18 January 2013

South Africa: Public Protector Must Investigate Johannesburg Smart Meter Tender

press release

The Public Protector's office should immediately launch an investigation into the awarding of Johannesburg's R1.25 billion smart meter contract to the Edison Corporation.

The Mail & Guardian today reported extensively on irregularities with the awarding of this tender. There are a number of reported irregularities in the tender process that are of particular concern.

First, the value of the tender was reportedly increased from R800 million to R1.25 billion after it was awarded to Edison. City Power has not provided an explanation for this increase.

Second, the tender was reportedly initially supposed to be split between two bidders. Later it was decided that Edison would receive the entire tender on its own. City Power has not provided a credible explanation for this change.

Third, the Mail & Guardian alleges that Edison did not receive the highest score on either the first or second round of bid scoring, but that Edison was chosen only after scores were adjusted on the instruction of City Power managing director, Sicelo Xulu.

It is concerning that the Edison Corporation is owned and operated by Vivian Reddy, who is a known friend and benefactor of the ANC. Edison was reportedly also not the most cost-effective bid, nor did the company have prior experience in this field.

These accusations cast serious doubt over the legitimacy and integrity of the processes followed in the awarding of this tender. The Public Protector must investigate to answer the following questions:

Why and how were the bid scores changed?

What role did Sicelo Xulu play in changing bid scores?

Is there any financial connection between Mr Xulu, Edison and Vivian Reddy?

Why was the tender inflated to R1.25 billion?

Why did the bid evaluation committee opt to give the tender to Edison alone after initially recommending that it should be jointly awarded to two bidders?

I will be asking these questions in Johannesburg's Municipal Public Accounts Committee as well, but I believe a full Public Protector investigation is warranted given the seriousness of these allegations.

Mmusi Maimane, DA Caucus Leader in Johannesburg

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