore, dismissing the assertion of wasteful expenditure. Sisilana said the procurement process is still ongoing. 'The allegations of wasteful expenditure, which are not corroborated by any evidence, are not true. This is due to the fact that the procurement process for electricity meters is still ongoing through the Supply Chain Management process. We are not aware of differing quantities being placed across suppliers,' she said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Despite the city's denial and information obtained from the city's website, it was revealed that indeed the companies were awarded. Independent Media also saw purchase orders matching the companies on the city's website. Sources within the municipality have described the decision to award all the companies as an attempt to avoid awarding the tender to a qualified supplier with the lowest quote. The source said the only possible reason for this was that the officials wanted kickbacks from the highest bidders. In May 2024, the National Treasury approved the RT29 national transversal for smart metering. The Treasury approved seven companies for the city to choose from when buying these smart meters. In the purchase orders, the city ordered 2,000 smart meters from a particular supplier, which cost R2,591 per unit, whereas the other supplier's unit price was R1,645. One provider charged R2,218 per item, while the other charged R1,811. The city had to pay R5.9 million for 2,000 smart meters from the highest-priced supplier, which likewise had a unit price of R2,600. The source said the city also ordered non-smart meters for R1,996 per unit, which totalled R4.5 million for 2,000 units. It is not clear why the city needed non-smart meters and which customers will be supplied with them, whereas others use smart meters. Among the companies are two giant cellular network companies. In contrast to non-smart meters, which require personnel to physically visit the site and disconnect when consumers have circumvented them or established unauthorised connections, smart meters may be switched off by city officials from the office, the source claimed. 'This is another wasteful expenditure the city has incurred, and there is no valid reason why the officials chose to purchase the same product with the same quality from different suppliers with varying prices. Surely, there is something fishy,' said the source. The municipality has been in the headlines for incurring costs that many view as wasteful, stemming from court cases it has lost. It was recently forced to pay a supplier more than R20 million, which was an interest that had accumulated from the court appeals it had finally lost. The supplier had initially demanded R30 million, which the city disputed but lost the appeal.
