CR-linked MTN tender imposed on municipalities

CR-linked MTN tender imposed on municipalities
CR-linked MTN tender imposed on municipalities

President Cyril Ramaphosa is once again implicated in a tender for pals scandal.

While South Africans are fixated on the so-called Government of National Unity (GNU) Cabinet appointment, government has closed a three-year deal with telecoms giant MTN which will see about 257 municipalities digitised through the implementation of smart electricity and water technology across the country.

It is reported that MTN Business has been awarded a contact to roll out smart electricity and water technology. Ramaphosa is said to be in the forefront of this deal.

Municipalities believe this new tender is designed to take power from the municipalities and hand it to big business.

It is still not clear how much MTN would pocket from the deal.

The contract is said to be designed to ‘enhance the digitisation – through the implementation of smart electricity and water technology – across South Africa’s 257 municipalities. The RT29 transversal contract, awarded by National Treasury, will see MTN supply, install, manage and maintain smart metering programmes across the country. The project is said to be ‘severely imposed’ on municipalities.

Ramaphosa’s spokesperson Vincent Magwenya has denied that Ramaphosa was linked to the MTN deal. “Other than the obvious legal and logical fact that the president cannot and does not have any operational involvement at MTN, such a process will not work under the Municipal Finance Management Act (MFMA),” Magwenya explained.

Even though, the presidents spokesperson acknowledged that Ramaphosa did have interest in telecoms, he was no longer part of it. “Historically, he was involved in the industry, which is a well-known public fact.”

However, Ramaphosa’s family, through Shanduka, had interests in the telecoms sector in South Africa and Nigeria. It also held a 32.7% interest in a cellphone tower building operation in Nigeria Helios Towers and 12.5% in Seacom, which constructs undersea cables.

Furthermore, He was also a chairperson of MTN Group, the majority owner of the Nigerian operation. He’s business entity Shanduka also purchased shares in MTN Nigeria.

According to the telecoms giant, this would bring “value and impact” to municipalities as well as unlocking the benefits of a modern connected life for households and businesses.

The company further said its initiative would bring various benefits to different stakeholders within the supply chain, and enhancing efficiency, accuracy and security, while, providing better data access for managing electricity usage which would lead to more accurate billing, improved outage restoration and power quality data.

“The integration of smart electricity and water technology across these municipalities will further solidify financial sustainability for municipalities by eliminating bypasses and ghost vending to ensure transparent and financially viable utility management.”

The Department of Co-operative Governance and Traditional Affairs (Cogta) referred all questions to the Treasury.

In the meantime, the Department of National Treasury acknowledged that the contract was existing adding that the set contract was publicly advertised on October 10, 2023 and closed on November 10, 2023.

“The contract was awarded on April 25, 2024 as a panel contract to seven (7) service providers. Details regarding the awarding of this bid are available on the National Treasury website on the following link:,” National Treasury said.

Treasury continued to say the reason behind the smart meter was that the Metropolitan municipalities in South Africa were expected to generate their revenues from property rates, service fee surcharges, levies, and other taxes from residents and businesses.

Adding that rural and district municipalities, however, still placed greater reliance on national government grants to provide services.

“Taking into consideration the challenges that municipalities are confronted with, the Local Government and Budget Analyst Unit within the National Treasury started the process to have the smart metering solution transversal contract will help rural and district municipalities implement smart technology facilities that will enable municipalities to better collect revenue, as part of the solution to address the challenges facing municipalities in revenue collection”.

According to Treasury the cost associated with these services/contracts would differ from municipality to municipality depending on the services they would opt for and what the contract provides (TID compliance and readiness, Smart meter solution and Smart Load Management Solution).

“However, the grant that the National Treasury has for this project is R2.6 billion which can be accessed by the 71 municipalities that are under the debt relief programme. As this is a panel service contract, it does not provide for a fixed contract value to a specific service provider but is dependent on client base (households and businesses) of each participating municipality who can then contract any of the service providers.

It is expected that municipalities that want to install smart metres or supplement the national allocation with their own budget will also be able to contract any of the service providers in this contract,” the department explained.

The contract is expected to run for a period of three years starting from June 1, 2024 to May 31,  2027.

The Star