Annual report08 Rev7-Edited - City Power Reports/2007_2008 City... · KLOOFENDAL (33/11) HARLEY ST...
Transcript of Annual report08 Rev7-Edited - City Power Reports/2007_2008 City... · KLOOFENDAL (33/11) HARLEY ST...
CITY POWER (PROPRIETARY LIMITED)
Registration No: 2000/030051/07
(In terms of Section 121 of the
Municipal Finance Management Act, 2003 and Section 46 of the Municipal Systems Act, 2000)
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 2 of 63
CITY POWER JOHANNESBURG
(PROPRIETARY LIMITED)
COMPANY INFORMATION: Company Name: City Power Johannesburg (Pty) Ltd
Company Registration Number: 2000/030051/07
Physical Address: 40 Heronmere Road, Reuven
Postal Address: PO Box 38766, Booysens, 2016
Phone Number: (+27) 011 490 7000
Fax Number: (+27) 011 490 7590
E-mail: [email protected]
Web-site: www.citypower.co.za
Customer Contact Centre: JoConnect at (+27) 011 375 5555
Bankers ABSA Bank of SA Limited
Auditors Auditor-General
What business are we in?
City Power is in the business of sourcing, then distributing and selling electricity to its customers.
City Power Annual Report 2007/08
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Where do we sell the electricity?
Geographic service delivery footprint of the City of Johannesburg, with City Power areas in pink on the right.
Measure Indicator Unit 06/07 Actual 07/08 Actual
Eskom supply points No 39 39
High voltage substations (bulk intake points) No 5 5
Medium voltage substations (major substations)
excluding bulk intake substations
No 82 82
Low voltage substations (devices) No 13 800 14 252
High voltage overhead transmission lines >44kV km 789.93 811.00
High voltage transmission cables >44kV km 93.68 93.68
Medium voltage overhead lines >20.5kV and <44kV km 5.95 11.20
Medium voltage cables >20.5kV and <44kV km 46.52 123.30
Ripple relays installed No 178 000 171 860
Ripple relays in-service No 87 000 103 700
#
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#
#
#
#
#
BRYANSTON
FERNDALE
ZOLA
LIN DEN
FAIRLAND
DUBE
JABAVU
KENSINGT ON
HOUGHTO N EST ATE
JABULANI
PARKTO WN
GRASMERE
ALEXAN DRA
KELVIN
NALEDI
BUCC LEUCH
KIBLER PARK
EDENBURG
MORO KA
TLAD I
HORISON
CHIAW ELO
ENNERDALE SOUTH
BRUMA
DOBSONVILLE
NANC EF IELD
FLORIDA PARK
MAPETLA
UNAVILLE AH
MAYFAIR
EMDENI
FLORIDA
W YNBERG
FOURW AYS
PARKVIEW
NAT URENA
PARKMORE
CRAIG HALL PARK
BEREA
PRO TEA NORT H
NEW LANDS
BO SMO NT
KLOOF ENDAL
SANDHUR ST
SELBY
DAINF ERN
ZOND I
ROBERTSHAM
ATHOLL
MO LAPO
TRIOMF
TURFF ONT EIN
CYRILDENE
BRAMLEY
LAW LEY ESTATE
PO ORTJE
W ITPOO RTJ IE
BERARIO
FINETO W N
MELVILLE
NASREC
NORT HCLIFF
W AVERLEY
W ESTC LIF F
MID- ENNERDALE
JEPPESTO WN
OAKD ENE
HURLINGH AM
SUIDERO ORD
VO RNA VALLEY
MO FO LO CENTR AL
OAKLANDS
DISCOVER Y
LAW LEY EXT.1
MOLETSANE
ELDO RADO PARK
MARLBORO
CRAIG HALL
KLIPSPRU IT
LYNDHURST
LAKESIDE EXT.1
RIVERLEA
LENASIA SO UTH
LENASIA EXT.9
TULISA PARK
FLEU RHOF
BASSONIA
LINKSFIELD
BEZUID ENHO UT VALLEY
GREENSIDE
ROSEBANK
NORW O OD
ROODEPO ORT
MARAISBUR G
SO UTH HILLS
QUELLER INA
ROSETTENVILLE
WEND YW O OD
DE W ET SHO F
LINDHAVEN
NOO RDGESIG
GLENESKBO OYSENSMOFO LO NO RTH
HELDERKRUIN
ALAN MANOR
MEREDALE
PAULSHOF
INDUSTRIA
CHLOORKOP
KYA SAND
MAYFAIR WEST
DENVER
RABIE RIDG E
PROTEA GLEN
OPHIRTO N
SUNN INGHILL
ORANG E F ARM
W ILROPARK
LENASIA
HAMBERG
EBONY PARK
RIVERCLUB
GREYMO NT
KLIPSPRU IT W EST
EMMARENTIA
W OODLAN DS
BIRDH AVENRISIDALE
CROW N GARDENS
BLACKHEAT H
BELLE-VUE
DEVLAND
RISANA
KILLARNEY
MO NTG OMERY PARK
AERO TON
FOREST HILL
LOMBARDY W EST
MALANSHOF
INDUSTRIA W EST
BERTR AMS
GALLO MANOR
HORISO N PARK
FLORIDA NO RTH
MMESI PARK
MEADOW LANDS
MULBARTO N
PIMVILLE Z ONE 1
LA RO CHELLE
DHLAMINI
RAND PARKRIF
SLO VO VILLE
ELECTRON
CITY AND SUBURBAN
GRESSWO LD
LONE HILL
DOORNFO NTEIN
ENNERDALE
COUNT RY V IEW
GILLV IEW
LONE HILL EXT .10
KLIPRIV IERSO OG
VREDEDO RP
NOO RDWYK
HURST HILL
LYME PARK
KLEVEHILL PARK
RICHMOND
VALERIEDENE
KYALAMI ESTATE
REUVEN
LIEFDE EN VREDE
TANGANANI
DAINF ERN RIDG E
AMALGAM
ANCHORVILLE
PO WER PARK
TOWN SVIEW
HEADW AY HILL
THETA
HERIO TDALE
KAALFONTEIN EXT .1
MO RET
BERGBRO N
KELLAND
CONSTANTIA KLOOF
SUNDOW NER
W ILGEHEUWEL
EPSOM DOW NS
CREST A
FOUNDER S HILL
EASTG AT E
COMPTO NVILLE
ROO DEKRANS
FAR EAST BANK
FRANKENW ALD
DAVIDSON VILLE
JO HAN NESBURG -NO RTH
LENASIA EXT.4
CITY DEEP
WOLHUT ER
OSUMMIT
JACANLEE
ST RET FO RD EXT .3
CLEVELAND
ORLANDO
BENRO SE
W ITKOPPEN
DALECRO SS
HONEYDEW
ARMADALE
NOORDHANG
ZANDSPRUIT EXT .10
FAIRW AY
SHARO NLEA
GLEN ATHOL
BO SKRUIN
SO UTHG ATE
ROSEACR E
ZAKARIYYA PARK EXT.5
SO UTHF ORK
LENASIA SO UTH EXT.20
MARO ELADAL EXT .11
MAG ALIESSIG
STORMILL
LENASIA SOUTH EXT.6
BARBEQUE DO WNS
RAND JESFON TEIN
MEADOW HURST
BRYANBRINK
ST RIJDOMPARK
RAND LEASES EXT.1
MARYVALE
W ESTBURY
GLENSAN
ILLOVO
MO OD IE HILL
PRINCESS
BRAAMPARK
W ILFOR DON
TRES J O LIE .
KHYBER ROCK
COMMERCIA
CRAMERVIEW
RAND JESPARK EXT .1
LENASIA EXT.12
BELLA IRSPARK
WILLAW AY
HOO GLAND
HALF W AY HO USE
PRO LECON
NORT HGATE
BATAVIA
EAGLES NEST
RUIMSIG
W AT ER VAL EXT .2
PRESIDENT PARK
ST RAT HAVO N
PROTEA INDUSTRIAL PARK
MIDRIDGE PAR K
DRIEZ IEK
FOUNDER S HILL
SEBEN ZA EXT.6
Lenasia
Midrand
Siemert
Randburg
Alexandra
HurstHill
Bryanston
Roodepoort
Klipspruit
Reuven
BO RDEAU X
ESKOM 1
RUGGRAAT
ESKOM 2
EIKENHOFMULBARTON
ZOLA W EMM ER
CROW RHOR NE
MOROKA
DALKEITH
PETER ROAD
LANSER IA
CHARTW ELL
DIEPSLOOT
NIRVANA
KADETT
ELDORADO
SENTRA
OLIVED ALE
PARKHURST
FOURW AYS
NORTHRAN D
ESKOM
LOTUS
ROOSEVELT PAR K
MAPETLA
MOND EOR
ESKOM 9
PAULSH OF
LEAZON IA
LUN AR
MARLBORO
ROBERTSHAM
VORNA VALLEY
CHRISTIAAN DE W ET
GRAN D C ENTRAL
WESTFIELD
W ILROPAR K
BRYNORTH
CROW N
GLEN
PENNY ST
MAYFAIR
DIEPKLOOF
NOORDW YK
W ATERVAL MID RAND
OR CHARDS
NANCEFIELD
MOFOLO
FAIRLAND
BUC CLEUCH
NURSERY
IVOR Y PARK
HOUTKOPPEN
FLORID A
LENASIA
MOFFAT
INDUSTRIA
OBSER VATORY
NORTHRIDING
ESTHER PARK
11TH SHAF T
DOORNKOP
LENASIA SOUTH
MEGAW ATT
ALLENDALE
ON TDEKKERS
ENN ERDALE
CITY SANDS
W IN DSOR
LEEU KOP
BORD EAUX
NOORDW YK (ESKOM)
BEAULIEU
JAGUAR
ROBERTVILLE
KLEVEBANK
EDENVALE IN D
PHOSPHATE
RIDGE
FLORID A GLEN
EDENVALE
DAINFERN
HOPEFIELD
FON TAINBLEAU
MANUFACTA
RIVIERA
BOND ST
COOKE 1
KLOOFEND AL (33 /11)
HARLEY ST
BARAGW ANATH
HURLINGH AM
KL IPFONTEIN V IEW
CHARTW ELL 1
NEW TOW N
FORD SBURG
N
EW
S
City Power A rea
Eskom Area
Distribution Areas
Area Boundaries
DEPOT SITES
# Alexandra
# Bryanston
# HurstHill
# Klipspruit
# Lenasia# Midrand# Randburg# Reuven# Roodepoort# Siemert
Substation Zones
LEGEND
PUBLIC LIGHTING
01 MAY 2006
DISTRIBUTION AREA SOUTH
DISTRIBUTION AREA NORTH
DISTRIBUTION AREA NORTH
City Power Annual Report 2007/08
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Customer Statistics
Customer Type 06/07 Actual 07/08 Actual
Agricultural 36 34
Key customers 153 162
Large power users 4 343 4 343
Business 12 542 12 524
Prepayment 86 768 94 854
Domestic 211 204 188 096
Total 315 030 300 013
City Power bulk purchases
06/07 Actual 07/08 Actual
GWh 12 900 13 091
Direct cost (Rm) 2 439 175 2 795 652
Vision
To be a world-class electricity distributor
Mission
To meet the expectations of customers and stakeholders by:
• Providing a sustainable, affordable, safe and reliable electricity supply
• Providing prompt and efficient customer service
• Being a preferred equal opportunity employer through development and incentives
• Undertaking our business in an environmentally acceptable manner
Operating principles
Be a customer-centric organisation
Be a seamless value chain-driven organisation
Maximise technology enablement
Show zero tolerance for poor performance
Make sure all investment decisions are business case-driven
Provide one-stop service, and do it right the first time
Values
Resourceful Reliable Resilient Respectful
Always with integrity
Strategy
Service People Infrastructure
Management style
Improve climate
The right people in the
right places
Training in key areas
Prioritise social transformation
(public lighting/electrification)
Seek more revenue
Loss reduction
Replacement and upgrades
Expand network
Maintenance
Demand-side management
Alternative energy sources
City Power Annual Report 2007/08
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TABLE OF CONTENTS Chapter 1: Introduction and Corporate Profile ............................................................................................... 7
Section 1: Corporate Profile / Overview of the entity ............................................................................ 7 Section 2: Strategic Objectives ............................................................................................................ 7 Section 3: Foreword by Member of the Mayoral Committee ............................................................... 11 Section 4: Chairperson’s Foreword .................................................................................................... 12 Section 5: Managing Director’s Report ............................................................................................... 14 Section 6: Report by Audit Committee ............................................................................................... 14
6.1 Report of the Audit Committee in terms of the regulation of section 12.4 of Municipal Finance Management Act.......................................................................................................... 14
Chapter 2: Performance Highlights ............................................................................................................. 16 Section 1: Highlights and Achievements ............................................................................................ 16 Section 2: Financial Performance ...................................................................................................... 17
2.1. Revenue ............................................................................................................................. 17 2.2. Results of Operations ......................................................................................................... 17 2.3. Balance Sheet .................................................................................................................... 19 2.4 Cash Flow ........................................................................................................................... 20
Section 3: Capital Projects ................................................................................................................. 20 Section 4: Performance against Integrated Development Plan (IDP) and City Scorecard .................. 22
4.1 Assessment of Critical Areas ............................................................................................ 24 4.2 Financial Performance ...................................................................................................... 30 4.3. Assessment of other IDP Criteria ...................................................................................... 31
Section 5: Assessment of arrears on municipal taxes and service charges ........................................ 33 5.1 Assessment of municipal taxes and service charges owed to City Power ......................... 33 5.2 Assessment owed by City Power for service charges ....................................................... 33 5.3. Assessment of directors’ and senior managers’ municipal accounts ................................. 33
Section 6: Statement on amounts owed by Government Departments and Public Entities................. 35 Section 7: Recommendation and Plans for Next Financial Year......................................................... 40
7.1 Key Focus Areas for the 2008/09 Financial Year .............................................................. 40 Chapter 3: Directors’ Report and Governance ............................................................................................ 41
Section 1: Corporate Governance Statement ..................................................................................... 41 Section 2: Board of Directors ............................................................................................................. 42 Section 3: Board Committees ............................................................................................................ 43
3.1 Audit Committee ............................................................................................................... 44 3.2 Human Resources and Remuneration Committee ............................................................ 44 3.2 Pricing and Regulatory Committee ................................................................................... 44 3.3 Board Oversight Committee.............................................................................................. 44 3.4 Ad Hoc EDI Working Group .............................................................................................. 45
Section 4: Directors’ Remuneration .................................................................................................... 45 Section 5: Company Secretarial Function .......................................................................................... 46 Section 6: Risk Management and Internal Controls ............................................................................ 46
6.1 Overview .......................................................................................................................... 46 6.2 Risk Management Process ............................................................................................... 47
Section 7: Internal Audit Function ...................................................................................................... 53 Section 8: Response to the Auditor-General Report ........................................................................... 53 Section 9: Corporate Ethics and Organisational Integrity ................................................................... 53 Section 10: Sustainability Report ....................................................................................................... 53
10.1. Social Development .......................................................................................................... 53 10.2. Environmental Development ............................................................................................. 53 10.3 Economic Development .................................................................................................... 54
Section 11: Corporate Social Responsibility Report ........................................................................... 54 11.1 Youth economic development ........................................................................................... 54 11.2 Early childhood development ............................................................................................ 54 11.3 Women Development ....................................................................................................... 54
Chapter 4: Human Resources and Organisational Management ................................................................ 55
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Section 1: Human Resource Management ......................................................................................... 56 Section 2: Employment Equity ........................................................................................................... 56 Section 3: Skills Development and Training ....................................................................................... 56 Section 4: Performance Management ................................................................................................ 57 Section 5: HIV/AIDS in the workplace ................................................................................................ 57
5.1 HIV/Aids structures ........................................................................................................... 57 5.2 Education ......................................................................................................................... 57 5.3 Monitoring and measuring performance ........................................................................... 57 5.4 Case management ........................................................................................................... 57
Section 6: Employee Benefits ............................................................................................................ 58 Section 7: Supply chain management and black economic empowerment ........................................ 58
Chapter 5: Functional Area Service Delivery Reporting ............................................................................. 59 5.1 Finance and Administration .............................................................................................. 60
Chapter 6: Audited Statements and Related Financial Information ............................................................. 62 ACRONMYS ............................................................................................................................................... 63
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 7 of 63
Chapter 1: Introduction and Corporate Profile
Section 1: Corporate Profile / Overview of the entity
City Power Johannesburg (Pty) Ltd (City Power) was established in 2000 as an independent municipal entity,
wholly owned by the City of Johannesburg, to supply electricity to approximately 300 000 customers; ranging from
domestic to commercial and industrial properties. City Power is accountable for providing network services to all its
customers. The City of Johannesburg (CoJ) provides retail customer services for all domestic customers, ie
processing applications, customer queries, customer complaints, customer accounts and revenue management. City
Power provides retail customer services to key customers, commercial and industrial customers and prepaid
customers.
The core competency of the business is the purchase, distribution and sale of electricity within the geographical
footprint of the City of Johannesburg. The National Electricity Regulator of South Africa (NERSA) granted City
Power a licence to trade on 19 December 2001. City Power is not the sole provider of electricity services for the
CoJ. The areas not covered by City Power (predominantly Soweto and Sandton) are serviced by Eskom.
Section 2: Strategic Objectives
The CoJ has a growth and development strategy (GDS), which is translated into the integrated development plan
(IDP). City Power influences the GDS’s many sectors and principles, but most of the company’s influence resides
in the infrastructure and services sector. The company’s priorities are in line with the GDS, IDP and strategic
framework of the shareholder. The infrastructure and services sector’s five-year sector plan is:
A city with a backbone of efficient and well-maintained service infrastructure, extended to all, so that all citizens
and stakeholders can access an expanding package of innovative, safe, reliable and affordable services.
LONG-TERM
GOALS
LONG-TERM
STRATEGIC
INTERVENTIONS
5-YEAR
STRATEGIC
OBJECTIVES
DELIVERY AGENDA
FOR 2007/08
STATUS
1. Extend a
differentiated
package of
service that is
fit for purpose,
affordable and
reliable in
accordance
with national
policy
commitments
and an agreed
local definition
of appropriate
levels of
service
Eliminate all
backlogs
Access to basic
services
Distribute
electricity to at
least 95% of
formalised
households
17 000 dependent on
housing and funding
9 057 new
electrification
customers
Provide street
lighting to 95% of
formal areas in
Johannesburg…
however City
Power will only
achieve 65%
because of
continued
budgetary
constraints
The target for 07/08
is 2%, which entails
a move from 60% to
62% cumulative,
taking the number of
public lights to
182 000
61% public lights
provided
Provide street
lighting to 60% of
informal
settlements
A target of 10% in
identified high-crime
areas
12% street lights
provided in
informal
settlements
95% street lights
provided in high-
crime areas
Increase allocation
of free basic
All households in the
city’s indigent list
Free basic
electricity
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 8 of 63
LONG-TERM
GOALS
LONG-TERM
STRATEGIC
INTERVENTIONS
5-YEAR
STRATEGIC
OBJECTIVES
DELIVERY AGENDA
FOR 2007/08
STATUS
electricity to poor
households and
those with special
needs
are provided with
free basic electricity
provided to
230 408
2. Extension
and
maintenance of
reliable and
competitively
priced
services, as
required by
commercial
and
institutional
consumers
Contribute to
meeting the
management needs
of the city, within a
competitive
industry
environment
Reduce losses from
2% to 1%
12% total losses,
equal to R532m
12.63%
Reduce electricity
outages by 50% by
year 2010 (bulk,
medium and low
voltage)… however
City Power will
only achieve 30%
because of
budgetary
constraints in
07/08
Develop an asset
maintenance
management
strategy.
City Power to reduce
bulk outages to 104
and MV outages to
1 000. The
planned/unplanned
ratio to 75:25; to be
able to reduce
electricity outages by
30% in 2010, City
Power and future
energy distribution
and demand
requirement will be
evaluated and a
strategy developed to
secure supply. This
will include
examining supply
capacity from
various supply
points. Develop an
asset maintenance
management support
services programme
to enhance, support
and sustain an
improved plant
maintenance strategy
Bulk outages: 80
Bulk outages
NPR: 78
MV outages:
1 334
MV outages
NPR: 916
Planned/
unplanned ratio=
75:25
Asset
maintenance
management
strategy in place
Meet the electricity
needs of all
commercial and
bulk electricity
users in the city,
within the
framework of RED
Through efficiency
improvements,
reduce the cost per
capita in operating
Investigation of
energy-use patterns
in low-income
residential areas,
including the inner
city;
Investigation of
relationship between
use per capita and
use per consumer
unit;
Identifying areas
Implemented
tariff plan
City Power Annual Report 2007/08
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LONG-TERM
GOALS
LONG-TERM
STRATEGIC
INTERVENTIONS
5-YEAR
STRATEGIC
OBJECTIVES
DELIVERY AGENDA
FOR 2007/08
STATUS
expenditure for
running and
maintenance of all
service networks
where a revised
approach is
necessary (eg tariff
model to suit specific
areas); and
recommendations for
tariff adjustments for
2007/08 will be
prepared.
3. Service
delivery is
secured
through well-
designed, well-
integrated and
well-
maintained
generation/
supply
processing and
distribution
networks
Ensure integrated
design and
maintenance
planning for all
infrastructure, to
realise manageable
recurrent costs and
extended life of
service networks
Reduce illegal
electricity
connections
Implement
comprehensive
strategy on reduction
of illegal
connections, subject
to funding
availability. This
includes:
*Continued customer
education
programmes in
targeted areas
*Working with
JMPD to remove
illegal connections
*Continuous roll-out
of protective
structures, to reduce
tampering with
conventional meters
and street light poles
*Promote alignment
with the city’s debt
write-off and
indigence support
programmes
* Continued
installation of
prepayment meters
Comprehensive
strategy
implemented
4. Display
leadership in
sponsoring and
adopting
innovative, yet
locally
relevant,
technologies
and delivery
capabilities
that enable
Ensure investments
that extend the
service life of
infrastructure are
within cost-
effective thresholds
and technical
tolerances
Implement at least
five innovative
technologies in
service delivery
Turbines reinstated
subject to funding
Turbines
refurbished
Roll out AMR AMR rolled our
DSM/EE Integrated energy
planning under
way
Network protection
technology
Continued
research and
City Power Annual Report 2007/08
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LONG-TERM
GOALS
LONG-TERM
STRATEGIC
INTERVENTIONS
5-YEAR
STRATEGIC
OBJECTIVES
DELIVERY AGENDA
FOR 2007/08
STATUS
new service
offerings and
ongoing
efficiency
improvement
across all
service areas
implementation
of NPT
Contribute to
research and
industry
development by
sponsoring and,
where appropriate,
adopting new
technologies that
enable service
efficiency and
quality
improvements,
especially those
relevant to
developing
world/city contexts
Develop and
implement
comprehensive
demand-side
management
programmes for
energy
Development and
implementation of a
demand-side energy
management
programme.
By-law support for
installation of ripple
relays in hot water
geysers in new
developments.
Environmental
management unit will
continue to address
the conservation
awareness
programme in 07/08
financial year.
Demand-side
energy
management
developed and
implemented
By-law currently
being developed
5. Maintain a
regime of
responsible
service
delivery
regulation and
stakeholder
interaction
Maintain and
improve service
delivery efficiency
levels through
progressive and
continuous
improvement
Support
establishment of
RED
Currently
participating at
different
structures.
Supporting and
taking direction
from CoJ
City Power Annual Report 2007/08
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Section 3: Foreword by Member of the Mayoral Committee
The past year was an eventful and challenging period for the energy
industry worldwide. The City of Johannesburg and City Power did
not escape the impact of the global economic slowdown, nor the
specific effects of the shortages experienced by the country’s energy
provider, Eskom.
However, the fact that City Power managed to meet these challenges
and continued to deliver on its mandate to provide affordable
electricity to the people of Johannesburg speaks volumes about the
quality of management, and the dedication and commitment of
everybody in the organisation.
We have reached the mid-term point of the current mandate of the
City Council of Johannesburg. This enables us to reflect on our
achievements in meeting our broad goals of creating a better life
through the provision of affordable and reliable services and
infrastructure – of which electricity is an essential component.
It is pleasing to note that City Power is meeting these objectives
despite the challenging national and global energy environment. This is reflected in the reduced level of outages,
increased expenditure on public lighting and expansion of our services into new areas.
Our objectives for the next five years are set out in the City of Johannesburg’s growth and development strategy,
which includes the following key issues:
• Development and implementation of an energy plan
• Implementation of a street lighting programme
• Expanding the provision of street lighting in informal settlements
• Assisting in establishing the regional electricity distribution (RED4) area
• Eliminating backlogs in service infrastructure replacement and maintenance, and ensuring ongoing
adherence to an asset maintenance and normalised life cycle replacement plan
• Stepping up city-wide education programmes on energy conservation
• Providing and implementing alternative energy sources to address demand-side management.
The energy shortfalls experienced during the year have brought home the importance of energy efficiency and
conservation to industrial, commercial and private consumers in the city. This, I believe, has opened fertile ground
for robust education and information campaigns to inform the people of Johannesburg about the need for
conservation, and show them ways in which they can contribute to demand-side management.
It has also prompted City Power to look again at its own strategies and efficiencies, and to explore new avenues for
energy generation. As the leading industrial and commercial city on the continent of Africa, Johannesburg, through
City Power, has to be on the cutting edge of global trends in the energy field.
In the midst of a hectic and challenging year, City Power again received an unqualified audit report. I want to
recognise the effort and commitment of City Power’s board and management. Your efforts have also inspired the
employees of the organisation, and helped move us closer to our objective of delivering reliable, quality and
affordable services to residents and businesses in the City of Johannesburg.
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 12 of 63
Section 4: Chairperson’s Foreword
This financial year has been the most challenging period in the young life of our
company and arguably in the South African electricity industry. These external
challenges have had a direct and indirect impact on the performance of the company.
By providing electricity, City Power plays a central role in the economic and social
life of all communities in our area of supply. This role often goes unnoticed, until
those extremely regrettable times when our customers have to endure power
interruptions. We acknowledge that our service delivery is perhaps the most visible,
and therefore its sudden absence causes a considerable shock to the functioning of
everyday life.
The national capacity challenge City Power realised that South Africa faced a nation-wide crisis, and speedily responded with concrete options for
dealing with the issue. We engaged all stakeholders and developed a workable compromise which piloted a
controlled rotation of available electricity between all our customers on a four-hourly load-shedding cycle. This
initiative was then rolled out by Eskom to the rest of the country and ensured an equitable sharing of the burden of
shortages.
City Power also took immediate steps to attempt to supplement the supply shortage from Eskom through alternate
sources. Management engaged Kelvin Power to assist in increasing capacity from Kelvin Power Station. City Power
also refurbished its own gas turbines. City Power’s leadership helped avert a more drastic impact on the economy.
This came, however, at huge financial cost to City Power. We are currently examining ways to finance the huge
running costs of these initiatives to avoid load shedding wherever possible. However, the crisis will be with us for
the foreseeable future, as Eskom forecasts that supply shortages will persist until at least 2013 when some of its new
coal-fired and peaking stations come online.
Demand-side management (DSM) In response to global warming, City Power realised early on that its customers would need to change their
electricity-use habits. We live in a society whose lifestyle necessitates increasing demand for energy almost daily.
On a global scale, some experts say our energy demands have already exceeded the sustainable use of resources like
coal and oil. Prior to the load-shedding crisis, our commitments to reducing energy demands were linked to political
commitments. With the advent of this crisis, we all experienced a real and shocking demonstration of the limitation
of our resources. City Power, in partnership with the shareholder, is already at the forefront of managing demand by
means of ripple control of geysers in a number of areas, and has embarked on an accelerated programme to roll
these out to more areas. This helps us in mitigating load shedding. It also helps us to manage the use of electricity,
to maintain a constant rate of use while avoiding massive peaks and dips in supply and demand.
City Power is also investigating new technologies and other initiatives to promote energy efficiency, and obtain a
sustainable reduction in load without affecting growth. As part of these initiatives, we are actively engaged in a
programme to replace conventional geysers with solar water heaters.
Financial performance In the 2007/08 financial year, City Power built on the successes of the previous financial year, especially in the area
of governance and transparency that resulted in an unqualified audit for the second successive financial year.
However, for the 2007/2008 financial year, City Power has recorded an accounting loss of about R48.3m.
Capital expenditure City Power is committed to building additional capacity on the network while refurbishing the existing network. As
in the previous year, we have met all our capital expenditure targets for this year. Our forward planning has resulted
in an effective build programme, limited only by our ability to obtain funding for the related costs.
Shareholder compact The board and management remain committed to continuous improvement in attaining strong financial and
operational results, and contributing to the vision of a world-class African city. We gratefully acknowledge the
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continuing support of the shareholder unit and the member of the mayoral committee: infrastructure services in
helping the company achieve its deliverables.
The strategic priorities of the shareholder, as always, drive our tactical plans. Significant attention is paid to
ensuring that these priorities are implemented in the form of measurable deliverables. We continue to focus our
attention on improving initiatives for expanded public works programmes, procurement from suppliers that comply
to BEE, reducing outages, achieving a sustainable reliable quality of supply and increased expenditure on public
lighting to ensure our delivery on the mayoral priorities.
Conclusion City Power is fortunate to have had a stable board throughout the financial year, with the exception of the director
of finance who resigned at the end of the period. I thank my fellow board members for their dedication and
commitment to City Power. I also thank the chairpersons of the sub-committees for their unending assistance in
making this an effective board.
Finally, I thank the employees of City Power for their dedication and professionalism, particularly during one of the
most challenging crises ever to face this business. We are now stronger, more agile, and more effective in our
response to the needs of the communities we serve and our shareholder. The board and management are committed
to ensuring good corporate governance and transparent compliance to legislation while delivering an improving,
sustainable and reliable service.
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Section 5: Managing Director’s Report
The period ending 30 June 2008 has been an exciting, yet challenging, one
for the company. While we successfully faced the demanding task of
reducing the high levels of outages experienced by our stakeholders in the
previous year, we were challenged by Eskom’s need to meet national
demand for electricity.
I am pleased to report that the company produced a commendable
performance in the face of these challenges. Some highlights included:
• The conversion of high-consumption customers to automated meter
reading
• An improvement in customer satisfaction targets
• Reduced query resolution times
• The installation of protective structures to curb illegal connections
• Reduction of outages
• The development of a disaster management strategy and implementation plan
• Improved planned maintenance and response times
• Exceeding electrification targets
• Exceeding the expanded public works programme (EPWP) job-creation targets
• The accreditation of the City Power training centre by E.SETA
• Achieving a clean audit report for the second year running.
Unfortunately, there were some targets we were unable to meet, mostly due to Eskom’s challenge in meeting
national demand for electricity. Our response to this challenge resulted in significant additional costs in our
operating expenditure.
It is concerning to note that there were four public fatalities as a result of illegal connections. We will continue to
educate the public on the dangers of illegal connections, and increase our efforts to remove such connections.
Despite a comprehensive customer education programme, theft and vandalism on the network increased due to
power interruption during load-shedding and the increased price of copper. These factors were responsible for the
poor performance on some of our key performance indicators or KPIs.
While City Power faces the serious challenges noted above, we are committed to continually improving our
performance as reflected in our 2008/09 shareholder compact. City Power is a service delivery-oriented organisation
and I acknowledge the individual and group contributions of our staff in striving to be a world-class service
provider.
Section 6: Report by Audit Committee
6.1 Report of the Audit Committee in terms of the regulation of section 12.4 of Municipal Finance
Management Act
The audit committee has adopted appropriate formal terms of reference as its committee charter, has regulated its
affairs in compliance with this charter, and has discharged all the responsibilities contained therein.
In the conduct of its duties, the audit committee has, inter alia, reviewed the following:
• The adequacy, reliability and accuracy of financial information provided by management and other users of
such information
• Effectiveness of internal control systems
• Effectiveness of business planning and budget implementation
• Effectiveness of the risk management process
• The risk areas of the entity’s operations covered in the scope of internal and external audits
• Accounting and auditing concerns identified by internal and external audits
• Compliance with legal and regulatory provisions
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• The effectiveness of the internal audit department
• The activities of the corporate internal audit department, including its annual work programme,
coordination with the external auditors, reports of significant investigations and responses of management
to specific recommendations
• The independence and objectivity of the external auditors.
Based on the information and explanations provided by management and the corporate internal audit department,
along with discussions with the Office of the Auditor-General on the result of its audits, the committee believes
internal accounting controls are adequate to ensure that financial records may be relied on to prepare the financial
statements, and that accountability for assets and liabilities is maintained. The committee is satisfied with the
independence and objectivity of the external auditors.
Nothing significant, other than issues detailed in the directors’ report, has come to attention of the audit committee
to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred
during the financial year under review.
The audit committee is satisfied that the financial statements are based on appropriate accounting standards and
policies, supported by reasonable and prudent judgements and estimates.
The audit committee has evaluated the financial statements of the company for the year ended 30 June 2008 and,
based on the information provided to the committee, considers that they comply, in all material respects, with the
requirements of the Companies Act, 61 of 1973, as amended, and the Municipal Finance Management Act, 53 of
2003, as amended, and International Financial Reporting Standards. The committee concurs that the adoption of the
going-concern principle in preparing the financial statements is appropriate. The committee therefore
recommended, at its meeting on 7 November 2008, the adoption of the financial statements by the board of
directors.
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Chapter 2: Performance Highlights
Section 1: Highlights and Achievements
City Power has met and exceeded most key performance indicators for the 2007/08 financial year. Highlights of
these achievements include:
• An unqualified audit report
• Prompt response to the national energy crisis
• The number of new electrifications was 9 057, surpassing the target of 5 800
• Exceeding target on payment levels for both key customers at 100.38% and LPU customers at 99.42%
• Exceeding target on bulk outages
• 100% of the capital budget was spent on improving and upgrading the network
• Fault restoration times in general were within set targets. There were significant improvements to the 7.5-
hour and 24-hour targets compared to the previous financial year.
• Compliance with NRS 048 standards, which relate to quality of supply, were exceeded in all categories,
namely rural, industrial and domestic.
• Query resolution times of 3.37 days are significantly lower than the targeted 10 days, and the prior year’s
14 days.
• 3 828 jobs were created in the expanded public works programme.
• The employment equity target for supervisory positions and above was 70%, which was achieved. The
gender equity ratio of 24% exceeded the 22% target.
• The black empowerment expenditure on procurement for 07/08 at 73% of total exceeded the targeted 70%.
• Expenditure related to women-owned suppliers was 23% of total expenditure.
NEW 45 MVA TRANSFORMER
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Section 2: Financial Performance INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT YtdYtdYtdYtd YtdYtdYtdYtd YtdYtdYtdYtdActualActualActualActual ActualActualActualActual BudgetBudgetBudgetBudgetR000R000R000R000 June 07June 07June 07June 07 June 2008June 2008June 2008June 2008 June 2008June 2008June 2008June 2008Total IncomeTotal IncomeTotal IncomeTotal Income 3,925,218 4,291,012 4,350,347 TurnoverTurnoverTurnoverTurnover 3,821,923 4,199,985 4,244,775Other IncomeOther IncomeOther IncomeOther Income 103,295 91,027 105,572Cost of salesCost of salesCost of salesCost of sales (2,429,349) (2,795,652) (2,713,406)Gross profit marginGross profit marginGross profit marginGross profit margin 1,495,869 1,495,360 1,636,941Gross profit %Gross profit %Gross profit %Gross profit % 38.1%38.1%38.1%38.1% 34.8%34.8%34.8%34.8% 37.6%37.6%37.6%37.6%Operating overheadsOperating overheadsOperating overheadsOperating overheads (1,173,770) (1,315,797) (1,245,445)Operating profit before interest and taxationOperating profit before interest and taxationOperating profit before interest and taxationOperating profit before interest and taxation 322,099 179,563 391,496InterestInterestInterestInterest (203,626) (228,071) (246,450)Profit/loss before taxationProfit/loss before taxationProfit/loss before taxationProfit/loss before taxation 118,473 (48,508) 145,046TaxationTaxationTaxationTaxation (42,283)Retained profit/(loss) for the period Retained profit/(loss) for the period Retained profit/(loss) for the period Retained profit/(loss) for the period 118,473 (48,508) 102,763
2.1. Revenue
Turnover for the year under review was R4,3 billion, 1% below budget due to the impact of load-shedding.
Turnover is R378 million higher than the previous year.
Volumes were below budget by 1.3%. The decrease in volumes sold is due to load-shedding. The average selling
price of 36.42c/kwh is 2.6% greater than the budget of 35.48c/kwh. Volumes sold are only 1.8% above the previous
year, while the average selling price per unit is 8.6% higher than the prior year. Included in turnover are actual
service connection fees of R37m, which were below budget by R35m due to decreased demand and capacity
restrictions.
Other income
The income for the year of R91 million is R15 million below the budget of R105 million, resulting from the
increased amortisation period for deferred income.
2.2. Results of Operations
Cost of sales
The year-to-date expenditure of R2.8 billion exceeds the budget of R2.7 billion by 3.0% or R82 million. Volumes
are below budget by 0.5%. The average unit price of 21.28c/kwh is 4.3% greater than the budgeted cost due to
higher purchase prices from Kelvin Power.
Total losses
Total volume losses for the year were 12.63%, 0.63% worse than the budgeted amount. Losses increased from the
prior year’s 12.1% with load-shedding being a major contributor.
City Power has accepted the industry norm of 9% for technical losses.
Billing losses were thus 3.63% compared to the budgeted 3.00%.
Operating expenses
Total operating expenditure for the financial year of R1 316 billion is 5.0% or R71 million more than the budget of
R1 245 billion. Over-expenditure was attributable to the following factors.
• Repairs and maintenance expenditure of R197 million is 53% more than the budget of R128.7 million,
given that essential repairs to the network have to be carried out when outages occur. Load-shedding
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resulted in increased repairs to the network due to switching equipment off and on, network tampering and
more cable theft incidents.
• General expenses of R423.5 million are 12.7% above the budget of R375.8 million because stores and
materials, technology, meter-reading costs, security costs, cut-off fees, meter audits and illegal connections
all exceeded budget.
Expenditure is R142 million more than the prior year. The major increases were:
• Employee costs rose by R48 million as a result of inflationary increases and provision for bonuses.
• The company carried the cost of providing free electricity to Eskom customers living in the CoJ area
(R20 million).
• Repairs and maintenance cost increased by R86 million as part of the effort to reduce outages because of
the increase in cable theft and network tampering.
• Security costs increased by R8,5 million with the increased number of capital projects.
• Meter audits and illegal connections have increased by R12 million as improved metering initiatives were
implemented.
• Depreciation increased by R21 million as a result of increased capital expenditure.
This over-expenditure has been reduced by the following savings:
• Salaries, expenditure reflected against salaries of R447 million is R13 million less than budget. This is due
to the fact that salary disparities and hot skills allowances, as budgeted, have not been effected.
• Bad debts provision is 19.4% or R27.3 million below budget. The current calculation for bad debt provision
shows it is sufficient to cover debt older than 90 days.
• Depreciation of R127.1 million is 12.3% less than budget because actual expenditure was based on the new
lifespan of assets as per the revised useful lives policy.
Net interest
Net interest of R228 million is R18 million below the budget of R246 million, because of:
• Interest payable to the city for new capital loans
• Fair value adjustments: R25 million more than budget, while interest receivable is R43 million higher than
budget because of fair value adjustments.
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2.3. Balance Sheet
Details Actual Actual Budget
2006/2007 2007/2008 2007/2008
R000 R000 R000
Assets
Non Current Assets
Employment of Capital
Fixed assets (net book values) 3,501,547 4,411,170 3,737,703
Current Assets 1,978,545 1,490,520 1,461,762
Total Employment of Capital 5,480,092 5,901,690 5,199,465
Equities and Liabilities
Capital and Reserves 921,433 872,925 629,913
Non-Current Liabilities 3,295,242 3,747,040 3,258,976
Current Liabilities 1,263,417 1,281,725 1,310,576
Total Equities and Liabilities 5,480,092 5,901,690 5,199,465
Fixed assets
Total fixed assets were R4.4 billion for the financial year under review. Capital expenditure of R1 billion was spent
during the year.
Current assets
Total current assets of R1.49 billion compared to budget of R1.46 billion. The reasons for this variance of R28
million include:
• The variance on net debtors’ was R54 million less than budget because of the increase in payment levels
• Stock and inventory holdings of R28 million were R4 million more than budget primarily as more stock
was purchased during June 2008 due to the increase in repairs and maintenance requirements.
Shareholder funds
Shareholder funds at 30 June 2008 amounted to R872 million which is better than budget due to the write back of
deferred tax to retained income.
Non-current liabilities
Total non-current liabilities were R3.7 billion, R0.4 billion above budget of R3.3 billion.
These variances relate to:
• Loans from shareholders of R2.7 billion being R0.5 billion more than budget
• Deferred income being R5 million below budget because of the adjustment of lower grants received
• Deferred tax write back to retained income.
Current liabilities
Current liabilities of R1.3 billion are R29 million less than budget. The main reasons are the short-term portion of
the loans of R295 million is less than budget, while outstanding and trade creditors and accruals and provisions have
exceeded budget.
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2.4 Cash Flow
The closing net cash position was R366 million, R295 million less than budget.
Section 3: Capital Projects
The 2007/8 year-end capital expenditure is at R1 037 720 000 against the total revised budget of R1 034 923 000;
this translates to 100% capital expenditure for City Power. As part of the year-end budget revision, the following
changes have been effected:
• Electrification budget has increased to R62.9 million, due to grants received from DME
• Service connection budget has increased to R140.4 million, due to the customer contribution resulting from
an increase in service connections
• Load management/DSM also increased our budget by a factor of R100 million, of which 50% was spent on
gas turbine refurbishment, and the balance on DSM-related initiatives (eg ripple controls, solar lighting,
intelligent metering and energy-efficient initiatives, including communications).
The controllable year-end expenditure is at R754.6 million, equalling the revised controllable budget (including
DSM) and translating to 100% year-end expenditure. The non-controllable year-end expenditure also matched the
total revised budget at R280.3 million, which translates to 100% year-end expenditure.
Detailed analysis of 2007/8 projects was conducted in the third quarter to ascertain if the annual budget would be
adequate to complete current projects under construction. The analysis revealed that if construction continued at the
same pace as previous quarters, the current budget would be exceeded. As a result, to avoid over expenditure, it was
resolved that some of the project scope will be reduced or deferred to future financial years.
The table below highlights capital expenditure per category. The major budget reallocation took place between the
categories of bulk infrastructure and upgrading electrical network infrastructure. This is due to challenges
experienced in distribution infrastructure (upgrade of electrical network infrastructure) with network overload,
unplanned outages and emergency replacements of obsolete distribution equipment.
To accommodate the upgrading of electrical network category expenditure, some bulk infrastructure projects and
delivery of major equipment were deferred to the 2008/9 financial year, due to restrictions on availability of
funding. The lack of funding is affecting both the supply of electricity and the network, while delays in
infrastructure upgrades and replacement will ultimately impact the profitability and the business as a going concern.
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TABLE 1: CAPEX per category, July 07 to June 08
Details
Original
budget
Revised total
budget
Total
expenditure
(incl accruals) Variance
Electrification 15,000,000 62,893,911 60,553,171 2,340,740
Service connections 89,700,000 140,440,669 139,968,764 471,905
Township reticulation 8,000,000 12,092,815 12,092,815 0
Upgrading electrical network 93,500,000 272,033,061 277,881,711 -5,848,650
Network development 3,959,485 3,959,485 0
Building alterations 500,000 2,743,365 1,487,465 1,255,900
Office equipment/computers 3,040,000 3,968,975 3,968,975 0
Computer software 17,160,000 15,216,296 15,216,296 0
Tools and loose gear 1,500,000 2,156,410 2,156,410 0
Plant and machinery 16,200,000 1,673,912 1,673,912 0
Meters 34,300,000 85,705,691 85,705,691 0
Load management 21,000,000 50,374,360 51,356,717 -982,357
Scada 6,000,000 10,311,764 10,311,764 0
Protection 1,000,000 243,576 243,576 0
Furniture 100,000 991,769 991,769 0
Public lighting 41,000,000 54,400,277 55,237,656 -837,379
Refurbish bulk infrastructure 528,200,000 297,963,510 297,928,561 34,949
Insurance 17,753,154 16,971,264 781,890
TOTALS 876,200,000 1,034,923,000 1,037,720,000 2,797 000
NEW 88kV JUNCTION YARD
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Section 4: Performance against Integrated Development Plan (IDP) and City Scorecard
Key performance indicator Unit of measure Actual
2006/2007
Target
2007/2008
Actual
2007/2008
Dwelling units with access to a
basic level of electricity (excl
Eskom areas)
No
326,990 326,990 300,013
Prepaid customers No 86,768 86,768 94,854
Billed customers No 233,981 233,981 217,860
Prepaid conversions from
indigencies
No 1,511 1,511 1,355
Households with access to free
basic electricity (lifeline tariff
only)
No 233,981 233,981 230,408
New electrification customers No 11,715 5,800 9,057
Revenue collected as percentage
of total revenue billed:
• Key customers % 100.97 99.50 101.80
• Top customers % 99.08 99.50 99.75
• Domestic customers % 91.30 93.50 93.49
Unaccounted-for electricity as a
percentage of electricity
dispatched (total losses)
Technical losses % 9 9.00 9.00
Non-technical losses % 3.13 3.00 3.63
Outages
• Bulk No
81 104 80
• MV No
1,184 1,000 1,334
• LV No
N/A1
No of public lights working in
targeted high-crime areas2
%
86 90 95
Provision of street lighting to
formal areas
% 60 62 61
Capex on public lighting as % of
public lighting budget
% 100 100 100
Provide street lighting to informal
areas
% 12 24 12
% compliance with NRS 048
(quality of supply)
%
• Category 4 - domestic % 100 100 100
• Category 3 – rural % 100 100 100
• Category 2 - industrial % 93 100 100
Implementation of disaster
management plan by target date
%
100 100 100
1LV power outages used to be measured through number of calls received, a new measure to be implemented by Jan 2008
2High-crime areas include Diepsloot, Ivory Park, Klipfontein Vlei, 50% in Soweto roll-out, Lenasia, Orange Farm, Lawley,
Poortjie, Lakeside, inner-city starting with Ellispark, Bertrams, Yeoville, Jeppestown
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Key performance indicator Unit of measure Actual
2006/2007
Target
2007/2008
Actual
2007/2008
Tasks undertaken to comply with
CoJ environmental management
framework
No
5 5 5
% completion of environmental
management system
%
100 100 95
Employee disabling injury
frequency ratio (DIFR)
Ratio
0.37 1 0.87
Number of employee job-related
fatalities
No
0 0 3
Number of HIV/Aids workplace
programmes in place
No 1 1 1
Employment equity (AA ratio) % 70.18 70 70
Employment equity (gender
equity ratio)
% 23.54 20 24
Job creation as per EPWP policy
• Temporary
• Permanent
No
No
2,455
0
2,455
3,828
Number of public fatalities
No
4 0 4
Annual customer satisfaction
index rating
• Key customers % 77 75.00 78.00
• Top customers % 71.33 75.00 74.00
• Domestic customers % 83.67 84.00 79.00
Total calls answered in 30
seconds as a percentage of total
calls received
%
88.50 91.00 73.00
Number of customer
complaints/queries resolved per
total calls received
%
94.48 95.00 97.00
Average time taken for City
Power to resolve queries referred
to it
Days
3.09 10.00 1.33
Procurement spent on BEE and
SME as % of total budget
procurement
% 73 73 73
Engendered expenditure % 22 22 22
Fault restoration within specified
time as a percentage of total faults
reported (NRS 047)
• Within 1.5 hrs % 24.73 30 26
• Within 3.5 hrs % 63.55 60 66
• Within 7.5 hrs % 91.18 90 93
• Within than 24 hrs % 98.68 98 99
Gross margin % 40.64 37.6 35.7
Opex spent on maintenance
programmes as percentage of
overall opex budget
% 9.42 10.3 14.96
Capex spent on network as
percentage of overall capex
budget
% 95 95 97
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Key performance indicator Unit of measure Actual
2006/2007
Target
2007/2008
Actual
2007/2008
% of municipality entities (ME’s)
capital budget spent
% 100.5 100 100
% variance against ME’s
operating budget
% 5.33 0 (5)
Reconciliation of inter-company
balances with CoJ
% 100 100 100
Reconciliation of intra-company
balances with other MEs
% 100 100 100
Fully SA GAAP compliant
register of assets
% 100 100 100
% attainment of clean audit report
attained by municipality owned
entity (MOE)
% 100 100 100
4.1 Assessment of Critical Areas
The following section is an analysis of critical service delivery areas pertinent to City Power.
4.1.1 ELECTRIFICATION
City Power Johannesburg has electrified over 50 000 previously disadvantaged dwellings over the past five years,
and a further 28 000 electrical connections are being rolled out over two years, in line with the universal access to
electricity by 2012 target. The table below illustrates areas proclaimed recently. This electrification process is
currently under way, and the majority of these projects are at construction stage or near completion.
The 2007/8 electrification programme began with 167 connections completed in quarter one (Q1) and 792
connections completed in Q2. To
date, 9 057 connections have been
completed, which includes 1 387
connections completed in
Alexandra’s normalisation project.
More connections could have been
achieved, however the lack of
houses completed; slow relocation
of beneficiaries to their proper
demarcated stands and availability
of bulk capacity has restricted City
Power to the completed connections
only.
LEHAE HOUSEHOLDS ELECTRIFIED
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The table below illustrates the total connections completed for 2006/7 and 2007/8 financial years.
Project name
Total number
of stands
2006/7
2007/8
Electrification of Far East Bank Ext 7 1 400 690 587
Electrification of Tsepisong West (aka Ebumnandini) 3 000 487 371
Electrification of Lawley Township 7 754 2 020 3 584
Electrification of Pennyville (Zamimpilo) 2 800 100 848
Electrification of Kliptown RDP houses Phase 1 1 221 0 835
Electrification of Clermont (Kathrada) 500 0 483
Lehae Village Phase 1 2 500 1 778 964
Alexandra Normalisation (Phase 4.1) 8 500 6 000 1 385
Leratong Village 500 540 0
TOTAL 28 175 11 615 9 057
To date, 20 672 connections have been completed out of a possible 28 175. The balance will be completed in the
near future as more houses are built, bulk infrastructure is made available and beneficiaries are allocated houses.
4.1.2 POWER OUTAGES
In terms of the two HV outages-related KPIs (ALL and NPR – network performance related), both year-end totals
were well below target limits. In general, network performance has shown a notable improvement.
With regard to the two MV outages-related KPIs, the target for NPR was met; however, in the ALL category, the
year-end total exceeded target. This poor performance can be attributed to the effects of load-shedding, which
placed undue stress on plants and cables, and escalating incidents of theft and vandalism which increased by a
massive 323% over the previous year.
0
50
100
150
200
250
300
CAPEX 34 16 41 119 178 295
Outages 170 160 144 117 104 80
2002/3 2003/4 2004/5 2005/6 2006/7 200708
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4.1.3 PUBLIC LIGHTING
Several targets were achieved with public lighting in high-crime areas. However, only minimal progress was
possible due to limited funding for lighting in informal settlements.
In addition, the escalating theft and vandalism of electrical infrastructure remains a major obstacle to the provision
of public lighting in certain areas and is proving a drain on already-depleted resources.
The public lighting unit continues to explore new technologies to reduce energy consumption and a number of area
replacement projects involving the installation of energy-efficient luminaires have been completed.
The initiative to replace obsolete luminaires with modern equipment is expected to continue in the new financial
year.
4.1.4 DEMAND-SIDE MANAGEMENT
Throughout the year, City Power continued its initiative to install load management systems throughout its areas of
supply. The necessary application documents for submission to Eskom DSM for funding were completed.
In addition, towards year end, 40 000 ripple control relays were purchased for installation in the new financial year.
Good progress has also been made in identifying new technologies to assist in reducing energy demand, including
the use of solar water heaters and energy-efficient installations.
4.1.5 INNER CITY
The Inner City capital programme was developed five to six years ago, and is being reviewed annually to cater for
current and future developments in the inner city. The average age of inner-city network infrastructure ranges
between 40 and 45 years. This network comprises both 6.6 and 11kV at MV level and is impossible to integrate.
Capital investment (in the network at both LV and MV) has thus been made in the following suburbs:
• Kensington
• Judith’s Paarl
• Newtown
• Troyeville
• Mayfair
• Yeoville
• Crown
• Fordsburg
• Jeppestown
• Riviera
These upgrades involved replacing old cables, miniature substations, obsolete switchgear and voltage conversions
from 6.6 to 11kV, aimed at improving the transfer of capacity to allow for additional future developments.
As can be seen from the table below, City Power’s efforts to reduce the average age of inner-city network
infrastructure and to accommodate current and future developments continue. The projects listed below started late
in the 2006/7 financial year, and the majority of projects were completed or near completion at the end of the fourth
quarter of the 2007/8 financial year.
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 27 of 63
Project %
complete
CAPEX
budget
2007/2008
CAPEX actual
spent Explanation notes
Fordsburg 275kV
refurbishment (final phase) 100% 2,536,244 53,632 Project completed
John Ware transformer
replacement 95% 1,026,139 892,601
In progress – C0865. Need
approx R400k to complete
– cable work outstanding
Transformer for Fort
substation 100% 6,639,845 6,519,682 Project completed
Transformer 4 for Central
B substation 100% 3,945,158 102,451 Project completed
Transformer 1B for
Central B substation 100% 1,340,109 190,126 Project completed
Jeppestown 11kV
conversion Phase 2 20% 1,177,215 1,003,594
Scope change – project to
be presented to GMC for
additional funding
Establishment of new MSS
and decommissioning of
MSC Casa Mia
100% 650,000 601,378 Project completed
Decommissioning of Selby
substation 100% 1,727,169 1,727,169
Preliminary designs – only
engineering fees paid
C1119
Reduction in unplanned
outages 100% 1,045,817 1,045,816
Only preliminary
engineering fees paid –
C1125
Fordsburg network
upgrade 99% 876,000 758,308
In progress – due for
completion end July 2008
The remaining work on
projects, such as John Ware
transformer replacement
and Fordsburg MV network
upgrade, will be carried
over to the first quarter of
the new financial year
2008/2009 for completion
by July and August 2008
respectively.
Fordsburg
City Power Annual Report 2007/08
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4.1.6 UNACCOUNTED-FOR ELECTRICITY
This KPI shows the quantum of losses incurred in distributing electricity. In the year under review, the target was
12.0%, while the average distribution loss recorded was 12.4%, 0.4% above target.
4.1.7 PROCUREMENT SPENT ON BEE AND SME AS PERCENTAGE OF TOTAL BUDGET
The target set for this KPI is 70%. City Power has consistently exceeded this target. For this financial year an, actual
expenditure of 73% was achieved, translating to R1 363 077 928 spent on BEE companies. To ensure continued
compliance to this KPI, City Power will continue to engage with large, predominantly white-owned companies, to
encourage them to acquire BEE stakes in their shareholding. The award of new contracts is now geared at
promoting BEE-compliant companies with acceptable or high BEE elements.
4.1.8 ENGENDERED EXPENDITURE
The target for the year is 22%. The year end actual performance is 22% which translates to R300 537 777. There are
initiatives in place to ensure we improve on this target. Also, the three-quote procurement process is now geared to
focus more on engendered companies.
4.1.9 2010 PROJECTS
The table below summarises high-level progress on all City Power 2010-related projects for bulk, medium voltage
and public lighting infrastructure. In short, the 2010 infrastructure projects are on track for completion before the
Confederations Cup. However, the two intake points are still at risk due to lack of funding.
Type of
project
Project description Project status Year-to-date
expenditure
(m)
Comments/progress/problems
experienced
Bulk
infrastructure
Establishment of
132/11kV Crown
substation
Tender
awarded – site
established
R12.9 Tender awarded to Powertech IST
– payment of two transformers
delivered in July 2008
Bulk
infrastructure
Siemert Road S/S –
install third transformer,
reconfigure 88kV busbar
plus install 17-panel
board 11kV switchgear
Bid evaluation
committee
recommendation
awaits Exco
approval
R0 Budget provision R30 million in
2008/2009
Bulk
infrastructure
Transmission: Orlando
switching station -
replace all 88kV
switchgear with compact
gas-insulated switchgear
and introduce 275/88kV
Quattro MTS
Design phase R0 No budget provision. City Power
submitted application for funding
to the city.
Bulk
infrastructure
Transmission: Kelvin -
build new 275/88kV
yard at Sebenza
Design phase R0 City Power designs in final
stages. Eskom designs in final
stages. No budget provision –
City Power submitted application
for funding to the city. City
Power budget quote requests for 2
x 275kV line bays at Prospect
made to Eskom.
EIA applications still under way.
City Power Annual Report 2007/08
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Type of
project
Project description Project status Year to date
expenditure
(mil)
Comments/progress/problems
experienced
Training
venues
Cecil Payne, Ruimsig,
Rand Stadium
Not started R0 Minor upgrades within stadiums.
Budget provision allowed in
2009/2010 with expected
completion date of December
2009
Ellis Park
projects
MV network upgrade -
Ellis Park precinct
92% R28
previous years
Completion of MV infrastructure
awaited for completion of Beit
Street upgrade
Public lighting 92% R3.92
current year
New street lights around precinct
installed. All new street poles
installed in Siemert Road,
Silwerwright, Saratoga and at
Transport Square. Funding for
MV and public lighting is from
the same project. Four high masts
installed in Joe Slovo bridge
Beit Street lighting to carried out
once road has been upgraded –
roadworks under way
Nasrec 11kV
300mm^2 3C
XLPE cable
MV network
development
40% R0 Servitudes approval/access to site.
In progress: 100% of cable
servitude has been obtained.
Soccer City 11kV cable works
will begin soon
TOTAL R16,820m
Standby generators DME has confirmed the following status on sourcing standby generators:
No: Task description/activity Status
1 DME: Expression of interest tender issued and closed � 2 DME: Adjudication process completed and recommendations submitted to
LOC (only FIFA-accredited suppliers) �
3 LOC: Accept recommendation by DME and request funding from National
Treasury
4 National Treasury: Approval of funding and allocation to host cities
5 DME: Allocation of service providers to host cities December 08
6 Host cities: Installation and commissioning of generators by service providers
7 DME, LOC, host cities: Facilitation of cost-recovery agreement between host
cities and National Treasury
City Power Annual Report 2007/08
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4.2 Financial Performance
City Power committed to achieving the following areas of excellence (KPIs) in the 2007/08 financial year.
4.2.1 Gross Margin Gross margin is below budget. The gross margin KPI has not been achieved due to the increase in cost of
sales, which in turn was influenced by the high coal price for primary energy in Kelvin during the period
under review.
4.2.2 Percentage Maintenance Budget Spent
This KPI ensures appropriate focus is given to maintaining the network.
The amount spent as a percentage of operating expenditure is 14.96% above budget. Factors that
contributed to this are load-shedding, cable theft, network tampering and vandalism.
4.2.3 Percentage Network Budget Spent This KPI ensures capital budgets are allocated to the network and the provision of services rather than non
value-adding activities.
The target for the year of 96% was exceeded with 100% achieved.
4.2.4 Percentage Capital Budget Spent This KPI ensures the total capital budget is spent by the entity. Failure to do so historically collates with
poor service delivery.
100% of the capital budget for the year has been spent.
4.2.5 Percentage spent against Operating Budget The year-to-date total operating expenditure is 5.7% more than budget. The main contributing factors to
over-expenditure are repairs and maintenance, meter-reading cost, security cost, cut-off fees, meter audits
and illegal connections.
4.2.6 Reconciliation of Inter-company balances with the CoJ
This KPI contributes to the successful completion of the audit, ensuring no late adjustments as a result of
late processing of inter-company transactions.
Reconciliation of inter-company balances ties back with other MOEs.
4.2.7 Fully SA GAAP-compliant register of assets The process to update the asset register is ongoing. City Power’s asset register is fully compliant to SA
GAAP which contributed to City Power obtaining an unqualified audit report for the review period.
4.2.8 Percentage attainment of clean audit report by entity The entity has attained a clean audit report for the year.
City Power Annual Report 2007/08
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4.3. Assessment of other IDP Criteria
4.3.1 Number of households/dwelling units with access to basic levels of electricity (excluding Eskom-
supplied areas)
This indicator shows the number of free basic electricity (FBE) beneficiaries within City Power-supplied areas in
line with CoJ-approved qualification criteria. Total for this financial year is 230 408 customers.
4.3.2 Revenue collected as a percentage of total revenue billed
Total billing Total collection % collection
Key customers
(805,082,826.50) 819,904,758.37 101.8%
Top customers
(2,649,091,338.20) 2,642,368,385.78 99.7%
Domestic
customers
(1,495,192,278.97) 1,397,838,903.41 93.5%
4.3.3 Percentage compliance with NRS048 (quality of supply)
NRS048 is a regulatory standard used for monitoring quality of supply in the South African electricity industry.
This standard acknowledges that quality of supply requirements differ between customer categories and per network
type, eg customers supplied by dense underground networks often enjoy a better quality of supply compared to
counterparts supplied by long rural feeders. Similarly, quality of supply requirements for industrial customers are
more stringent than domestic customers.
Currently there are about 106 sites that are monitored continuously, and they have all met the limits specified by the
regulator, implying that City Power is compliant and has exceeded all set targets.
4.3.4 Implementation of disaster management plan
• Introduction of disaster steering committee
• CoJ risk service presented a business continuity plan
• Risk control personnel trained on disaster information software
• Commissioning of disaster management information software at Roodepoort and Reuven control room
• Communication of DRM strategy to CP employees with public relations
• Communications department
4.3.5 Number of tasks undertaken to comply with CoJ environmental management framework
• Reviewed integrated SHER policy and approved by MD
• Conducted EIA processes for projects
• Established HIRA committee
• Developed waste management strategy
• Developed site-specific impact and aspect register
• Energy efficiency strategy (2nd floor energy efficiency lighting pilot project, Reuven solar panels installed
and Zandspruit solar lights installed )
4.3.6 Number of employee disabling injury frequency ratio
The year-end figure of 0.87 was better than the internationally accepted standard of 1.0. This excellent performance
reflects City Power’s commitment to maintaining employee safety standards and safety awareness programmes.
4.3.7 Number of employee job-related fatalities
During the period, three employee fatalities were recorded. Each incident was thoroughly investigated and
recommendations/measures introduced to prevent similar accidents.
City Power Annual Report 2007/08
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4.3.8 Number of HIV/Aids workplace programmes in place
The HIV/Aids workplace programmes include:
• Continuous assessment of risks posed by HIV/Aids on the business
• Limiting the number of new infections among employees through planned interventions of ongoing
education and information
• Ensuring employees living with HIV/Aids are aware of their rights and that their rights are respected and
protected
• Providing case management and support to employees living with HIV/Aids.
4.3.9 Employment equity (AA ratio)
• With a target of 70% for affirmative action for the 2007/08 financial year, the company achieved a 69.41%.
• This compares very favourably with the 70.18% achieved in the previous financial year.
4.3.10 Employment equity (gender ratio)
• The company’s target was 20% for the 2007/08 financial year.
• The actual ratio of 23.72% is slightly better than the 23.54% achieved in the prior period.
4.3.11 Job creation as per EPWP policy
City Power has a target to create 2 455 jobs in line with the extended public works programme. Over the last 12
months, 3 828 temporary jobs were created, exceeding the annual target.
4.3.12 Number of public fatalities
During the period, four public fatalities were recorded. In most instances, these can be attributed to illegal entry into
live electrical enclosures or unauthorised tampering with electrical equipment.
4.3.13 Annual customer satisfaction rating
City Power’s independent surveys in 2007 both showed meaningful improvement on the prior year:
June 07 October 07
Key customers - 77.00% vs 78.00%
Large Power Users - 71.33% vs 73.67%
Domestic customers - 83.67% vs 78.67%
Results from the survey conducted from February to April 2008 were less positive due to intense load-shedding at
that time.
4.3.14 Total calls answered in 30 seconds as a percentage of calls received
The target for this KPI is 91% throughout the year. Large call volumes in May and June (over 15 000 above call
centre capacity) as a result of outages due to cold spells and load-shedding put pressure on this KPI. The average
annual performance was 73%.
4.3.15 Number of customer complaints closed versus total complaints received
This KPI shows the percentage of customer complaints resolved. The annual performance is 97.00% compared to a
target of 95%.
4.3.16 Average time taken for City Power to resolve queries referred to it
This is a standard regulatory (NRS 047) KPI showing how long it takes on average for queries to be resolved. The
internal target set for resolving queries is an average of 10 days compared to the baseline of 14 days as per NRS
047. This KPI has been amended and is now based on the Pega system which has information on queries and
complaints for the following categories only: billing, meter reading, public lighting, new connections (requests for
quotations), payment options and advisory services.
The annual query/complaints average resolution time was 1.33days, compared to the annual target of 10 days.
City Power Annual Report 2007/08
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4.3.17 Faults restoration in a specified time as a percentage of total faults reported (NRS047): within
1.5 hours; 3.5 hours; 7.5 hours and 24 hours
City Power complied in three of the four categories, but failed to meet target in the 1.5 hour category. A notable
improvement is expected in this category in coming months with the implementation of the new mobile data
communication system between the dispatch centre and field resources, as well as the ongoing network customer
data clean-up.
4.3.18 Percentage turnaround time on development applications submitted to utilities (60% in 30 days and
40% in 60 days)
This KPI aims to ensure that comments on developments are done speedily and efficiently. Currently all
submissions received have been responded to as per target. All pending applications require additional information
from applicants and are, as a result, beyond City Power’s control.
Section 5: Assessment of arrears on municipal taxes and service charges
5.1 Assessment of municipal taxes and service charges owed to City Power
Unit <30 days <60 days <90 days <120 days >121 days Total
City Power R 110 100 4 633 21 395 14 549 142 858 293 535
CoJ R 145 107 70 523 43 823 35 731 1 058 573 1 353 757
R 255 207 75 156 65 218 50 280 1 201 431 1 647 292
5.2 Assessment owed by City Power for service charges
City Power owes the following for service charges:
Entity Total
Johannesburg Roads Agency (reinstatement costs) 5 632 324
City of Johannesburg (rates and services) 5 130 849
Johannesburg Water (water) 76 424
City Parks (tree pruning) 3 509 867
Pikitup (waste removal) 32 951
Total 14 382 415
5.3. Assessment of directors’ and senior managers’ municipal accounts
Name Designation Municipality Municipal account
name/number
Account status
K Simelane Chairperson Johannesburg K Simelane
401900792
Current
J Kumbirai Non-executive Tshwane J Kumbirai
2071470635
Current
T Marwala Non-executive Johannesburg T Marwala
7130523696
Current
K Garlipp Non-executive Tshwane K Garlipp
3302075561
Current
G Badela Non-executive Johannesburg G Badela
302212072
30 days
H Mateya Non-executive Ekurhuleni H Mateya
Renting
Current
S Zimu Managing
director
Johannesburg S Zimu
3000041614
Current
B Leshnick Director finance Johannesburg B Leshnick
202089509
Current
V Padayachee Director Johannesburg V Padayachee Current
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 34 of 63
Name Designation Municipality Municipal account
name/number
Account status
operations 201239060
S Xulu Director
engineering
service
Johannesburg S Xulu
Brookfield Manor
Current
L Mashao Director
corporate
services
Johannesburg L Mashao
900887297
90 days
N Nsele Director -
customer services
(acting)
Johannesburg N Nsele
205886943
Current
S Masolo GM public
relations
Ekurhuleni S Masolo
Morrison Estates
Current
M Mojapelo GM internal audit Johannesburg M Mojapelo
Letting com
Current
A Lishivha GM legal
services
Johannesburg K Molewa
206521871
Current
M Sibuta GM public
lighting
Johannesburg Andrew Lucas
Real Estate
60 days
L Mbewu
GM continuous
improvement
Emfuleni N Mbewu
11114249
Current
C Solomon
GM risk services Tshwane C Solomon
3318468766
Current
M Smith Company
secretary
Johannesburg M Smith
300949880
Current
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 35 of 63
Section 6: Statement on amounts owed by Government Departments and Public Entities
Government accounts as at 30 June 2008
Schools
Acc no SCHOOLS Total Status Comments
220083813 East Bank High School 13,096.30 current
220082200 Bryanston Primary School 0.00
220065035 Athlone Boys High School 0.00
220077094 Laerskool Louw Geldenhuys 469.89 current
220025018 Preprimere Skool Die Mossie 13,153.38 current
220028700 Philip Kushlick School 0.00
220055421 Southview Secondary School 66,428.83 overdue Erratic payer
220075925 Western High School 0.00 current
220047406 Ennerdale Secondary School 2,240.17 current
220055608 Azara Secondary School 22,761.17 overdue Erratic payer
220058969 Penta-Rosa Primary School 29,270.17 overdue Erratic payer
220057299 Greyville Primary School 25,313.39 overdue Erratic payer
220057186 Lenasia Secondary School 0.00
220100709 Riverlea Laerskool 289,805.15 current Meter duplications
220091356 Kensington Secondary School 7,187.50
220057179 Alpha Primary School 19,698.48 overdue Erratic payer
220055453 Parkside Primary School 14,890.89 overdue Erratic payer
220059000 Topaas Secondary School 20,649.22 current Erratic payer
220025000 Hoerskool Die Fakkel 5,875.11 current
220057193 Model Primary School 10,316.90 current
220059095 JHB Abdm School 0.00
220096040 Winchester Ridge Pre-Primary School 0.00 current
220052276 St Marys School For Girls 0.00
220061143 Missourilaan Sekondere Skool 17,381.90
220079207 Northcliff High School 0.00
220075770 Laerskool Jan Celliers 0.00
220048142 Fairways Primary School 0.00
220004272 Hyde Park High School 24,839.04 current
220052036 Sandringham High School 0.00 current
220061150 Nancefield Laerskool 5,759.30 current
220082217 Laerskool Bryanston 0.00
220069777 Queens High School Hostel 0.00
220077369 Fordsburg Primary School 0.00
220078933 Hope School 0.00
220058951 Harmony Primary School 14,156.51 overdue Erratic payer
220025995 Mondeor High School 0.00
220067963 Athlone Girls High School 0.00
220078958 Ridge School 0.00
220025106 Frances Vorwergskool 0.00
220001063 Craighall Primary School 0.00
220079430 Delta Park Skool 0.00
220082440 Bryandale Primary School 0.00
220049918 Pridwin School 12,083.35 current
220082070 Michael Mount Waldorf School 0.00
220078651 Hoerskool Vorentoe 0.00
220069696 Parkview Senior School 0.00
220030850 Hoerskool Florida 0.00
City Power Annual Report 2007/08
Updated: 12/09/2014 14:27:40 Page 36 of 63
Government accounts as at 30 June 2008
Schools
Acc no SCHOOLS Total Status Comments
220092166 Jeppe High Prep School 0.00
220070518 Auckland Park Preparatory School 0.00
220022360 Florida Park High School 0.00
220078387 Parkview Junior School 0.00
220037060 Randpark Primary School 0.00
220065596 Cyrildene Primary School 0.00
220027992 Harvest Christian School 0.00
220092208 Hillcrest Primary School 597.17 current
220070934 Blairgowrie Primary School 0.00
220025963 Mondeor Primary School 0.00
220078041 Northcliff Primary School 0.00
220072547 Emmarentia Primary School 0.00
220078676 Gen Christiaan De Wet Skool 0.00
220000253 Bramley Primary School 0.00
220077930 Esperanza Laerskool 0.00
220055929 Lenasia Muslim School 11,717.08 current
220088699 Fairview Junior School 6,765.09 current
220026942 Glenanda Primary School 0.00
220052283 St Mary's School For Girls 0.00
220061030 Silver-Oaks Sekondere Skool 14,010.69 overdue Erratic payer
220024991 Forest High School 499,501.10 overdue Query on adjustment
220057203 Park Primary School 14,930.57 current
220028562 Laerskool Danie Theron 0.00
220052318 Northview High School 11,568.42 overdue
220066991 Jeppe High School Roanhouse 0.00 current
220024751 Hoerskool President 1,124.10 current
220067586 Jeppe Boys High School 0.00 current
220024945 Sir John Adamson High School 0.00 current
220025882 Meredale Primary School 8,397.01
220091437 Jeppe High School For Girls 346.68
220044074 Robertsham Primary School 3,750.33 current
TOTAL 1,188,084.89
City Power Annual Report 2007/08
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South African Police Services
Acc no POLICE Total Status Comment
220093804 SAP Wynberg 0.00
220078806 SAP Radio Station 8,919.91 current
220028957 S A Police Station Honeydew 0.00
220052068 SAP Station Norwood 6,094.12 current
220057274 SAP Lenasia 0.00
220033682 SAP Station Booysens 0.00
220028435 SAP Motor Werkwinkel 0.00
220072040 SAP Brixton [Moord / Roof Afd] 0.00
220069512 Jeppe Police Station 0.00
220056954 Hospital Hill Police Station 0.00
220002412 Bramley Police Station 0.00
220059151 SAP Dodehuis En Kwartiere Pwd 14,014.17 current
220062250 Cleveland Police Station 0.00
220062242 SAP Cleveland P W D 9,443.06 current
220093794 Alexandria Police Station 0.00
220062732 Police & Civil Rights Union 0.00
220057080 SAP Sam Hancock Str (Pwd) 1,259.47 current
220056993 SAP Sam Hancock Str 619.88 current
220057059 SAP Sam Hancock 256.51 current
220057010 SAP Sam Hancock 591.91 current
220057066 SAP Sam Hancock Str (Pwd) 0.00
220057027 SAP Sam Hancock 931.88 current
220057041 SAP Sam Hancock 209.74 current
220933683 SAP Station Booysens 840.88 current
220080386 SAP Flats 84,375.06 current
TOTAL 127,556.59
Courts
Acc no COURTS Total Status Comments
220062002 Law Courts Lenasia 0.00 current
220061954 Kliptown Regional Court Pwd 0.00 current
TOTAL 0.00
Public Works
Acc no PUBLIC WORKS Total Status Comments
220035859 RSA Public Works & Land 0.00
220018973 DIE Senior Streekbestuurder_Mrood01 748.56 current
220052075 SAP Flats 100,717.85 current
220081414 R S A P A Afdelingsingeneur 0.00
220058479 Myntering Buro Pwd 23,343.42 current
220022970 Die Streeksverteenwoordiger 0.00
220008816 Die Hoofdirekteur 0.00
220078845 R S A Openbarewerke & Grondsake 0.00
220092430 7th Div Headquarters Pwd 74.08
220042510 R S A Public Works 0.00
220035859 R S A Public Works & Land 0.00 current
220028428 Ptn Mortuary For Coloureds Pwd 0.00
220058550 Pneumoconiosis Research Pwd 22,442.94 current
220058542 Old Medical Building Pwd 158.93
220016920 Openbare Werke En Grondsake 324,622.42 overdue query billing
City Power Annual Report 2007/08
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Public Works
Acc no PUBLIC WORKS Total Status Comments
220042510 R S A Public Works 0.00
TOTAL 472,108.20
Hospitals
Acc no HOSPITALS Total Status Comments
220068999 Johannesburg Hospital 1,452,806.75 current
220028474 Baragwanath Hospital 1,448,801.74 current
220078757 JG Strydom Hospital 477,619.47 current
220091003 Jhb Hospital 44,947.17 current
220017137 South Rand Hospital 77,827.04 current
220028001 Mulbarton Hospital Limited 0.00
221038725 Edenvale Hospital 181,027.51 current
220030804 Discovery Hospital 35,067.12 current
220090433 Csf Emseni Hospital 39,531.92 current
220068100 Jhb Hospital 15,214.21 overdue
220989742 Barclays Hospital 31,403.19 overdue
220055414 Lenasia Hospital 16,734.07 current
220089741 Barclays Hospital 0.00
220078644 JG Strydom Hospital 1.18 current
220971939 Coronation Hospital 190,848.11 current
TOTAL 4,011,829.48
Clinics
Acc no CLINICS Total Status Comments
220094124 Alexander Clinic 22,471.08 current
220077513 Garden City Clinic 213,227.60 current
220082055 Medi-Clinic Ltd 0.00
220083154 Medi-Clinic Limited 84,994.41 current
221036090 Alexandra Womens Clinic 16,601.58 overdue Erratic payer
220071952 Rand Clinic 100,517.62 current
220091010 Rand Clinic 51,992.64 current
221036083 Eastbank Clinic 40,728.66 overdue Erratic payer
220004667 Shifa Clinic 0.00
220014136 Mayo Clinic 0.00
220055372 Lenmed Clinic Ltd 0.00 current
220052340 John Forthering Clinic 1,567.74 current
TOTAL 532,101.33
Hostels
Acc no HOSTEL Total Status Comments
220006400 City Deep Compound 9,958.83 current
220047332 SMLC Urban Dev Hostels (645) 94,887.65 current
221115063 Nobhuhle Men’s Hostel 48,027.45 current
221115056 Madala Men’s Hostel 63,028.54
221108267 Helen Joseph Women’s Hostel 73,476.52 current
220062860 Selby Hostel 161,595.20 overdue Erratic
221087289 George Goch Men’s Hostel 0.00
220001345 Gresswold Spec Hostel 0.00
TOTAL 450,974.19
City Power Annual Report 2007/08
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Housing
Acc no HOUSING Total Status Comments
220100547 Troyeville Housing Co-Operative Ltd 165,231.79 overdue Erratic payer
220087134 Health & Housing: Housing 245 239,250.58 overdue Awaiting adjustment
220946570 Johannesburg Housing Co Ltd 0.00
220046804 Cope Tswelopele Housing Cooperative 44,805.57 current
220080530 Dept Housing and Local Govt 43,085.20 overdue Erratic payer
221051081 Johannesburg Housing Company (Carr) 505,504.64 overdue Disputing debit raised
220061009 Dept Housing and Local Govt 206,567.33 current
220990723 Simunye Housing Association 0.00 current
220100882 Johannesburg Housing Company 0.00
220044660 Dept Housing and Local Govt 18,376.34 current
220044726 Dept Housing and Local Govt 16,515.90 overdue Erratic Payer
220003543 Sa Legion Soldiers Housing Org 6,914.43 current
220044740 Dept Housing and Local Govt 20,338.19 current
220044765 Dept Housing and Local Govt 5,606.10 current
220044733 Dept Housing and Local Govt 18,490.00 overdue Erratic payer
220044719 Dept Housing and Local Govt 22,211.42 overdue Erratic payer
220080523 Dept Housing and Local Govt 8,556.97 overdue Erratic payer
220014633 New Housing Company 0.00
220089639 Health & Housing: Comm Hlth 230 42,094.13 overdue Erratic payer
220046441 Dept Housing and Local Govt 16,756.93 overdue Erratic payer
221064041 Jhb Housing Company Ltd 0.00
220046427 Dept Housing and Local Govt 16,097.15 current
220046434 Dept Housing and Local Govt 12,853.32 overdue Erratic payer
220044758 Dept Housing and Local Govt 13,989.70 overdue Erratic payer
220046498 Dept Housing and Local Govt 12,572.30 overdue Erratic payer
220044684 Dept Housing and Local Govt 0.00
220089607 Everest court housing ass 9,332.96 current
220044677 Dept Housing and Local Govt 26,257.17 overdue Erratic payer
220046508 Dept Housing and Local Govt 15,914.22 overdue Erratic payer
220046466 Dept Housing and Local Govt 15,039.57 overdue Erratic payer
220003529 Soldiers Housing ORG SA 1,405.21 current
220046522 Dept Housing and Local Govt 12,800.43 overdue Erratic payer
220046530 Dept Housing and Local Govt 12,549.57 overdue Erratic payer
220046515 Dept Housing and Local Govt 11,371.38 current
220046473 Dept Housing and Local Govt 13,479.90 overdue Erratic payer
220046480 Dept Housing and Local Govt 3,343.55 overdue Erratic payer
220016038 Johannesburg Housing Company 0.00
220067113 Johannesburg Housing Company 54,378.24 current
220046459 Dept Housing and Local Govt 13,778.25 overdue Erratic payer
220046554 Dept Housing and Local Govt 0.00
TOTAL 1,656,171.58
Correctional Services
Acc no CORRECTIONAL SERVICES Total Status Comments
220091388 SA Defence 0.00
220028442 Diepkloof Prison P W D 0.00
TOTAL 0.00
Grand TOTAL 8,438,826.26
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Section 7: Recommendation and Plans for Next Financial Year
The approved budget for the 2008/9 financial year is shown below: INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT ActualActualActualActual BudgetBudgetBudgetBudgetR000R000R000R000 2007-20082007-20082007-20082007-2008 2008-20092008-20092008-20092008-2009Total IncomeTotal IncomeTotal IncomeTotal Income 4,291,012 6,011,917 TurnoverTurnoverTurnoverTurnover 4,199,985 5,620,324Other IncomeOther IncomeOther IncomeOther Income 91,027 391,593Cost of salesCost of salesCost of salesCost of sales (2,795,652) (3,890,654)Gross profit marginGross profit marginGross profit marginGross profit margin 1,495,360 2,121,263Gross profit %Gross profit %Gross profit %Gross profit % 34.8%34.8%34.8%34.8% 35.3%35.3%35.3%35.3%Operating overheadsOperating overheadsOperating overheadsOperating overheads (1,315,797) (1,627,682)Operating profit before interest and taxationOperating profit before interest and taxationOperating profit before interest and taxationOperating profit before interest and taxation 179,563 493,581Operating Profit %Operating Profit %Operating Profit %Operating Profit % 5.66% 8.21%InterestInterestInterestInterest (228,071) (283,700)Profit/loss before taxationProfit/loss before taxationProfit/loss before taxationProfit/loss before taxation (48,508) 209,881TaxationTaxationTaxationTaxation (58,767)Retained profit/(loss) for the period Retained profit/(loss) for the period Retained profit/(loss) for the period Retained profit/(loss) for the period (48,508) 151,114
7.1 Key Focus Areas for the 2008/09 Financial Year
1 Work closely with CoJ treasury to secure additional funding to address:
• Capital backlog on network refurbishment
• Investment in additional capacity
• 2010 requirements
• Reduction in outages
• Expansion of public lighting network
• Electrification of previously disadvantaged areas
2 Improvement in call response times
3 Improve domestic collection levels in conjunction with CoJ revenue management unit
4 Continue to convert high-consumption customers to automated meters
5 Convert customers to prepaid meters
6 Improve short-term restoration time
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Chapter 3: Directors’ Report and Governance
Section 1: Corporate Governance Statement
The board of directors and executives are committed to the principles of openness, integrity and accountability
advocated by the second King report for corporate governance in South Africa (King II). Through this process, the
shareholder and other stakeholders derive assurance that the company is ethically managed according to prudent
risk parameters and in compliance with generally accepted corporate practices. Monitoring the company’s
compliance with King II forms part of the mandate of the audit committee. The company has complied with the
code in all material respects during the year under review.
The directors have adopted a board charter, which includes matters of ethics, procedure and conduct of committee
members. The charter is aligned with the CoJ charter. Registers are kept and updated on the disclosure and
declaration of interests of directors and senior management. The board and senior management ensure there is full
material compliance to all relevant legislation. The company secretary has certified in terms of section 268(d) of the
Companies Act that all statutory returns have been submitted to the Registrar of Companies.
The board of directors ascribes to the City of Johannesburg’s corporate governance protocol (the protocol), which,
inter alia, regulates its relationship with the city as its sole shareholder and parent municipality in the interests of
good corporate governance and good ethics. The protocol is premised on the principles enunciated in King II.
City Power’s practices are, in most material instances, in line with the principles set out in King II. Ongoing steps
are taken to align practices with this report’s recommendations and the board continually reviews progress to ensure
the company improves on corporate governance. During the year under review, the company entrenched its risk
management reviews, and reporting and compliance assessments were conducted in terms of the Companies Act
and the Municipal Finance Management Act (MFMA). Annual board assessments and evaluations are conducted
and an annual report for the previous year was efficiently completed in accordance with the prescripts of section
121 of the MFMA. The current annual report was guided by the same principles.
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Section 2: Board of Directors
City Power has a unitary board, which consists of executive and non-executive directors. The board is chaired by a
non-executive director, Ms Getty Simelane. The board meets regularly, at least quarterly, and retains full control
over the company. The board remains accountable to the City of Johannesburg Metropolitan Municipality (the
company’s sole shareholder) and its stakeholders, the citizens of Johannesburg. A service delivery agreement
(SDA), concluded in accordance with the provisions of the Municipal Systems Act (MSA), governs the company’s
relationship with the City of Johannesburg.
City Power has concluded a compact with its parent municipality for the year under review. The compact comprises
annual performance objectives, measures, targets and indicators. The board provides monthly, quarterly, biannual
and annual reports to its parent municipality on performance against these measures and service delivery as
prescribed in the SDA, MFMA and MSA. These reports are submitted within the stipulated timeframes.
Non-executive directors contribute an independent view to matters under consideration and add to the depth of
experience of the board. The roles of chairperson and managing director of the company are separated, with
responsibilities divided between them. The chairperson has no executive functions. Members of the board have
unlimited access to the company secretary, who acts as an advisor to the board and its committees on matters
including compliance with company rules and procedures, statutory regulations and best corporate practices.
The board, or any of its members, may, in appropriate circumstances and at the expense of the company, obtain the
advice of independent professionals. A director and peer review as well as a board evaluation are undertaken
annually.
The articles of association provide that the directors of the company will be elected by the shareholder and
appointed by the board of directors. The managing director is appointed by the board.
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For the year under review, the board consisted of eight non-executive directors: Ms G Simelane, Ms J Kumbirai,
Prof T Marwala, Adv KDCO Garlipp, Mr G Badela and Mr T Mahlatsi and two executive directors, Mr SM Zimu,
managing director, and Mr BN Leshnick, director finance. Executive directors are regarded as contract employees
in terms of the company’s conditions of service.
Mr Leshnick resigned as an executive director on 30 June 2008. Mr T Mahlatsi resigned from the board on 31 July
2007.
Attendance at meetings held during the year under review was as follows:
Directors Board Board
workshops
(induction)
Audit HR &
remuneration Board
oversight
Pricing &
regulatory
Ad hoc
EDI
working
group
No of meetings
held 4 3 8 8 4 4 1
G Simelane 4 3 - 8 4 - 1
T Marwala 3 3 - - 4 4 1
J Kumbirai 4 2 8 7 - - -
K Garlipp 3 3 8 - - 4 1
H Mateya 4 3 - 7 - 4 -
G Badela 4 3 - 8 4 - -
S Zimu 2 3 4 4 3 3 1
B Leshnick 4 3 7 - 2 1 1
Independent
audit committee
members:
D Dondur - - 8 - - - -
H Moolla - - 8 - - - -
Dates of
meetings:
1 Jul 07 – 30 Jun
08
27 Sep 07
29 Nov 07
30 Jan 08
29 Apr 08
27 Jul 07
28 Jul 07
12 Oct 07
20 Jul 07
29 Aug 07
16 Oct 07
25 Oct 07
23 Nov 07
14 Feb 08
8 Apr 08
30 May 08
20 Sep 07
25 Oct 07
17 Jan 08
23 Jan 08
12 Feb 08
18 Mar 08
8 Apr 08
21 Apr 08
16 Aug 07
8 Nov 07
10 Mar 08
3 Jun 08
16 Aug
8 Nov
10 Mar 08
3 Jun 08
19 Feb 08
Section 3: Board Committees
The board has the following committees to assist in carrying out its responsibilities. Each of the committees
is chaired by a non-executive director.
• Audit committee
• Human resources and remuneration committee
• Pricing and regulatory committee
• Oversight committee
• Ad hoc EDI working group
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3.1 Audit Committee
The audit committee comprises the following non-executive directors: Ms J Kumbirai and Adv K Garlipp and
two independent members, Ms D Dondur and Mr H Moolla.
The role of the committee is to assist the board by performing an objective and independent review of the
functioning of the company’s finance and accounting control mechanisms. It exercises its functions through
close liaison and communication with senior management and the internal and external auditors. The committee
met six times during the year under review.
The audit committee operates in accordance with a written charter authorised by the board, and provides
assistance to the board on:
• Ensuring compliance with applicable legislation and the requirements of regulatory authorities
• Matters relating to financial accounting, accounting policies, reporting and disclosures
• Internal and external audit policy
• Activities, scope, adequacy and effectiveness of the internal audit function and audit plans
• Reviewing and recommending the approval of external audit plans, findings, reports and fees
• Compliance with the Code of Corporate Practices and Conduct
• Compliance with the code of ethics.
The audit committee adequately addressed its responsibilities in terms of the charter during the review period.
The committee met eight times.
3.2 Human Resources and Remuneration Committee
The human resources and remuneration committee consists of the following non-executive directors: Ms G
Simelane, Ms J Kumbirai, Mr H Mateya and Mr G Badela, and one executive director, Mr S Zimu.
The committee advises the board on remuneration policies, remuneration packages and other terms of
employment for all directors and senior management. Its specific terms of reference also include
recommendations to the board on matters relating to general staff remuneration policy, profit bonuses, executive
remuneration, director remuneration and fees and service contracts. The committee met eight times during the
year under review.
3.2 Pricing and Regulatory Committee
The pricing and regulatory committee comprises the following non-executive directors: Adv K Garlipp, Prof T
Marwala and Mr H Mateya, and two executive directors, Mr S Zimu and Mr B Leshnick.
The committee advises the board on strategic direction on electricity pricing strategies and policies, addresses
regulatory changes in the electricity supply industry that affect the company, ensures the company complies
with regulatory requirements on tariffs, recommends structural tariff changes to the National Electricity
Regulator, and ensures compliance with NRS 047 (quality of service) and NRS 048 (quality of supply)
regulations. The committee met four times during the year under review.
3.3 Board Oversight Committee
The oversight committee consists of the following non-executive directors: Prof T Marwala, Ms G Simelane
and Mr G Badela, and one executive director, Mr S Zimu.
The committee advises the board on oversight responsibilities set out in the supply chain management policy
and procedures which are in line with Municipal Finance Management Act regulations on supply chain
management.
• The committee operates in accordance with a mandate authorised by the board, and assists the board in
maintaining oversight over the implementation of supply chain management policies as contained in
the supply chain management manual
• Monitoring and reporting on implementation of the supply chain management policy and procedures
and the performance of supply chain management
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• Assessing deviations and exceptions from policy and procedures
• Advising on the multi-year business plan and annual budget plan
• Monitoring and reporting on company spend against the approved budget and business plan
• Assessing the achievements of outputs on projects.
The oversight committee is informed of all emergency procurement and considers:
• Approving any spending planned outside approved plans
• Proactive approval of deviations/amendments from policy.
The committee met four times during the year under review.
3.4 Ad Hoc EDI Working Group
The ad hoc EDI working group is a joint executive and board working group formed to consider and advise the
company on EDI restructuring developments and to prepare City Power for transition into a RED.
The working group comprises the following non-executive directors: Ms G Simelane, Adv K Garlipp and Prof
T Marwala, and two executive directors, Mr S Zimu and Mr B Leshnick. Mr V Padayachee, a member of the
executive committee, is also a member of the working group.
The committee met once during the year under review.
Section 4: Directors’ Remuneration
Directors’ fees
Salary Other
allowances Director fees
Performance
bonus Travel Total
Directors R000's
G BADELA 133 5 138
Adv K D C GARLIPP 158 9 167
S J KUMBIRAI 263 12 275
TP MAHLATSI 3 3
Prof T MARWALA 125 2 127
JJH MATEYA 149 7 156
KPM SIMELANE 339 5 344
SM ZIMU 1619 35 203 128 1985
BN LESHNICK 1004 26 181 128 1339
Independent Audit Committee Members
DLT DONDUR 73 2 75
H MOOLLA 76 1 77
Total 2623 61 1319 384 298 4686
R000
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Section 5: Company Secretarial Function
The primary function of the company secretary is to act as the link between the board and management and to
facilitate good relationships with the shareholder. The company secretary is responsible for general administration
and, more specifically, to ensure compliance with good corporate governance practices and provide guidance to
directors on corporate governance principles and all relevant legislation.
Section 6: Risk Management and Internal Controls
6.1 Overview
Effective risk management is integral to the company’s objective of consistently adding value. Management is
continuously developing and enhancing its risk and control procedures to improve mechanisms for identifying and
monitoring risks.
Operating risk is the potential for loss to occur through a breakdown in control, information, business processes and
compliance systems. Key policies and procedures are in place to manage operating risk and involve segregation of
duties, transaction authorisation, supervision, monitoring and financial and managerial reporting. Financial risk
management is dealt with in the financial statements.
To meet its responsibility of providing reliable financial information, City Power maintains financial and
operational systems of internal controls. These controls are designed to provide reasonable assurance that
transactions are concluded in accordance with management authority, that assets are adequately protected against
material loss or unauthorised acquisition, use or disposal, and transactions are properly authorised and recorded.
The system includes a documented organisation structure and divisions of responsibility, established policies and
procedures, including a code of ethics to foster a strong ethical climate. The system also includes the careful
selection, training and development of people.
Internal auditors monitor the operation of internal control systems and report findings and recommendations to
management and the board of directors. Corrective actions are taken to address control deficiencies and other
opportunities for improving the system. The board, operating through its audit committee, supervises the financial
reporting process and internal control systems.
Executive committee members’ remuneration
Salary
Other
allowances
Performance
bonus Travel Total
R000's
MA LISHIVHA 334 12 57 128 531
MET MASHAO 671 16 141 128 956
CS MASOLO 507 12 59 51 629
NS MBEWU 475 12 36 62 586
MR MOJAPELO 408 21 57 133 618
T Z NKOSI 279 168 191 53 691
NP NSELE 491 12 62 84 650
VP PADAYACHEE 949 60 193 128 1330
SG XULU 594 28 77 131 831
MJ SMITH 447 12 40 93 592
Total 5155 355 913 990 7413
R000's
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There are inherent limitations in the effectiveness of any system of internal control, including the possibility of
human error and the circumvention or overriding of controls. Even an effective internal control system can,
accordingly, provide only reasonable assurance on the preparation of financial statements and safeguarding of
assets. The effectiveness of internal control systems can also change with circumstances.
A documented and tested business continuity plan exists to ensure the continuity of business-critical activities.
The company assessed its internal control systems in relation to criteria for effective internal control over financial
reporting described in its internal control manual. The internal control process has been in place up to the date of
approval of the annual report and financial statements. Based on its assessment, the company believes that, as at 30
June 2008, its system of internal control over financial reporting and over safeguarding assets against unauthorised
acquisitions, use or disposition, met the requisite criteria.
6.2 Risk Management Process
6.2.1 Background
City Power is a municipal-owned enterprise (MOE), owned by the City of Johannesburg (CoJ). As such, City Power
is continuously ensuring alignment and compliance to CoJ requirements. City Power’s risk management process is
aligned and has adopted the CoJ risk management framework.
6.2.2 Broad Definition
Risk is defined as an event that may have an impact on the ability of the company to achieve its business objectives.
6.2.2.1. Risk Management Process
City Power’s risk management process has four broad steps:
• Risk identification
• Risk assessment and treatment
• Monitoring and reporting
• Auditing
Figure 6.1: Risk management process
6.2.2.2 Risk Identification
The City Power risk identification process is aligned to the CoJ framework. Company risks are identified annually
and form part of the risk register. These risks are influenced by the executive committee, taken before the audit
committee of the board and then approved by the board. Approved risks are incorporated in the business plan.
Risk assessment
and treatment Risk
identification
Monitoring
and reporting
Auditing
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6.2.2.3 Risk Assessment and Treatment
Once risks have been identified, they must be subjected to a consistent assessment process to ensure City Power
achieves an objective and holistic result that can inform its risk profile.
Risk is measured in two ways:
• By the likelihood or frequency of the risk occurring
• By the severity/impact on City Power of the risk occurring
The City of Johannesburg has developed a two-stage assessment process to assess and quantify identified risks.
6.2.2.3.1 Stage One – Impact and likelihood The first stage involves an assessment of the potential impact (or severity) of each risk, and then the likelihood of
the event actually occurring. Each risk is scored on a scale of one to five. Table 6.1 shows the criteria used to assess
the potential impact/severity of each risk occurring.
Table 6.1: The criteria used to assess the potential impact/severity of each risk occurring
Assessment of impact/severity
Financial Reputation Stakeholders Customers
1
No
t si
gn
ific
ant Event would have little
financial impact on
either income or
budget
Contained within the
individual service area.
From a regulatory
perspective, minor fines or
penalties may have been
suffered
Employees may have
suffered minor first
aid injuries. Event
may have resulted in
localised staff morale
problems
Customers may have
been minimally
impacted. Event may
impact minimally on
a performance target
achievement
2 – 3
Min
or
Event would have
moderate financial
impact (>2%) on either
income or budget
Affects a significant number
of service areas, but with
likely short-term impact on
public memory. From a
regulatory perspective, fines
or penalties >R50k may
have been suffered.
Customers may have been
impacted so that complaints
result in media coverage
(suburban newspapers)
Employees may have
suffered temporary
disabling injuries.
Event may have
resulted in staff loss
with minor to
moderate
consequences
Event may impact on
a performance target
achievement where a
major milestone was
missed by more than
one month, impacting
on a client segment
4 – 5
Mod
erat
e
Event would have
serious financial
impact (>4-6%) on
either income or
budget
Regulator inquiry with
medium-term impact on
public memory. From a
regulatory perspective, fines
or penalties >R100k may
have been suffered.
Customers may have been
impacted so that complaints
result in media coverage
(local newspaper, not front
page)
Employees may have
suffered multiple
temporary disabling
injuries. Event may
have resulted in staff
loss with serious
consequences
Event may impact on
a performance target
achievement where a
major milestone was
missed by more than
three months and
subsequent
interruption over
several days to
customers
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Assessment of impact/severity
Financial Reputation Stakeholders Customers
6 – 7
Maj
or
Event would have very
serious financial
impact (>8%) on either
income or budget
Medium-term public impact
with minor political
implications. From a
regulatory perspective, fines
or penalties >R150k may
have been suffered.
Customers may have been
impacted so that complaints
result in media coverage
(national TV headlines) and
loss of service >1 month
Employees may have
suffered multiple
permanent disabling
injuries. Event may
have resulted in staff
loss with very serious
consequences
Event may impact on
a performance target
achievement where a
major milestone was
missed by more than
six months, resulting
in a major customer
impact
8 – 9
Cat
astr
ophic
Event would have
catastrophic financial
impact (>15 to 25%)
on either income or
budget
Long-term impact on public
memory and major political
implications. From a
regulatory perspective, fines
or penalties >R500k may
have been suffered.
Customers may have been
impacted so that complaints
result in media coverage
(national TV headlines) and
loss of service >6 months
Employees may have
suffered fatalities.
Event may have
resulted in staff loss
with catastrophic
consequences
Event may impact on
a performance target
achievement where a
major milestone was
missed by more than
eight months to over
one year
Table 6.2 shows the criteria used to assess the likelihood of the risk occurring.
Table 6.2: Criteria used to assess likelihood of risk occurring
Likelihood
descriptor
Description Probability
Almost certain – 8-9 Event has occurred within the last year
repeatedly
Event is certain to occur within this
financial year.
Likely – 6-7 Event has occurred within the last financial
year
Event is likely to occur in this
financial year.
Possible – 4-5
Event has a probability of occurring at some
time in the next year
Event has been recorded within
organisation as well as in sector in the
last two years
Unlikely – 2-3
Very few recorded or known incidents.
Reasonable opportunity of occurring as it has
occurred in other organisations in the sector
Event may occur at some time in the
next two years
Rare – 1
Event may occur in exceptional circumstances.
No recorded incidents or little opportunity for
occurrence
No event recorded in the last three
years
The product of this stage-one assessment of impact and likelihood is an inherent risk score, which can range from
a minimum of 1 to a maximum of 25, by multiplying the frequency and impact scores.
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6.2.2.3.2 Stage two – Development of Risk Drivers and Risk Causal Model Risk drivers are those elements that tend to be the cause of the risk occurring. Risk drivers are a key process in risk
management as they provide indepth understanding of the risk and analysis of the drivers leads to effective
monitoring of the risk, as well as development of controls to mitigate or manage the risk. These will be measured
and monitored as per the next phase of this project. The formulation of risk drivers is to assist with understanding
the risk (ie make the risk more tangible) and in formulating controls, both pre- and post, and to manage/minimise
the risk drivers, which in turn reduces the overall headline risk. If drivers are not identified, then the process is only
providing a snapshot of risks at a point in time.
6.2.2.4 Monitoring and Reporting
• Monthly, quarterly and annual reporting on progress with status of action items.
6.2.2.5 Auditing
• This process will be audited continuously
6.2.2 City Power’s Top 13 Risks
Using this process, City Power has identified 13 risks and developed mitigating strategies for each as listed below.
Strategic
risk
number
Risk
description Background to risk Current controls
Actions to improve
management of risk
1 Cable theft Increase in copper price
led to increase in network
tampering and vandalism
Increased security in hot
spots. Increased roll out
of CCTV cameras
Invest more in information
technology solutions
2 Kelvin’s
failure to
perform on
power
purchase
agreement
(PPA)
High pass-through costs
as a result of poor
efficiencies – relates to
fixed and variable costs.
*Inability of Kelvin
Power substation to
supply at required levels
in terms of PPA
Penalties on poor
delivery. Hold monthly
meetings
Management of current
controls
3 Eskom's
capacity
problems
Eskom’s failure to supply
(generation and
transmission)
*Ability of Eskom
network to sustain new
capacity demand
City Power has applied
for increased capacity
from Eskom.
*Investigating distributed
generation options.
*Implementing DSM
program. Resuscitate gas
turbines
Investigating alternative
sources of energy, eg piloting
solar-powered street lights
4 Business's
inability to
fund high
capital and
operational
requirements
out of current
cash flows or
future tariff
applications
Unable to meet GDS,
IDP, and business plan
targets, including
electrification, 2010,
inner-city project, public
light, etc.
*Unable to refurbish
aging network at
acceptable rate.
*Insufficient funds to
upgrade network, eg 4th
and 5th intake points.
*Compliance to MFMA
requirements
Looking at alternative
sources of funding: PPP,
revenue-generating
projects, additional grant
funding
KFW (German Bank)
consultant in South Africa has
met with treasury. City's CFO
has agreed to isolate this issue
from the rest of the city's
process. Awaiting approval at
the next lekgotla
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Strategic
risk
number
Risk
description Background to risk Current controls
Actions to improve
management of risk
5 Impact of
HIV/Aids on
productivity
in the
company
Alignment with mayoral
priority. Increased
absenteeism, due to sick
leave, impacting on
overall performance
Reinforcing partnership
with CoJ. Increase access
to city’s helpline.
Provision of immune
boosters and nutrition.
Dispense and administer
ARVs
Capacitation of wellness
department
6 Non-
technical
losses
Meter tampering. Illegal
connections. Faulty
meters and inability to
bill customers
Meter tampering - semi
AMR and tamper-proof
meters with protective
structures have been
installed. Illegal
connections removed and
replaced with tamper-
proof meters with
protective structures.
Currently using JMPD to
enforce by-laws.
Continuous audits
Established a revenue
protection department to
ensure implementation and
effectiveness of controls
7 Customer
satisfaction
levels
Causes include: outages,
capacity demand, etc
*Low level of positive
public opinion (company
image)
Call centre and walk-in
centres have been
capacitated. Ongoing
training for call centre,
walk-in centre and billing
employees. More
accessibility to customers
and increased number of
vending stations
Improved shift roster, call
resolution and navigation.
Increased number of service
providers to allow for better
footprint (vending machines)
8 Management
of domestic
revenue
collection
Issues relating to
management of credit
control for domestic
accounts
Conversion from
conventional to prepaid.
Manage service level
agreement with the city
Management of SLA and
conversion from conventional
to prepaid
9 Network
interruptions
Age of the network.
Uncontrollable events
such as insufficient
capital for upgrading and
refurbishment of MV and
LV network
Capital investment
programme in place.
*Crime intelligence (risk
control). Way leave
processes and
implementation of asset
management maintenance
system
Crime intelligence needs to
be improved. Access controls
to be increased on load
centres. Penalties to be put in
place for third parties
damaging our network
10 Organi-
sational
change due to
restructuring
Establishment of
Phakama and its
implications on staff
morale and productivity
Engage relevant
stakeholders and staff
communication
Engage relevant stakeholders
and staff communication
11 Not
achieving an
unqualified
audit report
Previous years’ qualified
audit report.
Mayoral priority
Actively addressing all
issues raised in previous
year's management report
Corrective action
implemented and monitored
monthly
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Strategic
risk
number
Risk
description Background to risk Current controls
Actions to improve
management of risk
12 Impact of
restructuring
of electricity
industry
New areas of supply –
burden new areas of
supply will put on
existing resources.
*Impact of new areas of
supply on profitability.
*Employee productivity
about implications of EDI
restructuring. Different
standards and tariffs
EDI restructuring
workgroups established
Implementing current
controls
13 Insufficient
skills
capacity to
support the
business
Ineffective talent
management. Insufficient
skills pool
Prioritisation of skills
focus. Create a pool for
talent release.
Capacitating skills level
Formulating training strategy
that supports core business
functions. Centralisation of
budget. Implementation of
retention strategy. Definition
of critical skills
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Section 7: Internal Audit Function
City Power’s internal audit department has a current staff complement of 10 qualified people. It has a specific
mandate from the audit committee and independently appraises the adequacy and effectiveness of the company’s
systems, financial internal controls and accounting records, reporting its findings to divisional management and the
audit committee. The internal audit general manager (head of internal audit) reports administratively to the
managing director and functionally to the audit committee. The head of internal audit has direct access to the
chairman of the board.
The internal audit coverage plan is based on risk assessments performed at each operating unit. The coverage plan is
updated annually, based on the risk assessment, company business plan and results of audit work performed. This
ensures that audit coverage is focused and addresses the entire audit universe.
Section 8: Response to the Auditor-General Report
City Power obtained an unqualified audit report for the financial year 2007/08. There were no matters of emphasis
reported by the Auditor-General. This is a significant improvement for the company to obtain an unqualified audit
report for two consecutive years. The Auditor-General has applauded management for the improvement in the
quality of information. Management has committed itself to strengthening and improving processes to ensure items
raised by the Auditor-General are corrected and will not reoccur.
Section 9: Corporate Ethics and Organisational Integrity
The company has a code of conduct that has been fully endorsed by the board as part of the supply chain
management policy and procedure and applies to all its directors and employees. This code is regularly reviewed
and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism.
In summary, the code requires that, at all times; all company directors and employees act with utmost integrity and
objectivity and in compliance with the letter and spirit of both the law and company policies. Failure by employees
to act in terms of the code results in disciplinary action. The policy and procedure is discussed with each new
employee as part of induction training and all employees are asked to sign a declaration confirming their
compliance with the code. A copy of the code is available to interested parties on request. A toll-free anonymous
telephone facility exists for reporting non-adherence to the code or ethics-related matters. Furthermore, any breach
of the code is considered a serious offence and is dealt with accordingly; as a result, this acts as a deterrent.
Section 10: Sustainability Report
10.1. Social Development
The company is actively involved in promoting social development in terms of learnership and internship
programmes.
The company awarded a total of 64 bursaries to young unemployed people of whom 38.4% are women. This
initiative will continue, and plans are in place to increase the number of bursaries in the 2009 academic year.
In the 2007/08 financial year, a total of R3.8 million was spent on employees attending conferences and seminars,
and R3.3 million on employees attending training courses. This directly supports the empowerment of employees to
create a learning organisation.
During the year, 44 employees resigned, seven were dismissed and 21 retired. This equates to 4.84% of the staff
complement. The company performs exit interviews with all staff resigning and the outcomes of these interviews
are incorporated into the staff retention plan. With the national skills shortage, resignations are a risk to the
company, but skills development and training initiatives in the form of learnerships (20), retraining existing artisans,
annual intake of bursars and an annual intake of technicians in training are being implemented to mitigate this risk. .
10.2. Environmental Development
City Power has an environmental management system in place, aligned with CoJ systems. Policies and procedures
have been approved by the relevant governance bodies and implement action targets have all been met.
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The company is extremely proud of its safety record. The number of workplace injuries has declined over the years
and currently the measure for such injuries (DIFR) is at 0.87, compared to the industry norm of 1. There is an
ongoing process to improve management practice and develop a culture of safety to ensure all possible accidents are
prevented.
10.3 Economic Development
Providing electricity to all residents of the CoJ supply area is an integral part of the City Power supply mandate.
That, and electrification of new areas, is a critical component of the capital budget. Chapter 2 section 3 provides a
detailed overview of major capital projects affecting the community.
During the year, over R1 billion was spent on BEE companies (73% of the value of tender awards).
City Power is a tax-paying entity. However, and with the large capital programme in place, the associated tax
allowances ensure that the company will not be in a tax-paying position for a number of years.
Section 11: Corporate Social Responsibility Report
City Power’s social responsibility projects have become an integral part of the City of Johannesburg’s community
dvelopment projects. While the utility has sufficient capacity to embark on its own projects and initiatives, the CoJ
regards these as part of its own community development initiatives. It has thus become necessary for City Power to
align its projects with those conducted by CoJ.
11.1 Youth economic development
One of the major challenges facing the youth of South Africa is the issue of employment. It is noteworthy that South
Africa appears to be the only country in the world with an organisation of unemployed youths, formed with the aim
of challenging employers to employ youths who graduate from universities and colleges. City Power has taken this
opportunity to extend business opportunities to some youth companies in the area of corporate gifts, branding
materials, labour contracts, design and layout and a few other areas where these companies excel.
11.2 Early childhood development
In a country like South Africa, and in a city such as Johannesburg, the importance of developing children at the
early stage of their lives cannot be overemphasised. City Power has therefore selected early childhood development
as one of its areas of support. City Power went into Finetown, south of Johannesburg, and built a preschool,
contributing about R170 000 towards the project. This building has three classrooms and a kitchen. City Power
donated some R170 000 to Noah’s Ark, a charity organisation in Zondi, Soweto. City Power staff collected clothes
and food for donations for various charities in our area of supply. City Power also donated food to soup kitchens in
our area of supply. Donations were made through charity golf days to the Vincent Tshabalala Educational Trust.
11.3 Women Development
The City of Johannesburg’s community development strategy considers the upliftment of women as one of the
major challenges the city has to overcome. City Power has spent over 22% of its BEE budget on women-owned
companies. One of the major challenges facing this target group is the reality that much of the equipment City
Power procures is produced by international original equipment manufacturers (many of which are not owned by
either blacks, youths or women). It is therefore difficult for City Power to increase this particular procurement
within the timeframes the company would want.
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Chapter 4: Human Resources and Organisational Management
The organisational structure of City Power at June 2008 is shown below:
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Section 1: Human Resource Management
Following the implementation of the human resources strategy in July 2005, the emphasis was on developing and
implementing a job-grading system, remuneration philosophy and strategy, attraction and retention strategy, skills
audit and enhancing the existing performance management system. Based on the approved strategy, the following
were delivered:
• The TASK job-evaluation system was implemented and approximately 98% of all positions in the company
graded. A moderation committee was appointed to maintain the job-evaluation process internally.
• A remuneration philosophy and strategy was rolled out to the business and due recognition is being given to
attracting and retaining scarce skills. This is further supported by the implementation of technical and non-
technical salary bands.
• Good progress was made with rolling out the skills audit, and plans are under way to accelerate technical
training in the new financial year.
• Ongoing initiatives are in place to enhance the existing performance management system and related
processes.
Section 2: Employment Equity
City Power submitted an employment equity report, dated 1 October 2007, as part of its compliance with the
national legislative requirements of the Employment Equity Act.
The company target on affirmative action (AA) for the 2007/8 financial year was 70%. The company achieved a
69.41% affirmative action rate for supervisory levels and above.
The company target on gender equity (GE) for the 2007/8 financial year was 20%. By 30 June 2008, the company’s
gender equity ratio was 23.72% (supervisor and above).
Clearly, the company has delivered in terms of employment equity numbers, and structures and policies are in place
to govern this area. However, these documents still require some improvement and enhancement because the
organisation is dynamic. Challenges remain on specific employment equity targets:
1. On disability management (holistic approach), although some advancements were made in making our
environment more accessible to people with disabilities
2. Other related employment equity programmes, eg
a. Diversity management
b. Setting numerical goals
c. Taking due cognisance of employment equity when recruiting for vacant positions
d. Communication of employment equity initiatives
e. Close and ongoing monitoring.
Section 3: Skills Development and Training
For City Power to be successful and deliver on its shareholder compact, it is critical that a pool of skills, and the
attributes and capabilities of its human resources be continually developed. As a direct result, the company is
targeting building a sustainable skills and competence base through ongoing human resource development
initiatives.
Our skills development programmes are in line with the requirements of the Skills Development Act and our
workplace skills plan (WSP) is aligned to our business plan. Focus is placed on occupation-specific programmes,
management development and legally required training.
Emphasis was placed on developing leadership within the company and, as a result, four levels of management
development were rolled out during this financial year. Supervisors and managers were routed through a foundation
programme, and modules covering management development, leadership development and executive development.
Currently enrolled with the company are 15 bursars doing their S2, S3 and S4 levels. They consist of 10 African
males, two Indian males and three African females. Seven bursars are busy with their work-back period. Since
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2005, the company has awarded 64 bursaries to young unemployed people. This initiative will continue, and plans
are in place to increase the number of bursars in the new academic year.
Section 4: Performance Management
Performance management was implemented for all occupational levels in the company. Focus areas for the past
year included adjusting scoring principles for individuals and the company to begin aligning these to principles
adopted by the shareholder. This resulted in improved individual performance, improved team performance and the
attainment of company objectives.
This balanced scorecard forms the basis for our performance management processes and practices. Performance
indicators are linked to business plans and the IDP scorecard as required by the shareholder. Substantial emphasis
was placed on complying with the MFMA and obtaining a clean audit report.
The forthcoming 2010 FIFA World Cup remains a firm objective, and has already been factored into our strategies
and operational plans. We will, however, continue to strive for operational effectiveness and, with our customers
and stakeholders, will collectively focus on improving the environmental well-being of our society.
Section 5: HIV/AIDS in the workplace
5.1 HIV/Aids structures
A comprehensive structure is in place, including comprehensive case management, HIV/Aids steering committee,
availability of trained peer educators, voluntary counselling and testing, 24-hour employee helpline, etc.
5.2 Education
The company has a fully-fledged clinic, manned by professional health practitioners (a doctor, social workers and
occupational health nurses). This clinic was extended to other geographical areas in the company. An ongoing
education programme has been instituted with the assistance of these practitioners, among other duties. This
initiative is progressing well.
5.3 Monitoring and measuring performance
• Monthly, quarterly and annual reporting to SHER committee and board
• Case management of infected employees
• Quality assurance by City Power HIV/Aids steering committee
• Alignment with national policy and World Health Organisation
• Networking with non-governmental organisations
• Benchmarking with prominent and well-established organisations
• Aligning City Power policy and strategy with CoJ policy.
5.4 Case management
Employees who have declared their status have been put on a treatment regime, ie immune boosters and ARVs,
nutrition support, depending on the stage of their infection.
Number and cost to employer of all health personnel: Number Cost / per annum
- Professional (doctors/specialists) – contract 1 R600, 000
- Professional (nurses ) and non-professional (gym staff ) 6 R1, 162, 600
- Non-professional (clinic staff ) – administrator 1 R102, 000
- Professional HIV/Aids consultant and EAP consultants 4 R1, 078, 000
- Temporary 0 0
- Contract 0 0
Total annual patient headcount for service provided by the entity: 300 x 1900 R57, 000
Total operating cost of health (clinic) function: R3, 599, 600
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Section 6: Employee Benefits
The company is a participating employer in a number of retirement funds through which the CoJ and its associated
utilities, agencies and companies (UACs) provide post-employment benefits to all permanent employees through
three defined contribution funds and five defined benefit funds. The following funds provide retirement benefits for
City Power employees:
Defined contribution funds: (In the case of these defined contribution funds, contributions paid have been
expensed as required in terms of AC 116).
• E-Joburg Retirement Fund
• City Power Retirement Fund
• Municipal Employees Gratuity Fund
Defined benefit funds:
• Johannesburg Municipal Pension Fund
• City of Johannesburg Pension Fund
• Municipal Employees Pension Fund
• Soweto City Council Pension Fund
• Joint Municipal Pension Fund
Section 7: Supply chain management and black economic empowerment
Function:
Sub-function: Other administration (procurement)
reporting level Detail Total
Analysis of function:
1 Details of tender/procurement activities:
Total number of times tender committee met during year:
o Bid specification committee
o Bid evaluation committee
o Exco adjudication committee
o Bid adjudication committee level 2
o Bid adjudication committee level 1
264
312
110
51
29
Total number of tenders considered:
o Exco adjudication committee
o Bid adjudication committee level 2
o Bid adjudication committee level 1
124
17
15
Total number of tenders approved:
o Exco adjudication committee
o Bid adjudication committee level 2
o Bid adjudication committee level 1
96
14
12
Average time taken from tender advertisement to award:
Three months for massive tenders which are advertised for 30 days;
small tenders may take three weeks but vary with complexity of project).
2 Details of tender committee:
Executive committee bid adjudication committee
S Zimu (chair)
B Leshnick, V Padayachee, L Mashao, S Xulu, N Nsele, M Mojapelo,
A Lishivha, S Masolo, E Sibuta, L Mbewu, C Solomon, M Smith
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Chapter 5: Functional Area Service Delivery Reporting
Electricity distribution
Reporting
level Detail Total Cost
Includes bulk purchase and distribution of
electricity
Analysis of
function:
1 Total quantity and cost of bulk electricity
purchases in kilowatt-hours and rand (GWh)
13,100,882
R
(2,783,271)
Bulk electricity purchases not broken down
into consumer categories
2 Total quantity and receipts for bulk electricity
sales in kilowatt-hours and rand (GWh)
11,464,426
R
(4,199,397)
Revenue split not known at this point
3 Total electricity losses in kilowatt-hours and
rand
(GWh)
444,840
R (163,612)
4 Number of households with electricity access,
and type and cost of service: 300,013
5 Number of new connections: Cost per new connection
6 Number and cost of disconnections and
reconnections R (30,120)
Disconnections 4,317
Reconnections 48,958
7 Number and total value of electrification
projects planned and current:
R (000)
- Current
- Planned (future years)
8 Estimated backlog in number (and cost to
provide) of connections:
There are no electrification backlogs. As
housing projects are proclaimed, they are
electrified immediately
9 Free basic service provision:
- Quantity (number of households affected) 230,408
- Quantum (value to each household) 50kWh/m (R40.80)
All households on the Lifeline tariff enjoy
50kWh of free electricity per month This
includes 94 854 prepaid customers and
135 554 conventionally metered customers
R21.62pm
R259.44pa
10 Total operating cost of electricity distribution
function
R000
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Street lighting
Reporting
level Detail Total
Cost
(Rm)
Overview: Includes all activities associated with provision
of street lighting to the community
- 55.2
Analysis of
function:
1 Number and total operating cost of street lights
servicing population:
186 000 80
2 Total bulk kilowatt hours consumed for street
lighting:
100m kWh 25
5.1 Finance and Administration
5.1.1 Debtor billings
CoJ City Power Total
July 164 131 944 254 588 340 418 720 284
August 164 401 303 279 238 989 443 640 292
September 157 767 373 245 045 594 402 812 967
October 115 939 634 203 262 446 319 202 080
November 119 539 487 166 245 290 285 784 776
December 116 000 982 207 396 758 323 397 740
January 2008 106 697 939 196 723 706 303 421 645
February 111 351 735 195 741 267 307 093 002
March 101 073 663 220 716 856 321 790 519
April 95 916 875 241 345 881 337 262 756
May 107 997 384 232 738 189 340 735 573
June 132 957 812 263 166 176 396 123 988
Total 1 493 776 132 2 706 207 490 4 199 985 622
5.1.2 Debtor collections
CoJ City Power Total
July 127 737 440 229 210 184 356 947 624
August 140 201 782 269 746 040 409 947 822
September 144 690 971 241 631 026 386 321 998
October 129 947 061 242 823 008 372 770 070
November 128 880 605 215 681 816 344 562 421
December 104 045 376 190 060 184 294 105 560
January 2008 111 415 753 194 748 773 306 164 527
February 95 282 298 201 332 587 296 614 885
March 104 199 076 194 560 736 298 759 812
April 94 057 824 202 234 359 296 292 183
May 111 218 334 202 729 403 313 947 737
June 106 162 383 248 960 182 355 122 565
Total 1 397 838 903 2 633 718 298 4 031 557 202
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5.1.3 Write-off of debts: number and value of debts written off
CoJ City Power Total
July 2007 3 672 508 3 672 508
August 2007 2 356 856 2 356 856
September 2007 956 259 956 259
October 2007 1 051 148 1 051 148
November 2007 710 484 710 484
December 2007 122 806 122 806
January 2008 99 366 99 366
February 2008 226 081 226 081
March 2008
April 2008 138 014 138 014
May 2008 51 458 51 458
June 2008
Total 9 384 980 9 384 980
5.1.4 Credit payments
Current <30 <60 <90 <120 Total
Eskom 333 415 695 2 083 171 1 589 151 337 088 017
5.1.5 External loans
Total loans received and paid during the year
Balance 1 July 07 Loans received Loans repaid Loans accrued
Balance
30 June 08
Shareholder loans 581 814 023 581 814 023
Shareholder loan -
Midrand 42 978 817 42 978 817
Conduit loan 373 615 310 70 516 802 303 098 509
Conduit loan -
Midrand 19 958 807 2 925 230 17 033 578
Capex loan 2002 71 609 587 14 332 074 57 277 514
Capex loan 2003 160 144 294 23 661 107 136 483 188
Capex loan 2004 132 075 672 15 774 582 116 301 091
Capex loan 2005 291 037 462 29 972 250 261 065 212
Capex loan 2006 403 978 736 34 363 693 369 615 043
Capex loan 2007 629 637 358 145 446 723 40 052 219 -199 035 000 535 996 862
Capex loan 2008 367 565 806 14 314 320 256 434 193 609 685 679
Total 2 706 850 068 513 012 529 245 912 277 57 399 193 3 031 349 516
5.1.6 Delayed and defaulted payment
None
5.1.7 Number of indigent customers
The number of indigent customers is 230 408
The quantum of the subsidy they received is R59 777 051
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Chapter 6: Audited Statements and Related Financial Information
Annexure A: Audited financial statements
Annexure B: Auditor-General report
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ACRONYMS AA – affirmative action
AMR – automated meter reader
AMP – amperes
BEE – black economic empowerment
BSC – balanced scorecard
CAIDI – measures on average how long a customer was out
CAIFI – customer average interruption frequency index
CAPEX – capital expenditure
CoJ – City of Johannesburg
DIFR – disabling injury frequency rate
DME – Department of Minerals and Energy
DSM – demand-side management
EDI – electricity distribution industry
EE – energy efficiency
EPWP – expanded public works programme
GAAP – generally accepted accounting principles
GDS – growth development strategy
GE – gender equity
HV – high voltage
IDP –integrated development plan
IEP – integrated energy planning
ISD – Infrastructure and Services Department (ISD)
JDA – Johannesburg Development Agency
JMPD – Johannesburg Metro Police Department
JRA – Johannesburg Roads Agency
KPI – key performance indicator
KVA – kilovolt ampere
KWH – kilowatt hour
LPU – large power users
LV – low voltage
MV – medium voltage
MVA – megavolt amperes
MFMA – Municipal Finance Management Act
MOE – municipal-owned entity
MSA – Municipal Systems Act
NERSA – National Energy Regulator of South Africa
NPR – network performance related
OPEX – operating expenditure
RED – regional electricity distributor
SAIDI – system average interruption duration index
SAIFI – System average interruption frequency index
SCADA – supervisory control and data acquisition
SDA – service delivery agreement
SHER – safety, health, environmental and risk
SHU – shareholder’s unit
SPU – small power users