City Power cleared of smart meter fraud allegations MyZA

An Independent Review Panel, chaired by Advocate Vuyani Ngalwana SC, has cleared City Power of all allegations of fraud and corruption relating to a tender issued last year for advanced metering infrastructure (AMI).

The tender was issued to Edison Power Group (EPG) in September 2012, but in January this year, a newspaper report alleged there had been manipulation in the tender process, to fix the tender for the benefit of this particular bidder.

At the same period, the Board of City Power immediately appointed an Independent Review Panel consisting of three members of the Johannesburg Bar; Advocate Ngalwana (SC), Advocate Sandile Khumalo, and Advocate Farzanah Karachi.

The panel were given full and complete access to all documents relating to the tender, full and complete access to all staff members involved in the tender process, including people who are no longer in the employ of City Power.

The Independent Review Panel concluded that: “We could find no evidence of improper interference in the bid evaluation process” and “We can find no evidence of irregularity in the award of contract 1907GS.”

“We find no reason to believe that the contract was awarded to EPG on any other basis than that it had obtained the highest overall score.”

City Power’s managing director, Sicelo Xulu has been cleared of all allegations that he interfered with the procurement process to the benefit of a friend of President Jacob Zuma.

“In the result, and on the evidence before the panel, we can find no basis for the imputations that the article sought to make on the managing director.”

The Panel further found “no material discrepancies” between the final scoring and the information provided in the bid documents.

They also found no impropriety in the process of notifying the successful bidder of the award of the contract.

No evidence was found of impropriety in the determination of the contract value. However, the Panel found that the process followed was not ideal.

Advocate Ngalwana and his team are of the view that the approval of a budget should precede the award of the contract, not follow it.

The Panel recommends that City Power should budget properly for key projects and secure budget approvals before going out on tender, even where the budget approvals would extend over a number of financial years.

City Power General Manager: Communications, Sol Masolo, said the company welcomes the report and accepts its findings and recommendations.

What are Smart Meters?

Smart meters are electricity meters which are linked to computer systems. They are also known as Advanced Metering Infrastructure (AMI) and support Automated Meter Reading (AMR).

AMR reports the exact amount of electricity used during a particular period, without requiring physical visits to properties by City Power technicians.

The AMR contributes to billing accuracy, as consumption is monitored in real time and estimated readings will no longer be required.

Smart meters contribute to the stability of electricity supply, as they send an alarm as soon as power is lost or interrupted.

This means unplanned power interruptions can be detected immediately, leading to quicker response and shorter power restoration times. In addition, alarms report any tampering or illegal activities and electricity losses can be monitored.

Customer communication can be improved with the support of smart meters and related infrastructure.

City Power will have the ability to send SMS communication to consumers, notifying them of power interruptions, requesting them to reduce consumption, or to send billing-related information.

Customers will also be able to send SMSs, for example around power interruptions or to request consumption data. – SAnews.gov.za