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Transcript of CITY POWER JOHANNESBURG (STATE OWNED COMPANY) …
City Power Quarter 3 Final Report 1
CITY POWER JOHANNESBURG
(STATE OWNED COMPANY) LIMITED
Quarterly Performance Report
Final
Quarter 3 of Financial-Year 2020/2021
Reporting Period: 01 January 2021 – 31 March 2021
(In terms of Section 121 of the Municipal Finance Management Act, 2003 and Section 46 of the Municipal
Systems Act, 2000)
City Power Quarter 3 Final Report 2
CITY POWER JOHANNESBURG
(SOC) LIMITED
COMPANY INFORMATION
Registration number : 2000/030051/30
Registered address : 40 Heronmere Road
Reuven
Booysens
Postal address : PO Box 38766
Booysens
2016
Telephone number : (011) 490-7000
Fax number : (011) 490-7377
Website : www.citypower.co.za
Bankers : Standard Bank of SA Limited
ABSA
Auditors : Auditor-General South Africa
City Power Quarter 3 Final Report 3
Official Sign Off:
It is hereby certified that this Third Quarter Performance Report
Was developed by the management of City Power SOC Ltd under the guidance of the Chief
Executive Officer (CEO)
Considers all the relevant policies, legislation and other mandates for which City Power SOC Ltd is
responsible
Accurately reflects the Performance that City Power SOC Ltd has achieved in the 3rd Quarter
FY2020/2021
City Power Quarter 3 Final Report 4
TABLE OF CONTENTS
CHAPTER 1: LEADERSHIP AND CORPORATE PROFILE .................................................................................................. 10
1.1. Foreword: Board Chairperson, Adv. Lindiwe Maseko ......................................................................... 10
1.2. Foreword: Chief Executive Officer, Mr. Mongezi Ntsokolo ................................................................. 11
1.3. Foreword: Chief Financial Officer, Ms. Mfuni Xolo ............................................................................... 12
1.4. Corporate Profile ........................................................................................................................................ 13
1.5. Shareholder Alignment to GDS 2040 and IDP ....................................................................................... 14
1.6. City Power Alignment to Batho Pele Principles .................................................................................... 15
CHAPTER 2: GOVERNANCE ............................................................................................................................................. 16
2.1. Board Composition and Key Activities ................................................................................................... 16
2.2. Remuneration of Board of Directors ....................................................................................................... 19
2.3. High-level Organizational Structure ........................................................................................................ 20
2.4. Risk Management ...................................................................................................................................... 21
2.5. Litigation Report ......................................................................................................................................... 48
2.6. Compliance Management ..................................................................................................................... 55
2.7. Safety, Health, Environment, Risk and Quality Management (SHERQ) ............................................ 64
2.8. Information Communication Technology ............................................................................................. 69
2.9. Security Risk Management ....................................................................................................................... 82
2.10. Security Risk Management Plans for Quarter 3 .................................................................................... 88
CHAPTER 3: SERVICE DELIVERY PERFORMANCE ........................................................................................................... 89
3.1. Performance Achievement Comparison (Five Financial-Years) ....................................................... 90
3.2. Performance Highlights and Challenges ............................................................................................... 90
3.3. City Power Quarter 3 Actual Performance ........................................................................................... 90
3.4. City Power Service Level Standard Quarter 3 Actual Performance................................................. 95
3.5. Variance Explanation................................................................................................................................ 99
3.6. Yearend Forecast .................................................................................................................................... 102
3.7. Statement of Accounts Owed by and to Government Departments and Public Entities
(Updated) ........................................................................................................................................................... 103
CHAPTER 4: HUMAN RESOURCE AND TRANSFORMATION ........................................................................................ 110
4.1 High Level Organisational Structure Review ....................................................................................... 110
4.2 Create Capacity...................................................................................................................................... 111
4.2.1 Talent Acquisition Programme .............................................................................................................. 111
4.2.2 Vacancy Rate .......................................................................................................................................... 111
4.2.3 Staff Cost Vs Total OPEX .......................................................................................................................... 112
4.3 Build Capability ........................................................................................................................................ 113
4.3.1 Skills Development ................................................................................................................................... 113
4.4 Empower for Commitment .................................................................................................................... 115
4.4.1 Employment Equity and Affirmative Action Plans and Programmes ............................................. 115
4.5 Boosting Compliance ............................................................................................................................. 115
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4.5.1 Audit, Risk and Compliance .................................................................................................................. 115
4.6 Employee Relations ................................................................................................................................. 116
4.7 Enabling Continuity ................................................................................................................................. 116
4.7.1 Employee Wellness Programme ............................................................................................................ 116
4.8 Employee Assistance Programme ........................................................................................................ 118
Conclusion .......................................................................................................................................................... 118
CHAPTER 5: FINANCIAL PERFORMANCE ..................................................................................................................... 119
5.1. Highlights and Lowlights ............................................................................................................................ 119
5.2. Statement of Financial Performance and high-level notes ............................................................... 119
5.3. Statement of Financial Position and High-Level Notes ........................................................................ 133
5.4. Cash Flow Statement ................................................................................................................................. 135
5.5. Operation and Capital Budget ............................................................................................................... 136
5.6. Loan Claims ................................................................................................................................................. 138
5.7. Tariffs ............................................................................................................................................................. 138
5.8. Report on the Expanded Public Works Programme ............................................................................ 138
5.9. Procurement Policies and Practices: Compliance with 30 days NT payment policy rule ............ 139
5.10. Supply Chain Management: BEE Performance .................................................................................. 139
5.11. Approved Bids for Quarter 3 .................................................................................................................. 140
5.12. Register of Irregular Expenditure and Fruitless & Wasteful Expenditure .......................................... 142
CHAPTER 6: INTERNAL & EXTERNAL AUDIT FINDINGS ................................................................................................. 153
6.1. Constitution of the Internal Audit Function within City Power ......................................................... 153
6.2. Progress on Internal Audit Plan .............................................................................................................. 153
6.3. Progress on Resolution of Internal Audit and External Audit Findings ............................................. 155
6.4. Progress on Resolution of Internal Audit Findings ............................................................................... 155
6.5. Progress on Resolution of External Audit Finding (AGSA related audit findings) .......................... 156
6.6. Overall State of Internal Controls .......................................................................................................... 158
6.7. Conclusion ................................................................................................................................................ 158
ANNEXURE: SHAREHOLDER KPIS .................................................................................................................................... 160
GSPCR Performance Template ....................................................................................................................... 160
TABLES
Table 1: Shareholder Alignment to GDS 2040 and IDP ....................................................................................... 14
Table 2: City Power Alignment to Batho Pele Principles ............................................................................................ 15
Table 3: Board meetings in Quarter 3 – Non Executive Directors & Executive Directors ..................................... 17
Table 4: Board meetings in Quarter 3 – Independent Audit Committee Members ............................................. 17
Table 5: Remuneration – Executive Directors .............................................................................................................. 19
Table 6: Remuneration – Non-Executive Directors ...................................................................................................... 20
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Table 7: Remuneration – Independent Audit Committee Members ...................................................................... 20
Table 8: Revised Strategic Risk Register ....................................................................................................................... 22
Table 9: Litigations Table .................................................................................................................................................. 54
Table 10: Top 10 priority legislations/Codes ................................................................................................................. 59
Table 11: Compliance Assessments............................................................................................................................... 60
Table 12: Employee Incidents ......................................................................................................................................... 66
Table 13: ICT Audit Findings ............................................................................................................................................. 73
Table 14: ICT Strategic Risk .............................................................................................................................................. 76
Table 15: ICT Performance Management .................................................................................................................... 81
Table 16: ICT Operations .................................................................................................................................................. 82
Table 17: SRM Framework ................................................................................................................................................ 83
Table 18: Performance Against Security Indices ......................................................................................................... 88
Table 19: Five Finance-Years Comparison ................................................................................................................... 90
Table 20: City Power's Actual Quarter 3 Performance............................................................................................... 91
Table 21: City Power Detailed Scorecard .................................................................................................................... 95
Table 22: Quarter 3 Service Level Standard Performance ........................................................................................ 96
Table 23: Service Level Standard Detailed Performance ......................................................................................... 98
Table 24: Capital Expenditure Detail ........................................................................................................................... 136
Table 25: Controllable Capex ...................................................................................................................................... 137
Table 26: Non-Controllable Capex .............................................................................................................................. 137
Table 27: Sources of Funding ........................................................................................................................................ 138
Table 28: Expanded Public Work Programme ........................................................................................................... 138
Table 29: Invoice Payments in line with National Treasury Payment Policy Rule ................................................. 139
Table 30: BEE Performance ........................................................................................................................................... 139
Table 31: Approved Bids for Quarter 3 ........................................................................................................................ 140
Table 32: Exceptional Case Deviations ....................................................................................................................... 140
Table 33: Bid Status for Quarter ................................................................................................................................... 142
Table 34: Less than Three Quotation ........................................................................................................................... 142
Table 35: Irregular Expenditure ..................................................................................................................................... 150
Table 36: Fruitless and Wasteful Expenditure ............................................................................................................. 152
Table 37: GSPCR performance..................................................................................................................................... 160
GRAPHS
Graph 1: Number and Cost of Asset Claims (Quarter 3) ........................................................................................... 27
Graph 2: Public Liability Claims (Quarter 3) ................................................................................................................. 27
Graph 3: 12 months’ performance cycle re: April 2020 to March 2021.................................................................. 65
Graph 4: Total Incidents................................................................................................................................................... 84
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Graph 5: Total Suspects Arrested ................................................................................................................................... 84
Graph 6: Five Finance-Years Comparison.................................................................................................................... 90
Graph 7: City Power's Actual Quarter 3 Performance ............................................................................................... 91
Graph 8: Quarter 3 Service Level Standard Performance ........................................................................................ 96
DIAGRAMS
Diagram 1: City Power High Level Organizational Structure .................................................................................... 20
Diagram 2: CITY POWER STRATEGIC RISK REGISTER 2020-21 ...................................................................................... 21
Diagram 3: Human Capital Strategic Pillars ............................................................................................................... 110
Diagram 4: City Power High Level Organizational Structure .................................................................................. 111
TABLE OF ACRONYMS AND ABBREVIATIONS
Abbreviation/ Acronym Explanation/ Description
AGM Annual General Meeting
AGSA Auditor General South Africa
BAC Bid Adjudication Committee
BCM Business Continuity Management
BCP Business Continuity Plan
BEE Black Economic Empowerment
CAIDI Customer Average Interruption Duration Index
CAIFI Customer Average Interruption Frequency Index
Capex Capital Expenditure
CEO Chief Executive Officer
CFO Chief Financial Officer
COJ City of Johannesburg
CP City Power
DIFR Disabling Injury Frequency
DLP Data Leak Prevention
DR Disaster Recovery
DSM Demand Side Management
EAP Employee Assistance Programme
EE Employment Equity
EPWP Expanded Public Works Programme
ERM Enterprise Risk Management
EXCO Executive Committee
GDS Growth and Development Strategy
GE Gender Equity
GFIS Group Forensic Investigations Service
GIT Graduate in Training
GM General Manager
GMC General Management Committee
GRAS Group Risk and Assurance Service
City Power Quarter 3 Final Report 8
Abbreviation/ Acronym Explanation/ Description
GSPCR Group Strategy Policy Coordinator and Relations
HIRAC Hazard Identification and Risk Assessments Control
HV High Voltage
IAC Independent Audit Committee
ICT Information Communication Technology
IDP Integrated Development Plan
IFW Irregular, Fruitless and Wasteful
IMT Incident Management Team
ISO Internal Organization for Standardization
ISS Integrated Security System
IT Information technology
JMPD Johannesburg Metropolitan Police Department
Joburg Johannesburg
KPI Key Performance Indicator
kWh Kilowatt Hours
LLF Local Labor Forum
LPU Large Power User
MFMA Municipal Finance Management Act
MMC Member of the Mayoral Committee
MoU Memorandum of Understanding
MSA Municipal Systems Act
MV Medium Voltage
MWh Mega Watt hours
NAC Network Access Control
NERSA National Energy Regulator of South Africa
NED Non-Executive Director
NRS National Rationalized Standards
NT National Treasury
OHS Occupational Health and Safety
OHSA Occupational Health and Safety Act
OT Operational Technology
PC Personal Computer
PMS Performance Management System
RSSC Revenue Shared Services Centre
SABS South African Bureau of Standards
SAIDI System Average Interruption Duration Index
SAIFI System Average Interruption Frequency Index
SAP System Application and Production in Data Processing
SAPS South African Police Services
SARS South African Revenue Service
SCADA Supervisory Control and Data Acquisition
SCM Supply Chain Management
SDA Service Delivery Agreement
City Power Quarter 3 Final Report 9
Abbreviation/ Acronym Explanation/ Description
SHERQ Safety Health Environment Risk Quality
SLA Service Level Agreement
SLS Service Level Standards
SMS Short Message Service
SOC State Owned Company
SRM Security Risk Management
UIFW Unauthorised, Irregular, Fruitless and Wasteful
UPS Uninterrupted Power Supply
USDG Urban Settlement Development Grant
VAT Value Added Tax
VUCA Shareholder Vision, Understanding the sustainability game plan, re-
gaining Customer Confidence, and making our people more Agile.
YTD Year to Date
City Power Quarter 3 Final Report 10
CHAPTER 1: LEADERSHIP AND CORPORATE PROFILE
1.1. Foreword: Board Chairperson, Adv. Lindiwe Maseko
City Power Quarter 3 Final Report 11
1.2. Foreword: Chief Executive Officer, Mr. Mongezi Ntsokolo
City Power Quarter 3 Final Report 12
1.3. Foreword: Chief Financial Officer, Ms. Mfuni Xolo
For the third quarter ended 31 March 2021, City Power made a profit of R153 million before tax which is a
decrease as compared to the profit of R385 million in the third quarter of 2019/20.
Compare to the prior year performance the net profit margin decreased by 5.7% from 9.63% to 3.96% a
decrease of 60%. Service charges reflect a decrease of 2.8% against the prior year third quarter. Expenses
however has shown an increase of 2.8% against the third quarter of 2019/20. Net profit shows a 60.2%
decrease compare to the same period last year. The cash position reflects a 28.5% decline against the same
period last year.
Net profit margin % decreased by 10.7% compare to the previous quarter. Service charges shows a decrease
of 2.8% against the previous quarter. Expenses showed a decrease of 1.7% against the previous quarter. Net
profit reflect a 16.2% decrease against the previous quarter. Cash position reflect a positive increase of 5.4%.
Revenue for the third quarter of FY2020/21 amounting to R3 868 million is R132 million less than the third quarter
of the previous year.
On the expenditure front, quarterly expenditure of R3 714 million is R100 million more than the same period
last year which was R3 615 million.
The year to date revenue was less than budget by R821 million as compared to the shortfall of R738 million
for the same period last year.
The total expense for the quarter of R3.7 billion was more than the budget by R20 million as compared to the
overspending of R119 m in the same period in the 2019/20 financial year. The over expenditure is mainly
attributable to the debt impairment and bulk purchases from Kelvin. The increase in the debt impairment is
a cumulative effect of dispensing with the disconnections of non-paying customers during the hard levels of
the Covid-19 pandemic restrictions. The debt collection measures were introduced during the quarter of
which are expected to bear fruits in quarter 4 of this financial year.
City Power Quarter 3 Final Report 13
1.4. Corporate Profile
Overview of the entity
City Power was established in 2000 as an independent
municipal entity, wholly owned by the City of Johannesburg.
The National Energy Regulator of South Africa (NERSA)
granted City Power a license to trade on 19 December 2001.
As at 30 June 2020 City Power has 375 448 customers; ranging
from domestic to commercial and industrial properties.
City Power Johannesburg (SOC) Ltd (City Power) is
accountable for providing electricity services to all its
customers. As the electricity distribution service provider of
the City of Johannesburg, City Power’s core competency is
to purchase, distribute and sell electricity within its
geographical footprint. City Power is not the sole provider of
electricity services for the City. The areas not covered by City
Power (predominantly Soweto and Sandton), are serviced by
Eskom. The COJ map indicates that the areas in blue are
supplied by City Power and the yellow are supplied by Eskom.
The City of Johannesburg, by means of a Service Delivery
Agreement, regulates the service provided by City Power in
respect of financial issues (such as tariffs and capital
expenditure), human resource issues (such as skills
development), delivery targets (maintenance of assets and addressing assets) and standards of
customer care.
City Power is accountable to provide network services to all its customers, which include:
The purchasing, distribution and sale of electricity
Constructing networks
Connecting customers
Repair and maintenance of networks
Installation and maintenance of public lighting.
City Power is currently reviewing its business model, moving towards being an energy company. The drive
for the change is:
Increasing and securing the supply of energy
Acquiring electricity from renewable and alternative sources
Waste to energy
Biogas to energy
Energy efficiency
Reducing greenhouse gas emissions
Strategic use of a mix of technologies and energy sources to achieve goals
The above have to be done whilst:
Reducing the burden of cost on the consumer
Balancing the financial sustainability of the business, delivery of services and Shareholder goals
Moving to the “Smart City” concept via a Smart Grid and integration with other City initiatives
(e.g. transport)
City Power is committed to the City’s long-term aspirations of a resilient, sustainable and live-able
Johannesburg by 2040. The Company contributes to this aspiration through quality service delivery provision
of an electricity network that guarantee sustainable living and by providing enabling support that drives
economic growth. City Power promotes optimal management of the City’s electricity network and
encourages careful consideration for the environment. The Company bases this on a strong commitment to
sound financial management and governance.
City Power Quarter 3 Final Report 14
City Power is well positioned to achieve sound financial management, efficient systems and processes, in
pursuit of sustainable additional revenue streams and capital efficiency. This, City Power, does through
engaging all relevant stakeholders and responding to their needs with a productive workforce. City Power
achieves this while maintaining a functioning electricity network within the City.
1.5. Shareholder Alignment to GDS 2040 and IDP
In order to obtain a closer insight of the environment that City Power operates in, this section explores the
alignment between the entity and its shareholder, the legislative mandate and the entity’s organizational
structure. During the Strategy Refresh, the City Power management and leadership team identified 12
priorities that will ensure the achievement of the 7 strategic objectives. These priorities are the basis for the
programmes and associated initiatives (projects) that will ensure delivery against a shared City Power vision.
Strategic Priorities Priority Programmes City Power Strategic
Objective
City Power Strategic
Priorities
1. Good
Governance
2. Financial
Sustainability
3. Integrated
human
settlement
4. Sustainable
service delivery
5. Job opportunity
and creation
6. Safer City
7. Active and
engaged
citizenry
8. Economic
development
and growth
9. Sustainable
environmental
development
10. Smart City
11. Covid-19
Response
1. Accelerated and visible
service delivery and re-
introduction of co-
production in the delivery
of basic services
2. Improve and strengthen
financial position
3. Impact the housing
market including the
integration, development
and maintenance of
hostels and flats
4. A safer City by
reintroducing ward-based
policing (Joburg 10+) and
effective by-law
enforcement
5. Job opportunities and
creation
6. Development and support
of SMME
7. Community Based
Planning and enhanced
community engagements,
including Mayoral Izimbizo
8. Manage displaced
communities and
homelessness
9. Combat drug, substance
abuse and gender based
violence.
10. Combat corruption,
fraud and
maladministration
11. Combat illegal land
invasion and promote
regulated land use
12. Formalisation of
informal settlements and
rapid land release
1. Improve, stabilise
and sustain a
positive financial
position
2. Establish
City Power’s
own energy
generation
capability and
capacity
to reduce over-
reliance on Eskom
and
Kelvin
3. Strategic
collaborations for
funding and
energy delivery
4. Develop and
Maintain a
Reliable Network
Infrastructure
Asset
5. A technology and
innovation-driven
organisation
6. Sustainability of
the Business
7. A high performing
organisation
through its people
1. Organisational
Performance
Management
2. Alternative Energy -
Diversified Energy Mix
3. Improve Revenue
Management
4. Prioritisation of Capital
Investments
5. Refreshing City Power’s
Business Model
6. Enhanced Customer
Satisfaction/Experience
7. Asset Management
8. ICT Enterprise
Architecture
9. Technology Roadmap
10. Value Chain
Alignment
11. Effective
Leadership and
Enabling Culture
12. Performance
Enablement
(Individual)
Table 1: Shareholder Alignment to GDS 2040 and IDP
City Power Quarter 3 Final Report 15
1.6. City Power Alignment to Batho Pele Principles
The Batho Pele (“People First”) principles are aligned to the Constitution – know the service you’re entitled
to. The Batho Pele principles is a South African political initiative that stands for the better delivery of goods
and services to the public. The Batho Pele initiative aims to enhance the quality and accessibility of
government services by improving efficiency and accountability to the recipients of public goods and
services. Government officials must follow the “Batho Pele” principles which require public servants to be
polite, open and transparent and to deliver good service to the public. The COJ has developed the GDS2040
in line with the Batho Pele principles.
The table below outlines City Power’s response to the eight service delivery principles be implemented:
Batho Pele
Principles
Definition of the Batho Pele Principles City Power Response
1.
Consultation Citizens should be consulted about
the level and quality of the public
services they receive and, wherever
possible, should be given a choice
about the services that are offered.
City Power is accountable to the
community members of the City of
Johannesburg and the employees should
render the services that is due to them
without favour or doubt.
2. Service standards Citizens should be told what level
and quality of public service they will
receive so that they are aware of
what to expect.
COJ through City Power ensure citizens of
the City have access to electricity and
public lighting.
3. Access All citizens should have equal
access to the services to which they
are entitled.
4. Courtesy Citizens should be treated with
courtesy and consideration.
City Power customers are able to raise
any queries through the call centre, the
walking centre and on the website.
5. Information Citizens should be given full
accurate information about the
public services they are entitled to
receive.
Community Engagement is done through
different forums including IDP Outreach
programmes. The organisation also
publishes its repots on its website and
social media. 6. Openness and
transparency
Citizens should be told how national
and provincial departments are run,
how much they cost and who is in
charge.
7. Redress If the promised standard of service is
not delivered, citizens should be
offered an apology, a full
explanation and a speedy and
effective remedy; and when
complaints are made, citizens
should receive a sympathetic,
positive response.
Communities are kept abreast of what
City Power and COJ are doing through
IDP Outreach Programmes and
community forums. The organisation also
publishes its repots on its website and
social media.
8. Value for money Public services should be provided
economically and efficiently in
order to give citizens the best
possible value for money.
The organisation implements NERSA and
shareholder approved tariffs that are
affordable.
Table 2: City Power Alignment to Batho Pele Principles
City Power Quarter 3 Final Report 16
CHAPTER 2: GOVERNANCE
2.1. Board Composition and Key Activities
City Power has a unitary Board, which consists of Executive and Non-Executive Directors. A Special General
Meeting was held on 10 February 2021 at which the following three NEDs were retired from the Board: Mr. W
Mathamela, Ms. K Lehloenya and Mr. M Mello. The following NEDs were retained: Mr. N Kgope, Mr. K
Mthembu, Mr. B Ramokhele, Mr. M Seopela, Mr. K Setzin, Ms. P Thobejane and Prof. B Twala. Six new NEDs
were appointed: Adv. Lindiwe Maseko, Ms Nomvuyiso Batyi, Mr Pumzile Kedama, Mr Errol Magerman, Ms
Thandi Marah and Ms Lerato Mathabathe. Mr. C Lithole and Mr. H Moolla were retained as IACs and Ms. D
Mthimunye was appointed as an IAC Member to the Audit & Risk Committee. During the 2nd Quarter Mr. V
Mokwena, resigned from the Audit & Risk Committee and during the 3rd Quarter Mr. E Magerman resigned
from the Board.
During the quarter under review, the Board was chaired by a Non-Executive Director, Mr. William Mathamela
until his retirement on 10 February 2021. Adv. Lindiwe Maseko was appointed as the new Chairperson of the
Board from 10 February 2021. 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. The Board provides monthly, quarterly, bi-annual
and annual reports on its performance and service delivery to its parent municipality as prescribed in the
SDA, MFMA and the MSA. Such reports are submitted within the stipulated compliance timeframes.
Non-Executive Directors contribute an independent view to matters under consideration and add to the
depth and experience of the Executive Directors sitting on the Board. The roles of Chairperson and CEO 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, subject to MFMA and SCM Regulations being followed. A
director and peer review as well as a Board evaluation are undertaken on an annual basis.
In line with the reviewed CoJ Policy on the Governance of Interim Boards of Directors and of Independent
Audit Committees (Board Governance Policy), which was adopted at the AGM held on 11 March 2020 the
Board has approved and established a Sustainability Sub-Committee. The Board also has the two required
statutory Board Sub-Committees, i.e. the Audit & Risk Committee and Social, Ethics & HR Committee.
Attendance at meetings held during the period under review was as follows:
Directors
Board
Social, Ethics
& HR
Audit & Risk Sustain-
ability
Board
Workshop /
AGM/SGM
Number of Meetings Held
For The Quarter
4 0 1 0 1
Mr. W Mathamela
(Retired : 10 Feb 2021)
2 of 2 - - - 1 of 1
Adv. L Maseko
(Appointed: 10 Feb 2021)
2 of 2 1 of 1 1 of 1
Ms. N Batyi
(Appointed: 10 Feb 2021)
2 of 2 0 1 of 1
Mr. P Kedama
(Appointed: 10 Feb 2021)
2 of 2 1 of 1
Mr. N Kgope 4 of 4 - 1 of 1 1 of 1
Ms. K Lehloenya
(Retired : 10 Feb 2021)
2 of 2 - - 1 of 1
City Power Quarter 3 Final Report 17
Table 3: Board meetings in Quarter 3 – Non Executive Directors & Executive Directors
Independent Audit
Committee Members
Board
Social, Ethics
& HR
Audit & Risk Sustain-
ability
Board
Workshops
Number of Meetings Held
For The Quarter
4 3 2 1 0
Mr. Chris Lithole 1 of 1 - 1 of 1 - 1 of 1
Mr. Haroun Moolla 1 of 1 - 1 of 1 - 1 of 1
Ms. Dudu Mthimunye
(Appointed: 10 Feb 2021)
0 of 0 - 0 of 0 - -
Dates Of Meetings: 18 Jan 2021
22 Jan 2021
26 Feb 2021
24 Feb 2021 10 Feb 2021
Table 4: Board meetings in Quarter 3 – Independent Audit Committee Members
Social, Ethics & Human Resources Committee
The Social, Ethics & Human Resources Committee consist of the following Non-Executive and Executive
Directors:
Khehla Mthembu (Chairperson)
Mandla Seopela
Kenny Setzin
Pulani Thobejane
Nancy Maluleke (A/CEO) (in attendance)
Mfuni Xolo (CFO) (in attendance)
The Committee did not meet during the period under review.
The Social, Ethics & Human Resources Committee advises the Board on:
Remuneration policies, packages and other terms of employment for Senior Management;
Recommendations on matters relating to general staff policy, remuneration, performance bonuses,
performance management, and compliance with relevant legislation and strategic alignment with
the objectives of the Company;
Mr. E Magerman
(Appointed: 10 Feb 2021)
(Resigned: 16 Mar 2021)
2 of 2 1 of 1
Ms T Marah
(Appointed: 10 Feb 2021)
2 of 2 1 of 2
Ms. L Mathabathe
(Appointed: 10 Feb 2021)
2 of 2 1 of 1
Mr. K Mthembu 4 of 4 - 1 of 1
Mr. M Mello
(Retired : 10 Feb 2021)
0 of 2 - - - 0 of 1
Mr. B Ramokhele 4 of 4 - 1 of 1 1 of 1
Mr. M Seopela 4 of 4 - - - 1 of 1
Mr. K. Setzin 4 of 4 - 1 of 1
Ms. P Thobejane 4 of 4 - - 1 of 1
Prof. B Twala 4 of 4 - - 1 of 1
Ms. N Maluleke (A/CEO)
(Acted as CEO from 26 Oct
2020)
3 of 3 - 1 of 1 - 1 of 1
Ms. M Xolo (CFO) 4 of 4 - 1 of 1 - 1 of 1
Dates Of Meetings: 18 Jan 2021
22 Jan 2021
26 Feb 2021
09 Mar 2021
24 Feb 2021 10 Feb 2021
City Power Quarter 3 Final Report 18
The institutionalisation of ethics in the internal structures, systems and processes of the Company;
Ensuring that there is a strong emphasis on the responsibility of the Company towards the
communities in which the company operates, social transformation within the workplace and other
stakeholders; and
The protection of the safety, health and dignity of employees.
Audit and Risk Committee
The Audit and Risk Committee consists of the following Non-Executive Directors and Independent Audit
Committee Members:
Bonolo Ramokhele (Chairperson)
Naledi Kgope
Kabelo Lehloenya (retired: 10 Feb 2021)
Chris Lithole
Haroun Moolla
Dudu Mthimunye (appointed as IAC: 10 Feb 2021)
Nancy Maluleke (A/CEO) (in attendance)
Mfuni Xolo (CFO) (in attendance)
The Committee met once during the period under review.
The role of the Committee is to provide assistance to the Board by:
Reviewing of financial compliance with applicable legislation and the requirements of regulatory
authorities;
Review matters relating to funding, financial accounting, accounting policies, reporting and
disclosures;
Oversee the Internal and External audit policy and functions including the scope, adequacy and
effectiveness of the audit function and audit plans;
Review / approval of the external audit findings, audit resolutions, reports and fees;
Review overall performance of the Company against predetermined objectives;
Review the integrity and quality of enterprise risk management and ensures that risk policies and
strategies are effectively managed;
Advise of technology and information, strategy, policy and investment in line with best practice; and
Review of combined assurance.
Sustainability Committee
The Sustainability Committee consist of the following Non-Executive and Executive Directors:
Naledi Kgope (Chairperson)
Khehla Mthembu
Kenny Setzin
Bonolo Ramokhele
Bheki Twala
Nancy Maluleke (A/CEO)
Mfuni Xolo (CFO)
The Committee did not meet during the period under review.
The Sustainability Committee oversees the development of a new City Power Business Journey which
encompasses the main drivers of shareholder value creation while effectively addressing the long term
sustainability of the Company. The Committee ensures effective implementation of this strategic journey. The
Committee allows a more involved strategic dialogue at Board level and makes it easier to stay ahead of
emerging opportunities, respond quickly to unexpected threats, and make timely strategic decisions. The
primary role and purpose of the Sustainability Committee is to ensure that the Company has a sustainable
strategy that ensures that the Company is correctly positioned to take advantage of growth opportunities
and is able to maintain the Company’s existing footprint.
The main areas that the Committee focus on is providing strategic direction and exercising oversight over
and monitoring performance with regard to:
Financial Sustainability;
City Power Quarter 3 Final Report 19
Responsible Investment;
Industry Innovation;
Sustainable Energy Sourcing; and
Effective Technology and Information management to ensure value creation.
The Committee has mandated the organisation to develop flight plans for the Energy Mix. It has also
recommended PPP funding model for consideration by Council as an alternative way of funding capital
projects envisaged on the Energy Mix. The Committee also mandated the organisation to develop an ICT
strategy.
2.2. Remuneration of Board of Directors
In terms of the provisions of the Remuneration Policy adopted by the Mayoral Committee, Group
Governance is required, at least annually, to make recommendations on the fees payable to the Non-
Executive Directors of the City of Johannesburg’s municipal entities. In line with this requirement, Group
Governance produces a report on the remuneration of Non-Executive Directors and Independent Audit
Committee Members which is in line with the provisions of the Municipal Finance Management Act, 2003
(MFMA) and Municipal Systems Act, 2000 (as amended).
The attendance fees for Non-Executive Directors and Independent Audit Committee Members of City Power
are determined by the Shareholder. The rates applicable for the financial year were determined by the
Mayoral Committee and the resolution was adopted at the AGM held on 11 Mar 2020, effective from 11 Mar
2020, and will remain in force until amended by Group Governance, or the Mayoral Committee, as the case
may be.
Non-Executive Directors’ and Independent Audit Committee Members’ fees are only paid in accordance
with City Power’s approved budget.
Executive Directors
Name Position TOTAL R
Ms. N Maluleke (Acting CEO from 26 Oct 2020) Acting CEO 663
Ms. N Xolo CFO 585
TOTAL 1248
Table 5: Remuneration – Executive Directors
Non-Executive Directors
Name Position TOTAL R'000
Mr. W Mathamela (retired: 10 Feb 2021) Board Member 64
Adv. L Maseko (appointed: 10 Feb 2021) Board Member 56
Ms. N Batyi (appointed: 10 Feb 2021) Board Member 24
Mr. P Kedama (appointed: 10 Feb 2021) Board Member 24
Mr. N Kgope Board Member 70
Ms. K Lehloenya (retired: 10 Feb 2021) Board Member 24
Mr. E Magerman
(appointed: 10 Feb 2021)(resigned: 16 Mar 2021 Board Member 24
Ms. T Marah (appointed: 10 Feb 2021) Board Member 24
Ms. L Mathabathe (appointed: 10 Feb 2021) Board Member 24
Mr. K Mthembu Board Member 82
Mr. M Mello (retired: 10 Feb 2021) Board Member 0
Mr. B Ramokhele Board Member 90
Mr. M Seopela Board Member 64
Mr. K. Setzin Board Member 64
Ms. P Thobejane Board Member 48
Prof. B Twala Board Member 48
City Power Quarter 3 Final Report 20
Name Position TOTAL R'000
TOTAL 730
Table 6: Remuneration – Non-Executive Directors
Independent Audit Committee Members
Name Position TOTAL R'000
Mr. C Lithole
Independent Audit Committee
Member 18
Mr. H Moolla
Independent Audit Committee
Member 18
Ms. D Mthimunye (appointed: 10 Feb 2021
Independent Audit Committee
Member 0
TOTAL 36
Table 7: Remuneration – Independent Audit Committee Members
2.3. High-level Organizational Structure
The organisation structure also serves as very important foundation for organisational effectiveness,
efficiency, uniformity and controls. Therefore, the organisation structure is not an insignificant, isolated or
stand-alone business component that has nothing to do with where the organisation is heading to
strategically. For this reason, the organisation structure should be fit-for-purpose and be deliberately designed
to support the execution and successful achievement of the business strategy.
Diagram 1: City Power High Level Organizational Structure
City Power Quarter 3 Final Report 21
2.4. Risk Management
Summary of Strategic Risks
The strategic risk profile allows Exco and the City Power Audit and Risk Committee to gain an insightful and
holistic bottom-up view of key risks facing the organisation and to take note of the level of effectiveness in
the management of those risks; to increase the likelihood that set targets and approved business plan
objectives are achieved. The strategic risks identified amount to ten (10) in number, dubbed top-10 strategic
risks.
CITY POWER STRATEGIC RISK REGISTER 2020-21
Diagram 2: CITY POWER STRATEGIC RISK REGISTER 2020-21
NO. RISK TITLE Responsible Group % Progress Risk Rating Current Quarter (Q3)
1. Liquidity Risk Finance 77% 5DSevere/
Catastrophic Risk rating
2.Reduction of non technical losses may not be realised, ultimately putting
the financial stability and sustainability of City Power at risk.Metering Services 65% 4D
3. Escalation of theft and vandalism Enterprise Support 56% 5E Very High
4.
Inability to implement refurbishment, asset renewal and expansion due
to inadequate capital budget may lead to poor network performance
and service delivery.
Engineering Services 87% 4B Moderate 3 Low Moderate Moderate High High
5.
Increase in outages and poor technical performance due to network
unavailability and equipment failure results in loss of supply to city
power customers
Engineering Operations 71% 4D Minor 2 Low Low Moderate Moderate Moderate
6.Failure to capitalise on new market opportunities to ensure business
sustainabilityBusiness Sustainability 78% 5C Insignificant 1 Low Low Low Low Low
7. Unethical business practices resulting in fraud and corruption activities HR & Transformation 88% 4D A B C D E
8.Non-compliance to legislation and company policies due to lack of
enforcement on policies and SOP’s Business Sustainability 82% 4B Remote Unlikely Possible Likely
Almost
Certain
10. Cyber Security Enterprise Support 82% 4E
Severe/
Catastrophic
Previous Quarter (Q2)
Very HighRisk Rating
Moderate 3 Low Moderate Moderate High High
Minor 2 Low Low Moderate Moderate Moderate
Insignificant 1 Low Low Low Low Low
A B C D E
Remote Unlikely Possible LikelyAlmost
Certain
High High
Likelihood of occurrence
Major 4
Very High Very High
Major 4 Low Moderate High
Context
This quarterly Enterprise Risk Register is a consolidated view of key risks that City Power
faces in relation to the external and internal environment, and how these are being
managed. Detailed risk treatment plans and implementation progress is highlighted for each
of the risks.
Risks are associated with the achievement of the business objectives in the business plan
and different operational objectives at group level.
The register reflects the position for Quarter 3 of the 2020/21 financial year and progress
made as at 31 March 2021 on the initiatives to enable City Power to achieve its intended
business objectives. This risk register served as input into the Enterprise Risk Management
Report. The two risk heat-maps illustrate the ratings for the risks to compare two quarters. Po
te
ntia
l Im
pa
ct/ C
on
se
qu
en
ce
5 Low
Likelihood of occurrence
Total % progress on Risk Treatments Plans 77%
9.Insufficient capability, capacity and commitment to deliver on the
organisational mandateHR & Transformation 86% 3A
Low Moderate
Low
DOCUMENT : CITY POWER STRATEGIC RISK REGISTER 2020-21
REPORTING PERIOD : QUARTER 3 AS AT 31 MARCH 2021
Moderate High
Po
ten
tia
l Im
pact/
Co
nseq
uen
ce
High
High
5 Moderate
COMPARISON OF RISK MOVEMENT
Very High Very High
1
1
2
2
3
3
4
45
5
6
6
7
7
8
8
9
9
10
10
City Power Quarter 3 Final Report 22
Review of the City Power’s Strategic Risks
Based on the current performance and analysis of the company, City Power is in the process of reviewing
the entire risk profile to align with the changing business model and transition from an electricity distribution
company to an energy company. The current profile is leaning more towards the old business and not so
much the new business. The report represents progress on the current Strategic register as well as indicates
the revised risks which will be formally approved in the fourth quarter.
The key driving factors to review the strategic risks were:
To determine if risks were still relevant to the organisational (internal and external) strategic position
and direction and if they are correctly rated.
To review the emerging risks to determine whether there were additional risks that relate to the
business of the future.
The risk register was reviewed by all the Group Executives through a workshop and extensive engagement
sessions. Next steps include the final review and adoption of the revised risks as well as governance approval
to align with the new business plan and revised business objectives.
Revised risk register
The revised Strategic risk register consist of 10 risks which has been rated and treatment plans have been
included, to finalise the process the respective Group Executives still need to verify and validate and finalise
the risks and treatment plans.
No
Risk Description Risk
Rating
no Risk Description Risk
Rating
1 Challenges to financial viability
5E
VERY
HIGH
6 Weaknesses in internal alignment of
strategic objectives with Annual
Performance Plans (APP’s) and Key
Performance Indicators (KPI’s)
4D
High
2 Legal and Regulatory Non-
Compliance (e.g. loss of license
to operate)
5E
Very
High
7 Lack of critical skills and resources
3D
HIGH
3 Disruptive technologies
4E
VERY
HIGH
8 Heavy reliance on grants, loans and
own funding (i.e. National Treasury)
3E
High
4 Cyber Attacks (data fraud and
data theft)
4D
HIGH
9 Failure to retain current and secure
new customers
4B
Mo
de
rat
e
5 Loss of supply to customers
4D
HIGH
10 Fraud and Corruption
3C
Mo
de
rate
Table 8: Revised Strategic Risk Register
Risk Maturity Assessments
The second exercise supporting the strategic risk review was the risk maturity assessment. The purpose of the
exercise was to assess the maturity level of City Power’s Risk Program.
The assessment was completed with the Group Executives, the Business Performance Managers and other
key individuals that were identified across the organisation using 10 key elements, however the focus was
mainly on the core processes.
City Power Quarter 3 Final Report 23
Two Key Inputs were used to for the assessment:
Questionnaires;
One on one Interviews sessions with Exco Members
The diagram below, displays the 10 Key Elements used for the Assessment:
Diagram 4: Risk Maturity Assessment Methodology
Outcome of the Risk Maturity Assessment
A scoring matrix was used to evaluate each of the 10 elements. The respondents selected the most
applicable rating for each element. The evaluations were aggregated to determine the risk maturity
assessment of the Risk management program.
The diagram below displays the summary of the risk maturity assessment feedback.
Diagram 5: Summary of Risk Maturity Assessment Outcome
The maturity assessments results continue to be a pivotal role in driving and improving the Enterprise Risk
Management culture as well as assist in implementing and maintaining the enterprise-wide risk management
principles and practices that will ensure business sustainably and resilience programme.
City Power Quarter 3 Final Report 24
Risk Movement
The following section highlights some of the factors which have influenced the rating of the risks and
consequently the movement.
Possible Covid-19 3rd Wave
The looming third wave of Covid-19 would negatively impact revenue as more customers may be affected.
If there are further lockdown restricitions there is delayed impact on some of our revenue recovery initiatives.
In addition, the recent downgrading of the South Africa’s sovereign credit by rating agencies has
exacerbated the job losses and loss of income.
The following are possible consequences of a 3rd Wave to City Power:
Declining revenue as a result of more customers losing their jobs leading to unaffordability of our
services
Increase in theft and vandalism of infrastructure
Possible loss of life of employees due to Covid-19 related deaths
Low productivity as a result unavailability of employees
The rise of employees working from home, thus more tools of trade should be procured
With more people working from home there would be a decline in Large Power User consumption
which results in less revenue
Eskom’s Load shedding
Eskom’s announcement that load shedding is to persist for the next five years has a direct impact on the
financial and liquidity position of City Power. As our mandate is to provide reliable power supply to enable
customer retention and revenue collection, the business requires resilient contingency measures to
proactively manage persistent power outages which aggravate consumer confidence in our services. In
addition, the load shedding may stimulate the acceleration of Large Power Users to consider other
alternative power options in an effort to protect their business sustainability. Over and above load shedding,
the cost of electricity tariff hikes to be effected by Eskom also pose a threat to the customer retention and
financial sustainability of City Power.
Eskom’s announcement of the persistent load shedding for the next five years has the following bearing
implications on City Power:
Increased theft and vandalism of infrastructure
Low-consumer confidence in reliable power supply by City Power
Prolonged/extended power outages due to ageing infrastructure
Increase in Liability insurance claims as a result of power surges
Reduction of revenue collection
High consumption of high value material (transformers, switches and circuit breakers) in pursuit of
power restorations
During quarter 3, there has been a surge in power outages and poor technical performance. The effects of
load shedding on an already City Power ageing fleet as a result of required frequent switching leads to
breaker failures as the surges and voltage spikes cause technical equipment damage. In addition,
prolonged/extended power outages are experienced which severely affect both the financial and
operational performance. City Power’s operational staff are overstretched and always on standby to deal
with the restoration of power and after-effects of load shedding.
For the quarter the risk rating for power outages and poor technical performance as a result of network
availability remains high and might just worsen due to the following:
Eskom’s announcement that load shedding is to persist for the next five years
Ageing infrastructure which cannot withstand the frequent switching leading to extended power
outages
Non-attainment of Power Restoration KPI as a result of load shedding
Increased theft and vandalism
City Power Quarter 3 Final Report 25
Operating errors as a contributing factor to loss of supply and revenue
Operating errors are estimated at 88% and a major example for the quarter is described below.
On the 29 March 2021 in the afternoon at around 12pm City Power experienced an unplanned power
interruption at Prospect and Sebenza as a result of a fault that happened on a 275kv (kilovolts) feeder line.
The Prospect and Sebenza line affects several major sub-stations as result the north east, inner city and south
of Johannesburg areas we plunged into temporary darkness for several hours. The root cause analysis
conducted established that City Power and Eskom protection operations teams committed a technical
operating error resulting in tampering with the 275kv breakers at prospect substation, which resulted in
multiplier effect power trip at Sebenza substation.
The network health was not severely compromised, however the restoration KPI was negatively impacted. In
addition, the following factors affected the restoration turnaround:
Work shifts as there were no available operators on standby
Tedious power restoration sequencing system
The power restoration turnaround time for all areas supplied from Prospect Substation was 3 hours. However,
all the areas supplied from Sebenza were restored within 4 hours. This means operating errors will be added
as a root cause to the loss of supply risk and monitored as an indicator. A reduction in operating errors will
improve both technical and safety performance.
Effectiveness of the previously implemented risk mitigation plans.
The effectiveness of the treatment plans and risk movement is dependent on the following factors:
Some treatment plans have been put in place however, require funding for implementation and
the lack of funding resulted in non-movement of the risks, it is important to highlight these
treatment plans as failure to record them might result in attention shift. The examples are
included below:
Energy mix initiatives are not covered in the current budget pending finalisation of the
implementation plan.
Purchase and implement certificate for digital signature (authenticate and checks for unknown
files and their behaviour in order to block when necessary)
Replacement / upgrade of legacy systems with an up to date support system
Upgrade the network to address OT requirements and IT requirements with newer technology
Implementation of the comprehensive security plan within Security Risk Management
SCADA response strategy includes the following activities: To request Capital funding for the roll
out of Optic fibre, Remote Terminal Unit and Multiplexer– will be able to have visibility at all the
substations (a full business case will be developed to motivate for the rollout as this will also
enhance our response capabilities)
Risk survey recommendations have not been adequately provisioned due to budgetary
constraints
Business Continuity Management
The Business Continuity Management (BCM) status report focusses on ERM initiatives / activities that aim to
facilitate the implementation and embedding of the Business Continuity Management System (BCMS) within
City Power. This aims to ensure that City Power as an essential service provider is resilient, prepared and able
to respond to any emergencies or disasters that will initiate for an invocation of a Business Continuity Plan
(BCP).
As part of the Business Continuity Management Cycle one of the requirements is for an organisation to
conduct Business Impact Assessment (BIA) to assist the business to determine which processes/functions are
critical and require priority during business disruptions. The exercise was rolled-out companywide with the
support of ERCC members and different Group Executives to ensure that City Power not only completes the
exercise but also aligns to required legislation.
City Power Quarter 3 Final Report 26
All Business Impact Assessments have been concluded and signed off by the relevant Group Executives, this
has been a lengthy process and required for the groups to identify and highlight the different critical
processes using the matrix below.
KEY ASSESSMENT OF
CRITICAL PROCESSES
PROCESS DESCRIPTION IMPACT
No tolerance time (0 hours) to 4 hrs Catastrophic Impact
5-12 hours Critical Impact
2-3 days High Impact
5-7 Days Medium Impact
> 7 Days but less than a Month Minor Impact
> 1 Month Low Impact
Table 9: Key Assessment of Critical Processes
Proposed Timelines for the finalisation of the BCPs
The BIA’s serve as input to the overall business continuity plans for the groups, the process and time taken to
complete BIA exercise has been critical in proposing the timelines for the Business Continuity Plans (BCP’s)
finalisation.
The table below displays proposed timelines for the finalisation of the BCP’s:
Activity Date
Finalisation of approach to be adopted 9th April 2021
Workshop on the update of the BCPs to ERCC and BPMs 14th April 2021
Updates of BCPs by Groups 21th April 2021
Review of Updating BCPs 30 April 2021
Finalisation of BCPs 7th May 2021
Table 10: Proposed timelines for the finalisation of the BCP’s.
Risk Finance / Insurance
The Risk Finance program is mainly split into the Assets and Liability portfolios. Different non-motor insurance
policies under these two portfolios form part of a blanket cover wherein the City of Johannesburg and its
Municipal Owned Entities (MOE’s) are insured.
The current lead underwriter is Hollard Insurance Company with 70% followed by the Insurance Underwriting
Managers with 30% on the Assets All Risks Portfolio. On the liability portfolio our current lead is AIG. (American
International Group).
Both the Assets and Liability portfolios are currently managed by our broker African Dawn Risk Solutions PTY
Ltd.
Summary of the Asset Claims Performance in Quarter 3
A total of 65 asset claims were reported during Quarter 3, this brings the total of reported claims to 238 claims
YTD. The estimated loss value of the reported asset claims for the period under review is R8.87m. Our estimate
for all reported claims YTD is at R57m. In January 2021, zero claims were registered with our brokers due to
that the submissions did not meet the claims requirements. The robust quality assurance exercise is part of
Management’s commitment to ensure that the internal audit findings raised are being addressed.
Theft of cables contributed to 64.6% of all submitted claims during this quarter.
City Power Quarter 3 Final Report 27
The graph below provides a quarterly count with the cost and number of asset claims – (Q3)
Graph 1: Number and Cost of Asset Claims (Quarter 3)
Two major incidents were reported during the quarter, one from Roodepoort Depot and one from Siemert
Road.
A transformer burnt due to a fault in the MVC at Diagonal Street, JHB CDB. The estimated repair cost
has been raised as R3m. The claim has been registered with our broker, however, the actual cost
and the cause analysis report remain outstanding.
Heavy rains caused a leak at the Eikenhof Substation. The water entered through the top
Johannesburg Prison Circuit, this caused the breaker to explode and tripped the Feeder board. The
repairs are estimated at R1.2m and the claim is currently under investigation with the broker.
The incidents are an indication of the health of our plant, which directly impacts our risk profile and insurability.
Outstanding asset claims cost for Quarter 3
The total number of costs sent to the brokers for payment in Quarter 3 is R1.3m. The actual cost submitted
year to date (Jul 2020 – Mar 2021) amounts to R19.8m. Payment of R13.4m were received from the broker
during this quarter. R3.4m of the amount paid related to claims submitted during the current financial year,
while R10m was for a claim that occurred during the 2016/2017 financial year.
The following provides a cause and cost analysis for Public Liability Claims (Quarter 3)
Graph 2: Public Liability Claims (Quarter 3)
-
22
43
65
-
6.28 2.59 8.87
-
10
20
30
40
50
60
70
Jan Feb Mar Total
Cost and number of Asset Claims - Q3
Number of claims Amount -'000
-
10
20
30
40
50
60
PowerOutages
Power Surges Other AccidentalDamage
LoadShedding
Total
13
35
2 2 2
54
0.026 0.888 0.025 0.0… 0.267 1.62
Public Liability Claims performance - Cause and Cost analysis
Number of claims Amount '000
City Power Quarter 3 Final Report 28
Above causal breakdown attests to problems linked to the network reliability risk and plant condition. For this
quarter 54 (fifty –four) public liability claims were reported with an estimate of R1.62m claimed by third parties
for various incidents.
The amount of 54 claims is a significant decrease to the number of claims reported during Q3 in 2020. Last
year we received 90 claims during the same period. The decline in the number of reported claims could be
as a result of the improved performance of our network.
Outstanding technical reports Year to date:
For the period Jul 2020 - Mar 2021 a total number of 199 claims were registered with our broker and 24
technical reports are outstanding across all depots, this equates to 12% of all submitted claims. The low
percentage of outstanding technical reports is a result of the Insurance team’s robust communication plan
and continuous engagement with the relevant stakeholders.
The total estimate raised with the broker year to date is R11.3m, payments made to third parties through
settlement agreements amounted to R460k. An amount of R253k was also paid over to loss adjusters and
attorneys during this period from our Aggregate.
Majority of the claims submitted year to date are caused by power surges (67.8%), leading to damage to
customers’ appliances and other equipment. These are mainly caused by an influx of electricity into
households and businesses. Substantial amounts are often claimed by businesses.
Group Personal Accident
Two employee injuries were reported during Quarter 3.
Employee was bitten by her dog at home in Northcliff and sustained serious injuries to her right hand.
Employee sustained an injury to his hand during an explosion while connecting lights at Cleveland
Substation.
Delays in payment of Asset Claims
Payment of asset claims remains a challenge due to various factors within the claims value chain which are:
Outstanding contractor’s invoices;
Lack of effective support to Loss Adjusters to finalize the claims
Lack of funds from CoJ and the broker
During Q3 the broker paid 30 asset claims amounting to R3.4m.
Summary of outstanding claims for the period July 2017 – 31 Mar 2021
Table 11: Summary of outstanding claims
Insurance Year Total number of claims
closed due to non
submission of cost or
duplicate claims
registered with the
broker
Total amount loss in Rands
by City Power due closed
claims
No of claims where
actual cost remains
outstanding from City
Power Depots
Total amount not claimed
from broker due to non
submission of actual cost
No of claims
where feedback
is awaited from
broker
Total Amount
claimed by City
Power and
outstanding from the
broker
No of Agreement
of Losses/ Cost
sent to broker
Total Amount of
outstanding
payments from
Broker
2017-2018 53 19,395,070.00 15 10,916,561.32 1 22,000,000.00 72 14,002,595.54
2018-2019 46 9,068,902.22 13 1,248,000.00 - - 175 38,169,299.30
2019-2020 12 1,117,503.24 87 43,913,982.86 - - 190 38,690,806.03
2020-2021 - - 104 30,231,720.02 - - 104 16,869,387.88
Totals 111 29,581,475.46 219 86,310,264.20 1 22,000,000.00 541 107,732,088.75
City Power Quarter 3 Final Report 29
Request for Cyber Risk Insurance Cover
A request for quotation has been communicated to the City of Johannesburg Group Risk and Assurance
Service (GRAS) following the Audit and Risk Committee request for City Power to ensure that this cover be
taken to transfer the risk. In a letter dated 3 March 2021 our lead underwriter Hollard confirmed that the
reinsurance markets have been approached for Cyber Insurance cover and their response is awaited. Once
confirmed the insurance team will provide Management with feedback.
Emerging risks identified during the quarter under reporting
Three emerging risks have been identified and are highlighted in table 8 above under the revised strategic
risks.
The risks are named as follows and will be reported on in the fourth quarter subject to EXCO and Board
approval:
1. Disruptive technologies
2. Weaknesses in internal alignment of strategic objectives with Annual Performance Plans (APP’s) and Key
Performance Indicators (KPI’s)
3. Heavy reliance on grants, loans and own funding (i.e. National Treasury)
External factors affecting risks mitigation
Interdepartmental and intergovernmental dependencies
Financial constraints
Recent COVID-19 pandemic restrictions
Any other external factors outside your control
Theft and Vandalism
Community unrest sometimes impacts our ability to effect restoration
COVID-19 restrictions and implications
Eskom load shedding
Illegal connections affecting business operations of customers in an industrial area
City Power Quarter 3 Final Report 30
Risk Registers
City Wide Strategic Risks
Risk
Ref
Risk Residual
Risk
Rating
KPI linked to the risk City Power
KPI inked to
Risk
Risk
Achievement
Action to improve
management of risk
Due date Progress on each action item
as at end of the quarter
Q2
1 Governanc
e Failures
H 1. Percentage of
Auditor General
findings resolved
2. Audit opinion
3. Percentage of
fraud & corruption
investigations
resolved
4. Percentage
achievement of the
Citywide Service
Standards Charter
5. Percentage
completion of skills
audit for employees
AGSA Audit
Opinion 1.1. Promote
compliance through
awareness sessions
1.2. Monitor compliance
universe
Quarterly
1.1. Raised awareness for the
following groups: Human and
Transformation Group
1.2. Conducted monitoring
compliance for the following
groups:
Human and Transformation
Group. Conducted various
follow ups on previous
compliance findings with
respective groups
1.3 Assess the overall
systems of internal
controls for adequacy
and effectiveness
Ongoing
(Monitor as
per the
Audit Plan)
1.3 Ongoing audit reviews,
follow-ups and monitoring as
per the Combined
Assurance Plan.
1.4 Implement GFIS and
Audit recommendations
Ongoing 1.4 12 cases of 14/15
Financial year have been
finalised by GFIS, no irregular
expenditure found. As a
result, they need to be
condoned.
Internal Audit appointed
Service Providers in March to
assist with the IFW
investigations for 18/19 Fin
year. Work for the period has
been finalized pending
decision by Exco.
City Power Quarter 3 Final Report 31
Risk
Ref
Risk Residual
Risk
Rating
KPI linked to the risk City Power
KPI inked to
Risk
Risk
Achievement
Action to improve
management of risk
Due date Progress on each action item
as at end of the quarter
Q2
2 Financial
Instability
H 1. Number of
profitability and
liquidity ratios
achieved
2. Percentage
collection of
revenue in respect
to service billings
3. Percentage of
budget spent on
City-wide
infrastructure
4. Percentage
reduction in UIFW
expenditure
Percentage
Gross Margin
1.1. Compilation of
Service Level
Agreements that are
relevant to each
business.
1.2. Strict enforcement
of Service Level
Agreements with
penalties for non-
performance
1.3. Monitoring of the
Contract periods
1.4. Implementation of
the Contract
Management
Framework and Policy
30 June
2021
1.2 SLA’s are included as part
of the contracts i.e.: in labour
and ICT contracts there is
specific performance criteria
on how they need to
perform. Non-performance is
handled as part of all
contracts where penalties
are included for non-
performance and is guided
by a standard process and
clauses.
1.3 Currently Contract Status
reports, indicating validity of
contracts, time remaining
and values are distributed
monthly to the business, and
is also included in the
monthly CFO report, tabled
at EXCO. Discussions to be
had with ICT on the
development of contractor
management Dashboards,
to track contracts
expenditure and dates
(validity of contracts)
4 Inability to
meet
Service
Delivery
Standards
H 1. Initiatives
rendered to people
living on street to
restore their dignity
and integration in
society through
different
interventions 30
2. Percentage of
budget spent on
Percentage
Achievement
of Service
Level
Standards
1.1. Adequately
capacitate Department
with requisite financial
and human resources.
1.2. Implementation of
Capex projects
1.3. Implementation of
Maintenance
programme
Quarterly 1.1. No recruitment took
place during quarter 3. Due
to budget constraints as the
process involves external
recruitments as well as
internal promotions.
Engagements have taken
place with relevant
stakeholders to evaluate
available options
City Power Quarter 3 Final Report 32
Risk
Ref
Risk Residual
Risk
Rating
KPI linked to the risk City Power
KPI inked to
Risk
Risk
Achievement
Action to improve
management of risk
Due date Progress on each action item
as at end of the quarter
Q2
City-wide
infrastructure
3. Percentage of
spend on repairs
and maintenance
to Property, Plant
and Equipment
4. Percentage of
municipal skills
development levy
recovered
5. Percentage of
investigated cases
resolved
1.4. Update Urban
decay assessment for
the identified areas, with
high demand for
service.
1.5. Implementation of
the PMS policy
1.6. Implementation of
the Group Contract
Management
Framework.
1.7. Develop Project
Tracking Tool and site
visit inspections
1.8. Monitor and report
on expenditure
1.9. Implementation of
Maintenance
programme
1.2 Capex expenditure to-
date is 36%
1.3. Ongoing maintenance is
conducted as per the
maintenance programme.
9 Failure to
keep
abreast
with
technologic
al
advanceme
nts and
trends
Increasing
Safety and
Security
Incidents
H 1.% SAP Business
transformation
project
2. % ICTS
infrastructure
upgraded and
refreshed
3. Number of
participants in the
e-learning
programmes in the
libraries
4. Number of Wi-Fi
Hotspots rolled out
across the City
Percentage
protection
against cyber
attack
1. Implementation of
SAP business
transformation as per
project plan for 2020/21
Quarterly SAP Blueprint has been
signed off.
City Power Quarter 3 Final Report 33
Risk
Ref
Risk Residual
Risk
Rating
KPI linked to the risk City Power
KPI inked to
Risk
Risk
Achievement
Action to improve
management of risk
Due date Progress on each action item
as at end of the quarter
Q2
11 Non-
Compliance
to
regulatory
requirement
s
H 1. Percentage
reduction in
unauthorized,
irregular, fruitless
and wasteful (UIFW)
expenditure
Percentage
Compliance
with relevant
legislation
and policy
prescripts
1.1. Implementation of
financial misconduct
procedures and timely
consequence
management.
1.2 Monitoring of the
implementation of
action plans and
controls to improve
expenditure
declarations
Quarterly IFW Register send monthly for
investigation by Internal
Audit.
Internal Audit has appointed
2 Service to assist with the
IFW investigations for 18/19
Fin year.
A total of 30 cases have
been investigated for the
18/19 Financial year - with
each service provider
attending to 15 cases each.
The investigations for all 30
cases have been concluded
and next Steps which follow
are:
The report to be taken to
EXCO and Board for
approval.
After above approvals
report to be taken to
MPAC and lastly
Report to be taken to
Council for final
approval.
12 Inability to
respond to
city disasters
and
business
disruptions
H 1. No of clinics that
provides COVID 19
testing sites 33
across all the
regions
4. No of clinics that
provides COVID 19
testing sites33
Percentage
of the
strategic risks
managemen
t action plans
implemented
1.1. Development of
Business Continuity Plans
(for the targeted
depts./MEs
1.2. Conduct
evacuation drills for all
city facilities
1.3. Training of Disaster
management
30 June
2021
The exercise to enhance the
business continuity plans is
underway, as the business
has finalised and signed-off
the business impact
assessments (BIA). In
addition, the business
continuity plans exercise will
focus on continuity response
City Power Quarter 3 Final Report 34
Risk
Ref
Risk Residual
Risk
Rating
KPI linked to the risk City Power
KPI inked to
Risk
Risk
Achievement
Action to improve
management of risk
Due date Progress on each action item
as at end of the quarter
Q2
across all the
regions
5. Number of
Temporary
Reallocation Units
constructed in high
risk areas
6. Number of food
insecure households
assessed and linked
to food bank
champions and incident
management teams
1.4. Monitor the
implementation of the
National Disaster
Management Centre
COVID-19 Seven Point
Focus Plan, and report
to JOCs and other
relevant committees
strategy with regards to
prioritization od identified
critical processes as per the
BIA.
Table 12: City Wide Strategic Risks
Strategic Risks (Top 5 strategic risks based on residual risk rating)
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
1
City Power
may have
insufficient
funds to meet
its financial
obligations in
the short term
as a result of
revenue
decline and
cash flow
which may
compromise
planned
business
operations,
delivery of the
VH
Percentage Gross
Margin
1. Meter to Cash
Value Chain
initiative to
ensure that all
customers are
billed, that they
are billed
accurately and
that we collect.
Monthly R13,4 has been recovered for the quarter as
at the 19th March 2021. The YTD actual
recovery is at R 26.6m
2. Restructuring
of debts
(convert short
term debt to
equity)
Quarterl
y
The Debt Restructuring proposal was
submitted to CoJ Treasury on the 6 June
2020. Treasury responded to City Power on 4
September 2020. City Power (CP) provided
further information to CoJ Treasury on 18
September 2020. Necessary protocols are
being followed by CP in light of the Treasury
response. The consulting company
City Power Quarter 3 Final Report 35
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
mandate and
financial
sustainability
appointed to assist with the turnaround
initiative of CP has also been requested to
focus on this matter.
3. Finance in
association with
Data
Governance to
embark on a
data definition
exercise using
IoT techniques
to give the
business an
absolute pulse in
real-time.
Ongoing Data definition exercise is currently on hold
due to turnaround initiative.
4. Conduct
Mock Billing
Initiatives to
Verify Eskom
Invoices for both
historic and
current invoices
Ongoing
(Monthly
)
35,307 read vs. 38,456 Download
2 Cyber security
threats due to
high exposure
of the
vulnerable
city power
network as a
result of under
investment
VH Percentage
Protection Against
Cyber Attack
1. Upgrade the
network to
address
Operational
Technology (OT)
requirements
and IT
requirements
with newer
technology. -
Procurement
and installation
Ongoing
Currently not on 20/21 procurement plan.
It was on Demand plan however there was
no funding made available on CAPEX for
this project. ICT will look at reprioritizing this
project compared to other priorities.
All 19 procured cabinets have been
mounted and 63 switches installed. The
project is not yet completed because ICT
could not replace switches in some areas
within main building and E1 Block due to
those areas requiring different switches to
what was purchased.
City Power Quarter 3 Final Report 36
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
of new network
switches
2. Replacement
or upgrade of
legacy systems
with an up to
date support
system. Develop
a strategy to
remove or
disable
unnecessary
functionality
from systems
Ongoing ICT has applications running old operating
systems and applications running on servers
(Legacy systems) which cannot be
patched and no longer supported. These
require budget to appoint strategic partners
to upgrade the applications, which is not
available this financial year. Operating
Systems upgrade don’t require budget, it
will be done internally by ICT resources, only
applications upgrade require budget.
3. Review risk
based policies
and procedures
that support
mobile working
or remote
access to
systems that are
relevant to users
Ongoing
ICT strategy is currently under review by an
independent partner.
4. Awareness
campaigns:
users on the
secure use of
their mobile
devices in the
environments
they are likely to
be working in.
Monthly
Ongoing Awareness campaigns: focusing
on internal communication via SharePoint,
CP Everyone communication mail and
Notice boards. Group policy deployment is
currently being tested on the ICT staff
machines with an intention to roll it out to
the entire business.
Depot awareness and classroom training
has been deferred due to the COVID 19
lockdown pronouncements by the
president.
City Power Quarter 3 Final Report 37
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
3 Escalation of
theft and
vandalism
VH Percentage
reduction in Non-
Technical Losses
1. Conduct risk
assessments &
inspections to
identify
vulnerabilities on
protective
security barriers
Ongoing
Security condition assessment was
conducted for All Bulk Intake and Major
substations. Reports reflecting security
vulnerabilities currently in compilation stage
2. Roll-out
automated
security systems
based on
resource
allocation
June
2021
Roll out of Integrated Security Systems at
Randbrug Depot and Westfield substations
in progress - completion date 31 June 2021
3. Develop
procedural
security for
various critical
network
infrastructure
June
2021
Draft Standing Operations Procedures for
substations compiled and will be
implemented during Q4
4. Apply for
National Key
Point
classifications for
Bulk Intake
substations and
inner-city
underground
tunnels
June
2021
2 x Application forms for declaration of bulk
intake substations as National Key Point
declaration finalized
5. Formulate
and implement
security
deployment
plan for critical
network
April
2021
New tender advertised for provision of
armed security officers
Bid evaluation commenced and will finish in
Q3
City Power Quarter 3 Final Report 38
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
infrastructure
Develop and
implement
effective guard
force
management
plan
June
2021
6. Develop
community-
based crime
prevention
initiatives
Formulate and
implement
Memorandum
of
Understandings
with various
stakeholders to
protect
electricity
network
June
2021
June
2021
Evaluation of bid for provision of armed
security service completed. Pending probity
audit and submission to BAC.
7. Develop and
roll out
intelligence &
investigate plan
to mitigate risk of
cable theft,
vandalism and
illegal
connection
March
2021
Ongoing
One prosecutorial-driven operation
conducted where crime information on
tampering with essential infrastructure by
customer owing R3m was collected.
Currently liaising with SAPS to prefer criminal
charges. Strategic Planning meeting held
with SAPS and NPA to implement
prosecutorial driven security operations to
curb illegal connect and prefer criminal
charges. Next meeting ion Q4 to finalize
plan. SAPS Douglasdale SAPS requested to
City Power Quarter 3 Final Report 39
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
Create effective
collaboration
with law
enforcement
agency to
improve
prosecution and
conviction of
perpetrators
conduct SAPS Intelligence Assessment and
Analysis at Kya Sands informal settlement
regarding illegal connections
8. Improve ID
cards
production,
reconciliation
and recovery
process
Formulate plan
to integrate ID
cards with
various systems
and processes,
e.g. Forcelink
enrolments,
network keys
processes and
contracts
management.
Create security
monitoring
capacity
Ongoing
June
2021
June
2021
R782 new ID Cards produced for
contractors and R233 700.00 was collected
for lost/ misplaced ID Cards. Contractors ID
Cards with permission to collect material
integrated to SAP system and monitored
and updated on monthly basis
4 Reduction of
non-technical
losses may not
be realised,
ultimately
H Percentage
reduction in Non-
Technical Losses
1. Meter to Cash
Value Chain
initiative to
ensure that all
customers are
Monthly
R13,4 has been recovered for the quarter as at
the 19th March 2021. The YTD actual recovery is
at R 26.6m
City Power Quarter 3 Final Report 40
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
putting the
financial
stability and
sustainability
of City Power
at risk
billed, that they
are billed
accurately and
that we collect.
2. Accurate
billing of LPU
customers
2.1. Technical
Audit of 6500
Large Power
Users
Quarterl
y
451 audits completed to date against the target
of 2000. Resources are being ramped up to
improve on the performance.
3. Execute
missing billing
orders by
providing
readings for
missing orders
while engaging
with RSSC to
investigate the
reasons and
upload to - RSSC
for billing.
Quarterl
y
19 resolved out of 23. the outstanding 4 ( 3 sent
for site investigation and 1 sent to CoJ for
invoicing)
4. Disconnect
non-vending
pre-paid meters.
Quarterl
y
649 resolved out of 1,056. The variance of 407
will be a priority for the next quarter
5. Smart meter
roll out of pre-
paid meters
Quarterl
y
35 out of 154 has been converted. Field
exceptions are 38 and the outstanding of 81 will
be a priority for the next quarter.
5 Inability to
implement
refurbishment,
asset renewal
and
M 1. Number of
Substations
upgraded /
developed
1. Refurbishment
of obsolete
equipment or
major parts
thereof
Complet
e
Replacement of obsolete equipment (Power
transformers) has been finalised. A three-year
plan has been approved and continuation of
previous financial year projects commenced in
September quarter 1. Projects in respect of new
City Power Quarter 3 Final Report 41
Risk Ref Risk
Description
Residual
Risk
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management of
risk
Due
date
Progress on each action item as at end of the
quarter
Q2
expansion
due to
inadequate
capital
budget may
lead to poor
network
performance
and service
delivery
2. Percentage
spent on repairs
and
maintenance to
property, plant
and equipment
3. Percentage of
Planned
Maintenance
performed
power transformers commenced in quarter 2,
Capex expenditure to-date is 21%.
2. Failed
equipment is
recycled as a
source of spares.
Training and
awareness of
the rotable
process.
Ongoing Training for Reuven Depot and Capital Project
Management Office still to be done. Due to
lockdown restrictions, training has since been
put on hold.
3. Technology to
develop
specifications for
Security Systems
February
2021
The specification for design of locks was
amended to eliminate the human intervention
during commissioning as far as possible. The
success of the technology lies also with the
communication platform being reliable as well
as the response on alarms. Operations has to
ensure that relevant employees and contractors
obtain access in order to ensure traceability
and accountability
Table 13: Strategic Risks
Operational Risks (Top 5 Operational risks based on residual risk rating)
City Power Quarter 3 Final Report 42
Risk
Ref
Risk Residual
Risk Rating
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management
of risk
Due date Progress on each action item as at end of the
quarter
Q2
1 Failure to
prevent Irregular,
Fruitless &
Wasteful
Expenditure as
required by
MFMA
H Percentage
Reduction in
unauthorized,
irregular, fruitless
and wasteful (UIFW)
expenditure
incurred citywide.
1. Develop a
register to
monitor
irregular
expenditure on
a quarterly
basis
Quarterly
Ongoing awareness on the importance of IFW
expenditure
2.
Implementation
of
Consequence
Management
together with
GFIS for failure
to comply with
company
regulations,
policies and
processes.
Ongoing
12 cases of 14/15 Financial year have been
finalised by GFIS, no irregular expenditure
found. As a result, they need to be condoned.
Internal Audit appointed Service Providers
in March to assist with the IFW
investigations for 18/19 Fin year. Work has
commenced. Currently we have in total
up to end June 2020 a total of 73 Irregular
expenditure. A total of 43 has been
investigated and 23 has been condoned.
3. Price
intelligent
programme to
derive value for
money on
goods and
services
procured.
Monthly
A new framework is being developed to assist
the determine value for money on goods and
services procured from service providers, this is
in efforts to measure value proposition.
4. Identify cost
drivers where
efficiencies can
be derived
Quarterly Costs drivers have been identified and
communicated with the executives and other
levels of management.
City Power Quarter 3 Final Report 43
Risk
Ref
Risk Residual
Risk Rating
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management
of risk
Due date Progress on each action item as at end of the
quarter
Q2
Monthly OPEX reports identifies the cost drives
of each department. Monthly Reports are
presented at various GMC’s.
2 Inadequate
business
continuity
management
programme
leading to
significant
reputation
damage, legal
action and
financial losses
H Percentage of the
strategic risks
management
action plans
implemented
1. Establishment
of Tactical
Command
Committee
(TCC's) for
various groups
March
2022
Various groups internally have made
submissions of TCC’s nominees for their
respective groups. In addition, the process of
drafting Terms of Reference for the Tactical
Command Committee is in progress.
2. Explore
opportunities
for
capacitating
the Business
Continuity
structure
Ongoing Discussions held with the CFO on motivating for
filling the vacant position of the Business
Continuity Specialist.
3. Finalisation of
Group's Business
Continuity Plans
May 2021
The exercise and enhance the business
continuity plans is underway, as the business
has finalised and signed the business impact
assessment (BIA). In addition, the BCP exercise
will focus on the continuity response strategy
with regards to prioritization of identified
critical processes during unanticipated and
anticipated disruptions
4. Develop a
schedule for
testing of plans
June 2022 As per the BCM lifecycle the testing exercise
and simulations of the effectiveness and
readiness and resilience of the organisation is
conducted after the approval of the business
continuity plans. As this forms part of building
and embedding a BCM culture across City
City Power Quarter 3 Final Report 44
Risk
Ref
Risk Residual
Risk Rating
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management
of risk
Due date Progress on each action item as at end of the
quarter
Q2
Power. This will commence once the BCP's
have been finalised and approved.
3 Overloaded
network
H
3.1 Installation
of vandal proof
protective
structures
Ongoing 3.1 The vandal proof protective structures are
installed to combat illegal connections
3.2
Electrification of
informal
settlements
Ongoing 3.2 Proclaimed areas are identified as the
programme is complex, a range of factors
needs to be considered before the
programme is approved.
3.3 Deployment
security
personnel in
hotspots areas
Ongoing 3.3 The security patrols are conducted on
regular basis in efforts to combat the spread of
illegal connection
4 Escalation of
theft and
vandalism
VH Percentage
reduction in Non-
Technical Losses
1. Conduct risk
assessments &
inspections to
identify
vulnerabilities
on protective
security barriers
Ongoing Security condition assessment was conducted
for All Bulk Intake and Major substations.
Reports reflecting security vulnerabilities
currently in compilation stage
2. Roll-out
automated
security systems
based on
resource
allocation
June 2021
Roll out of Integrated Security Systems at
Randbrug Depot and Westfield substations in
progress - completion date 31 June 2021
City Power Quarter 3 Final Report 45
Risk
Ref
Risk Residual
Risk Rating
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management
of risk
Due date Progress on each action item as at end of the
quarter
Q2
3. Develop
procedural
security for
various critical
network
infrastructure
June 2021
Draft Standing Operations Procedures for
substations compiled and will be implemented
during Q4
4. Apply for
National Key
Point
classifications
for Bulk Intake
substations and
inner-city
underground
tunnels
June 2021
2 x Application forms for declaration of bulk
intake substations as National Key Point
declaration finalized
5. Formulate
and implement
security
deployment
plan for critical
network
infrastructure
April 2021
Evaluation of bid for provision of armed
security service completed. Pending probity
audit and submission to BAC.
6. Formulate
and implement
Memorandum
of
Understandings
with various
stakeholders to
protect
electricity
network
June 2021 Submission made to EXCO to formulate
Strategy and MoU for partnership between
City Power and Community-based Crime
Prevention structures/ forums. One informal
partnership formed with Mulbarton/ Glenvista
Community Crime Prevention Forum and
resulted to arrest of two suspects for damage
to essential infrastructure crimes (theft of fuses).
Standing partnership and engagement in
City Power Quarter 3 Final Report 46
Risk
Ref
Risk Residual
Risk Rating
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management
of risk
Due date Progress on each action item as at end of the
quarter
Q2
place with Gauteng Provincial Non-Ferrous
Metal and Crime Combat Forum
7. Develop and
roll out
intelligence &
investigate plan
to mitigate risk
of cable theft,
vandalism and
illegal
connection
March
2021
One prosecutorial-driven operation
conducted where crime information on
tampering with essential infrastructure by
customer owing R3m was collected. Currently
liaising with SAPS to prefer criminal charges.
Strategic Planning meeting held with SAPS and
NPA to implement prosecutorial driven security
operations to curb illegal connect and prefer
criminal charges. Next meeting ion Q4 to
finalize plan. SAPS Douglasdale SAPS
requested to conduct SAPS Intelligence
Assessment and Analysis at Kya Sands informal
settlement regarding illegal connections
8. Formulate
plan to
integrate ID
cards with
various systems
and processes,
e.g. Forcelink
enrolments,
network keys
processes and
contracts
management.
June 2021 R782 new ID Cards produced for contractors
and R233 700.00 was collected for lost/
misplaced ID Cards. Contractors ID Cards with
permission to collect material integrated to
SAP system and monitored and updated on
monthly basis
City Power Quarter 3 Final Report 47
Risk
Ref
Risk Residual
Risk Rating
KPI Linked to the
Risk
KPI
Achievemen
t
Action to
improve
management
of risk
Due date Progress on each action item as at end of the
quarter
Q2
5 Insurability H 1. Percentage of
Planned
Maintenance
performed
2. Percentage of
the strategic
Risks
management
action plans
implemented
2.1 Monthly
Reports to
relevant Group
Executives
indicating
claims due to
prescribe.
Monthly 2.1 Monthly Reports to relevant Group
Executives indicating claims due to prescribe.
Table 14: Operational Risk
Physical Risks Linked to Operational Risks based on residual risk rating
The following 4 key findings were effectively closed:
The early warning fire detection installed at the Alexandra Kew Depot was found to be faulty
Housekeeping were observed to be below acceptable standards posing various Health and Safety Risks at Hursthill Depot
Housekeeping were observed to be below acceptable standards posing various Health and Safety Risks at Klipspruit Depot
The air-conditioning system in the server room is dysfunctional at Lenasia
The following 3 key findings are still work in progress:
The main fire panel is located in the server room and is not monitored in accordance with acceptable standards at the Alexandra Kew Depot
Inadequate fire hydrant flow and pressure noted. The water flows and pressure in the fire hydrants could not be determined for firefighting
purposes at Hursthill depot
The early warning fire detection installed at the depot was found to be faulty at Klipspruit depot
The remaining 17 key findings are budget dependent and have been suspended for implementation until such a time that budget is made available
to address them
City Power Quarter 3 Final Report 48
2.5. Litigation Report
Table below outlines City Power’s Litigation Report
Type Issue under
consideration/Affected
class of transactions /
account balance /
disclosure
Undertaken
by/other party
Commenc
ed
Current Status Potential
Liability
Costs
Incurred.
Attorneys dealing with the matter
Litigation Dlamini issued summons for
damages claim where he
sustained an injury by falling
into a trench alleged to be
dug by City Power and left
opened.
Dlamini / CITY
POWER
JOHANNESBURG
(PTY) LTD
November
2013
The matter has been
stagnant for some time.
The plaintiff need to set
the matter down but has
not done so. We are just
letting the sleeping dogs
lie. This matter will be
removed from our
litigation report since It’s
been stagnant for a very
long time.
R267 400.00 R 45 200.00 Twala Attorneys
011 832 2073
308 Colombine Avenue,
Mondeor
Litigation Claim arising from supply
chain processes (Exclusion
of a bidder) in procurement
of protective structures Bid.
Divinity trading /
CITY POWER
JOHANNESBURG
(PTY) LTD
November
2014
On the 23 November 2020
the Supreme Court of
Appeal dismissed Divinity
application for leave to
appeal indicating that
there is no reason for
prospects of success. This
matter will be removed
from our litigation report.
90M R 3 068 669.15 Padi INC
011 484 0409
1st Floor, Old Trafford Block 1 Isle of
Houghton Estate, 36 Boundery Road
Cnr Carse O’Gowrie
Litigation Matter in respect of
termination of NEC3
contract for the upgrading
of the Eldorado Park
substation, with Setheo
Investments.
CITY POWER //
SETHEO
INVESTMENTS
[ELDORADO PARK
SUBSTATION]
(HOPEFIELD
SUBSTATION]
We engaged with Setheo
Engineering in a without
prejudice meeting,
wherein possible
settlement was discussed.
At such meeting, it was
agreed that Setheo
Engineering would provide
certain documentation
supporting their claims. We
had received
documentation outside of
the agreed timeline, and
R69 667 600.18 R950 039.30 Madhlopa & Thenga Incorporated
54 7th Avenue, Parktown North,
Johannesburg, 2193
Tel: 011 442 9045
Fax: 011 788 0131
City Power Quarter 3 Final Report 49
towards the end of the
work year. We have since
considered the
documentation, and have
noted certain
documentation which we
still require.
We await documents from
Setheo and will
subsequently arrange for
another settlement
discussion meeting.
Setheo has refused to
suspend legal
proceedings and
consequently settlement
discussions are running
without prejudice parallel
to litigation.
We have filed our plea in
this matter.
Litigation The City, City Power and
JRA are being sued for
violation of a patent for
manhole covers.
KOUMANTARAKIS
// CITY POWER /
COJ / JRA
November
2018
The Plaintiff has not taken
the matter since February
2019 when we filled our
plea. The subject matter of
the claim which is patent
rights has also expired in
December 2020 and
nullifying the bases of the
plaintiff claim. We have
advised our attorneys to
close the file and let the
sleeping dogs lie.
Not
Applicable.
R703 089.99 Padi INC
011 484 0409
1st Floor, Old Trafford Block 1 Isle of
Houghton Estate, 36 Boundery Road
Cnr Carse O’Gowrie
Litigation Cancellation of contract PULSEMED June 2019 A review application has
been lodged by City
Power for the cancellation
of the contract because it
was irregularly awarded.
Pulsemed’s attorneys set
down their interlocutory
application on the 16th
April 2020 to compel City
Power to produce
Remaining
contract price
R1 097 766.71 Padi INC
011 484 0409
1st Floor, Old Trafford Block 1 Isle of
Houghton Estate, 36 Boundery Road
Cnr Carse O’ Gowrie
City Power Quarter 3 Final Report 50
confidential documents.
Due to the lockdown, the
matter was not heard. On
the 28th May 2020,
Pulsemed’s attorneys
served on us a
consolidated index of their
interlocutory application,
however no new date for
hearing has been
obtained. We have written
letters to Pulsemed’s
attorney to set the matter
down.
Litigation Claim due to non-payment
of moneys for services
allegedly rendered to city
Power. Plaintiff claims for
specific performance and
in the alternative, payment
of a specified sum of
money.
J & B Consulting June 2019 Upon filing of Notice of
Intention to Defend,
Plaintiff filed application
for Summary Judgement
which was opposed.
Plaintiff subsequently
withdrew the application.
Exception was then
applied by City Power
against the Plaintiffs’
particulars of claim on the
basis that the particulars of
claim disclosed no cause
of action and that it is also
vague and embarrassing.
Plaintiff has amended its
particulars of claim and
same is being considered
and the necessary legal
approach to be decided
upon in defending the
action. No further steps
has been taken by the
plaintiff.
Our plea has been filed
and pleadings have
closed. The next step will
be discovery.
R5 000 715.98 R309 389.00 Madhlopa & Thenga Incorporated
54 7th Avenue, Parktown North,
Johannesburg, 2193
Tel: 011 442 9045
Fax: 011 788 0131
City Power Quarter 3 Final Report 51
Litigation Dispute about payment of
Invoices.
Six claims by ABB for non-
payment of invoices, ROEs,
outage and equipment.
The matter refers to
adjudication in terms of the
NEC contract
ABB June 2019 The matter was referred to
arbitration. After various
discussions and pre-
arbitration meetings, it was
decided that the
separated issue, being
whether ABB was entitled
to a change in price due
to City Power failing to
supply outages, would be
heard first. The separated
issue was heard during
July 2020, and the
arbitrator awarded in City
Power’s favour. The result
of the award is that ABB is
not entitled to the price
change, and their claim of
R22 076 954.28 essentially
fall away. ABB had
intended to amend their
statement of claim, which
was objected to by City
Power. ABB has requested
settlement discussions
which we are considering.
ABB has sent a proposal
for some of their invoices
to be paid, our team is
going through them to see
which ones can be
settled.
R5 532 973.13 R33 939 835 Madhlopa & Thenga Incorporated
54 7th Avenue, Parktown North,
Johannesburg, 2193
Tel: 011 442 9045
Fax: 011 788 0131
arbitratio
n
Dispute about payment of
invoices referred to
Arbitraction
Divinity Trading/
City Power
August
2019
Parties are attempting to
settle the matter outside
arbitration process. During
December 2020 Divinity
was instructed to produce
certain documents
relating to the claim and
same has not been
submitted to date. This
was done outside the
arbitrator so as to limit
issues of dispute between
the parties.
There was an agreement
between the parties that
R5 333 409.90 R694 905.00 Ngubani & Associates Attorneys
Suite No. 31| 18 Kyalami Boulevard |
Kyalami Office Park | Johannesburg
Tel. 011 – 466 8311
City Power Quarter 3 Final Report 52
the Plaintiff will be paid for
all invoices that have
WCC’s and PO’s. all other
invoices will be paid if
proper supporting
documents are produced.
Arbitratio
n
Dispute about payment of
invoices
TIS August
2019
Settlement has been
reached and we owe
them a lesser invoice fee
than initially claimed. We
are currently processing
payment as per
settlement agreement.
Matter will be removed
from our litigation report.
R8.7M R3 480 741.41 Padi INC
011 484 0409
1st Floor, Old Trafford Block 1 Isle of
Houghton Estate, 36 Boundery Road
Cnr Carse O’Gowrie
Litigation Notice of Motion for
disputing tariff increase
Casting Forging &
Machines plus
others
December
2019
NERSA is the main
Applicant, we are cited
because the outcome of
this Notice of Motion will
have an impact on us.
Matter is at pleading
stage. NERSA filed Rule 53
records providing reasons
for the decision was taken.
The applicants are yet to
deliver their
supplementary affidavit.
We are now considering to
get an expert opinion to
conduct a comparison
exercise in relation to the
payment of monthly
electricity charges to be
presented to the
opponents.
Not
Applicable.
R398 321.02 ENS Africa
129 Rivonia RD
Sandton
011 269 7600
City Power Quarter 3 Final Report 53
Litigation Notice of Motion tocompel
City Power to supply
electrical services to the
Township known as Kevin
Ridge Extension 36 situated
at Agricultural Holding 395,
North Riding Agricultural
Holdings and compel CoJ
to declare that the
township is an approved
Township in terms of section
103 of the Ordinance
Renico October
2020
The matter was set down
for the 19th October 2020
in an Unopposed Roll.
We filed our Replying
Affidavit and the matter
was then moved from an
Unopposed Roll.
During early December
we held Teams meeting
with Renico in an attempt
to reach amicably
resolution outside court.
Parties are consulting to
get instructions relating to
settlement.
Not
Applicable
Not yet
invoiced
Ngubani & Associates Attorneys
Suite No. 31| 18 Kyalami Boulevard |
Kyalami Office Park | Johannesburg
Tel. 011 – 466 8311
Litigation Contempt of court
application
Infinite Blue/ City
Power
Septembe
r 2020
Matter was removed from
unopposed Court role on
02 November 2020 as a
results of Infinity Blue
opposing the matter.
Infinity blue has
subsequently indicated
that they no longer intend
to oppose the matter. We
are waiting for Infinity Blue
to file the Notice of
withdrawal to oppose the
matter and we will set the
matter on the unopposed
role.
Not
Applicable.
R1 588 155.29 ENS Africa
129 Rivonia RD
Sandton
011 269 7600
City Power Quarter 3 Final Report 54
Table 9: Litigations Table
Litigation Payment of an invoice VOX 2021 Summons received for
payment of an
outstanding invoice.
R30 000.00 Not Invoiced Ngubani & Associates Attorneys
Suite No. 31| 18 Kyalami Boulevard |
Kyalami Office Park | Johannesburg
Tel. 011 – 466 8311
Litigation Dispute about bad debt
and/or exemption of City
Power to pay tax as part of
municipality.
SARS 2019 Matter head by Supreme
Court of appeal (SCA) on
05th November 2020.
Appeal by City Power was
dismissed with costs. City
Power has applied for
leave to appeal at the
Constitutional Court. We
are waiting for the SCA to
provide decision on the
application for leave to
appeal.
R650 million R3 616 037.63 ENS Africa
129 Rivonia RD
Sandton
011 269 7600
City Power Quarter 3 Final Report 55
2.6. Compliance Management
City Power is committed to the establishment of a workplace environment that is characterized by
compliance to relevant Legislation, Regulations, By-Laws of the City of Johannesburg. and City Power
Policies. Compliance by City Power is an imperative issue for consideration taking into cognizance section
214 of the Companies Act No.71 of 2008, which explicitly prohibits false statements, reckless conduct and
non-compliance by companies. Consideration of compliance is further imperative to maintain a good
reputation and a high level of corporate governance practice.
Compliance by City Power relates to the attainment of strategic objectives in terms of the VUCA strategy,
and the management of operations within the legislative and regulatory framework. High levels of
compliance influence complete alignment to principles of corporate governance and conducting business
in a responsible and accountable manner.
This section includes percentage compliance with laws, impact thereof and mitigating actions on non-
compliance areas.
Compliance issues that management need to know and consider in making decisions are reflected below
in the form of compliance assessments and the findings thereof. This will enhance decision making. In
addition, follow-ups will be made on non-compliance matters with adverse findings from the previous
assessments performed in the preceding financial year.
Compliance Risk Management Plans (CRMP’s)
During the period under review, development of the compliance risk management plans commenced. This
is done to ensure that the core Acts are well managed and controls are known and monitored continuously.
The establishment of Compliance Risk Management Plans will continue into the next quarter.
Legislative Universe
City Power has a regulatory universe that consist of a total of 89 pieces of legislation, regulations, by-laws
and policies that have been identified as having a direct effect on the City Power business. Although some
pieces of legislation may not have a direct implication on City Power, secondary impacts for these must still
be considered. For example, service providers, subsidiaries and associates may be required to implement
certain legislation and City Power may be held ultimately accountable for compliance with such legislation
e.g. supply chain / sub-contracting and outsourcing of services.
When considering legislation, we typically categorise legislation in the following categories:
Core regulatory requirements are deduced from relevant legislation that underpin the very nature
of the specific business; non-compliance may or can severely threaten or limit the continued viability
of the business due City Power’s operating license being suspended of terminated by NERSA or loss
of revenue to a material impact on profits and / or market share sustainability as a result of severe
penalties and / or negative publicity.
Secondary regulatory requirements are deduced from relevant legislation that are secondary in the
specific business environment; non-compliance may or can insignificantly affect the business due to
a limited impact on loss of revenue as a result of minor penalties and / or negative publicity.
Topical and pertinent regulatory requirements are deduced from relevant legislation that is
contemporary in the specific business environment; non-compliance may or can significantly affect
the business due to an impact on loss of revenue as a result of penalties and / or negative publicity.
Top 10 priority legislations are as follows:
1. Electricity Regulation Act, 4 of 2006
2. Companies Act 71, of 2008
3. National Energy Act 34, of 2008
4. Municipal Finance Management Act, 56 of 2003
5. Occupational Health and Safety Act, No. 85 of 1993
City Power Quarter 3 Final Report 56
6. National Environmental Management Act, 107 of 1998
7. Basic Conditions of Employment Act, 75 of 1997
8. Employment Equity Act, 55 of 1998
9. Municipal Systems Act, 32 of 2000
10. Disaster Management Act, 57 of 2002
And Priority Regulations and Codes
National Energy Regulator of South Africa (NERSA’s NRS 047, NRS 048, and NRS 057 Standards)
National Treasury Regulations and Circulars
MFMA Circulars
Supply Chain Management Regulations
South African National Standard – Code of Practice for Electricity Metering
South African Grid Code – The Metering Code
South African Distribution Code – Network Code
King IV
National Treasury MFMA Circular 100
Directive IRO COVID – 19 Occupational Health and Safety Measures in Workplaces, 2020
General Safety Regulations published under OHSA
Facilities Regulations issued in terms of OHSA
The Environmental Regulations issued in terms of OHSA
Regulations in terms of section 27(2) of the Disaster Management Act
Regulations relating to Protection of Personal Information
There are no fines that have been incurred in relation to non-compliance to any of the City Power’s
applicable Acts for the current reporting period.
Percentage of compliance with laws and regulations as at 31/03/2021 is 94.2%. The table below is an
overview of the status of compliance on the top 10 priority legislations/Codes.
Act Name Scope Q3
2020/21
Comments / Remedial Actions
1. Electricity
Regulation Act,
4 of 2006
Conducted in 2020/21 Q1
Scope Covered:
Distribution System
Operating Code (NRS082)
South African National
Standard (SANS 474: 2018)
Electricity Metering
Standard
85% Compliance with the Electricity Regulation Act
has remained below 100% due to the non –
compliance with the frequency of meter
reading. City Power will continue to drive
implementation of the identified corrective
actions to ensure 100% compliance.
Management Comments
Meter reading plan for LPU and domestic
meters has been submitted financial year
2020/21
Responsible: Metering Group
City Power Quarter 3 Final Report 57
Act Name Scope Q3
2020/21
Comments / Remedial Actions
2. Companies Act
71, of 2008
Conducted in 2020/21 Q2
Scope Covered:
Section 72 and 86 that
deals with the
establishment of Social
and Ethics Committee and
appointment of the
company secretary.
Regulation 43(5) that deals
with the function of the
social and ethics
committee.
100% Compliant
3. National
Energy Act 34,
of 2008
Conducted in 2020/21 Q1
Scope Covered:
NRS 047
83% Compliance with the National Energy Act has
remained below 100% due to the non -
compliance with the restoration of supply after
forced interruptions and the frequency of
meter reading. City Power will continue to drive
implementation of the identified corrective
actions to ensure 100% compliance.
Management Comments
Management agrees with the finding.
Compliance with power supply restoration
targets is a standing KPA which is being
monitored on a daily basis and interventions
are being implemented regularly to improve
compliance.
Responsible: Engineering Operations Group
4. Municipal
Finance
Management
Act, 56 of 2003
Conducted in 2019/20 Q4
Scope Covered:
Section 71, 87(8), 99(2),
116(1)(a & b), 116 (2) (a –
d) that deals with
expenditure incurred, 30
days’ payment, repairs &
maintenance, and
contract management.
90.9% Compliance with the Municipal Finance
Management Act has remained below 100%
due to amount spent on repairs and
maintenance. City Power will continue to drive
implementation of the identified corrective
actions to ensure 100% compliance.
Management Comments
Management agrees with the finding. The
expenditure as compared to the book value of
plant, property and equipment was 7% which is
less than 8% as prescribed MFMA circular
number 71. It should be noted that the
following factors contributed to this non-
compliance and management is putting up
measures to ensure that the finding does not
recur.
Lack of repairs and maintenance materials
Delays in the procurement process
Delays in the finalization of the labor
Responsible: Finance Group
City Power Quarter 3 Final Report 58
Act Name Scope Q3
2020/21
Comments / Remedial Actions
5. Occupational
Health and
Safety Act,
No.85 of 1993
Conducted in 2020/21 Q2
Scope Covered:
Section 17 & 19 that deals
with health and safety
representatives and
committees.
100% Compliant
6. National
Environmental
Management
Act, 107 of
1998
Conducted in 2020/21 Q2
Scope Covered:
Section 14, 16 that deals
with contents of the
environmental
management plan, the
submission of the
adopted environmental
management plan and
annual submissions.
100% Compliant
7. Basic
Conditions of
Employment
Act, 75 of 1997
Conducted in 2020/21 Q3
Scope Covered:
Section 10 that deals with
overtime
98% Compliance with Basic Condition of
Employment Act has remained below 100%
due to overtime. City Power will continue to
drive implementation of the identified
corrective actions to ensure 100% compliance
Management Comments
HR & Transformation reports on a monthly basis
to Governance EXCO and quarterly to the
Social Ethics & Human Resources Committee
on the high overtime hours and the cost of
overtime. The Company has taken a decision
that the payment of overtime be capped at 40
hours per month in line with the Conditions of
Service and that employees be granted leave
in lieu of hours worked. Since Overtime forms
part of Conditions of Service, which is a
collective agreement, the matter must be
tabled at LLF. The 40-hour cap was discussed
with labour on 10 Dec 2020.
Responsible: Human Resources &
Transformation Group
8. Employment
Equity Act, 55
of 1998
Conducted in Q3 2020/21
Scope Covered:
Submission of Employment
Equity plan
Reporting to the
Employment Labor
Department
Publication of the report.
100% Compliant
City Power Quarter 3 Final Report 59
Act Name Scope Q3
2020/21
Comments / Remedial Actions
Report to include a
Statement of
remunerations and
benefit of the work- force
9. Municipal
Systems Act, 32
of 2000
Conducted in 2020/21
Scope Covered:
Declaration of Interests
Q1 - 526/1684 submissions
received
Q2 - 1145/1966 submissions
received *(Security officers –
283 have been added on the
list, hence the total number is
now 1966)
Q3 - 1877/1966 submissions
received
95%
Compliance with the Municipal Systems Act
has remained below 100% due to employees
not submitting declaration of Interests as a
result of COVID - 19. City Power will continue to
drive implementation of the identified
corrective actions to ensure 100% compliance
Management Comments
Due to COVID – 19 lockdown challenges and
working from home requirements, most
employees do not have access to internet –
linked devices. HR&T is continuously assisting
employees to declare their financial interests.
Responsible: Human Resources &
Transformation Group
10. Disaster
Management
Act, 57 of 2002.
Conducted in Q3 2020/21
Scope Covered:
Disaster Management Act
COVID – 19 Regulations
and Directive COVID – 19
OHS Measures in the
Workplace
90% Compliance with the Disaster Management
Act has remained below 100% due to non -
compliance with the Regulations and Directive
COVID – 19 OHS Measures in the Workplace.
City Power will continue to drive
implementation of the identified corrective
actions to ensure 100% compliance
Management Comments
Symptom screening scanners (Wellness) – in a
process of sourcing new devices for
temperature screening.
Regular disinfection (Office Hygiene) - City
Power office hygiene department does not
have the capacity to meet the standard.
Planning to appoint a service provider to
capacitate the current cleaning team.
Responsible: Human Resources &
Transformation Group
Table 10: Top 10 priority legislations/Codes
Compliance Assessments
In terms of the Annual Compliance Monitoring Plan for 2020/21, the approach is to cover all groups for assessment
purposes, in relation to legislative requirements applicable to the Groups as well as 37 City Power Policies. This
City Power Quarter 3 Final Report 60
report therefore presents applicable legislation and regulations that were assessed during the 3 rd Quarter of
2020/21. Below is the discussion relating to the compliance assessments conducted. This represents some of the
major focus of the Auditor General and our shareholder (CoJ) interests on these compliance matters.
Group Legislation and Policies
Human Resources and
Transformation Group
Disaster Management Act (Consolidated COVID – 19 Direction on
Health and Safety in the Workplace)
Occupational Health and Safety Act
Employment Equity Act
Basic Conditions of Employment Act
Talent Management Policy
Bursary and Skills Development Policy
Table 11: Compliance Assessments
Summary of Area of Focus for Human Resources and Transformation Group
Human Resources and Transformation Group
No. Area of Focus Risk Ratings
(VH/H/M/L)
Disaster Management Act (Consolidated COVID-19 Direction on Health and Safety in the Workplace)
1. Clause 3 focuses on Risk assessment and plans for
protective measures
Low
2. Clause 4 focuses on administrative measures
Low
3. Clause 5 focuses on social distancing measures
Low
4. Clause 6 focuses on symptom screening
High
5. Clause 7 focuses on sanitizers, disinfectants and
washing of hands
High
6. Clause 8 focuses on cloth masks
Low
7. Clause 9 focuses on Measures in respect of
workplaces to which public has access
Low
8. Clause 11 focuses on specific personal protective
equipment
Low
Occupation Health and Safety Act No. 85 of 1993
9. Section 17 – that deals with the requirement to have
health and safety representatives
Low
10. Section 19 – that deals with the requirement to have
health and safety committees
Low
Employment Equity Act 55 of 1998
11. Section 20: City Power shall prepare a 5-year
Employment Equity Plan.
Low
City Power Quarter 3 Final Report 61
12. Section 21: Reporting to the Employment Labor
Department
Low
13. Section 22: Publication of the report.
Low
14. Section 27: Report to include a Statement of
remunerations and benefit of the work- force
Low
Talent Management
15. Section 4: Talent Acquisition through a Birth principle
of the GIT’s
Low
16. Section 6: Talent Re-Assignment through Transfers,
Transfer letters inside personal files, Secondments
Low
17. Section 7: Acting Principles
Low
Basic Conditions of Employment Act
18. Section 10: That deals with overtime hours worked
and paid
Moderate
Bursary and Skill Development Policy
19. Section 3: Main line service Low
20. Section 6: Recruitment
Low
21. Section 7: Contractual Obligation to sign bursary
agreement
Low
22. Section 10: Payment of Study Bursary upon receipt of
original tax invoice from Institution
Low
-
Summary of adverse findings for Compliance Assessments performed in Q3
The following adverse findings were made in relation to the Human Resources and Transformation Group
Summary of
Area of
Focus with
adverse
findings
Findings Risk Rating
(VH/H/M/L)
Management Comments
Clause 6
focuses on
symptom
screening
Symptom screening is not performed and
devices for temperature screening are
faulty.
High
Wellness is in a process of
sourcing new devices for
temperature screening
Clause 7
focuses on
sanitizers,
disinfectants
and
washing of
hands
Work surfaces are not regularly cleaned
and disinfected as per Joburg SOP
cleaning and disinfecting is performed
once a day with regular routine cleaning
and also as and when required.
High
According to COJ SOP
disinfecting should be done
every 2 hours. City Power
office hygiene department
does not have the capacity
to meet the standard. To
appoint a service provider to
City Power Quarter 3 Final Report 62
capacitate the current
cleaning team.
Follow up on previous audit findings
In order to ensure compliance a follow up is made in relation to the previous audit findings that were
highlighted during the compliance audit that were conduct. The purpose of this exercise is to close the
previous findings and also to ensure that management deliver on their management commitments to
comply. The table below indicates the adverse findings:
Movement from the adverse audit finding is depicted as follows:
Improved
Unchanged/ slight improvement/ slight regression
Regressed
Internal Audit
Area of Focus Management Comments Risk
rating
Due date for
compliance
Movement
Standard 1300
: Deals with
the
development
of a Quality
Assurance and
Improvement
Program
The QAIP can only be in place after the
external quality assessment. The process of
getting a service provider is currently in progress
and should be advertised by 11/12/2020.
High 31 March
2021
The finding
remained
unchanged
Standard 1312:
Requires
External
Assessment
We are currently on the procurement stage
and advert should go out by 11/12/2020. The
process will be completed by 31 March 2021.
High 30 June
2021
The finding
remained
unchanged
Relationship Management
Area of Focus Management Comments Risk
rating
Due date for
compliance
Movement
Chapter 22 of
GCIS: Requires
that every
organization to
develop a Crisis
Communication
Plan. Draft to be
There is a draft of the crisis communication
plan which has not been finalized as off yet.
Finalization and approval of the drafted Crisis
Communication plan by 30 June 2021.
High 30 June
2021
The finding
remained
unchanged
City Power Quarter 3 Final Report 63
send for review
process.
Finance Group
Area of Focus Management Comments Risk
rating
Due date for
compliance
Movement
City Power is
not compliant
to the
requirement
of the MFMA
Circular No,71
Management agrees with the finding. The
expenditure as compared to the book value of
plant, property and equipment was 7% which is
less than 8% as prescribed MFMA circular
number 71. It should be noted that the following
factors contributed to this non-compliance and
management is putting up measures to ensure
that the finding does not recur.
Lack of repairs and maintenance materials
Delays in the procurement process
Delays in the finalization of the labor
High 31 May 2021 The finding
remained
unchanged
Engineering Operations Group
Area of Focus Management Comments Risk
rating
Due date for
compliance
Movement
City Power is
not compliant
to the
requirement
of the NRS 047
Clause 4.5.3
Management agrees with the finding.
Compliance with power supply restoration
targets is a standing KPA which is being
monitored on a daily basis and interventions are
being implemented regularly to improve
compliance.
High Ongoing The finding
remained
unchanged
Metering Group
Area of Focus Management Comments Risk
rating
Due date for
compliance
Movement
City Power is
not compliant
to the
requirement
of the South
African
National
Standard
(SANS 474:
2018)
Electricity
Metering
Standard
(Clause 5.1)
Meter reading plan for LPU and domestic
meters has been submitted financial year
2020/21
High 30 June
2021
The finding
remained
unchanged
Quarterly compliance submission to the CoJ’s Group Risk Group Compliance
City Power Quarter 3 Final Report 64
On a quarterly basis all CoJ’s entities and departments are required to submit their quarterly compliance
assessments.
The following submissions were made to the CoJ for Q3 of 2020/21 financial year.
Quarterly compliance assessments report
30 days’ payment report for the quarter
Signed Unauthorised, Irregular, Fruitless and Wasteful (UIFW) expenditure declaration for the quarter.
Overall conclusion and opinion
The matters communicated throughout this report relate to the mandatory requirements of the applicable
regulations that form part of the City Power regulatory universe, and should be addressed in order to ensure the
compliance and quality of service. Compliance assessment for the 3rd quarter of financial year 2020/21 was
conducted for Human Resources and Transformation Group. Compliance assessments were based on the
regulatory universe comprising of applicable legislation, regulations, and the policy. Our responsibility is to express
an opinion on the compliance status based on the assessment, and we believe our audit provides a reasonable
basis for our opinion. Based on the assessment results, City Power is not compliant with the applicable legislation
requirements as indicated in the findings above. It is the conclusion of this assessment that the overall compliance
level for City Power for quarter 3 is 94.2% MFMA, Electricity Regulation Act, National Energy Act, Municipal Systems
Act, Basic Conditions of Employment Act and Disaster Management Act. The non-compliance status is further
exacerbated by the lack of improvement in resolving the previous adverse findings. The management comments
and due dates for compliance given to resolve the findings, are not adhered to. This has a potential to expose
City Power to compliance risks. Compliance will continue to identify compliance legal obligations and assist
business in complying through monitoring and recommendations.
2.7. Safety, Health, Environment, Risk and Quality Management (SHERQ)
This report serves to appraise City Power EXCO about the 3rd quarter (January to March 2021) performance
focusing mainly on the following areas:
• Disabling Injury Frequency Rate (DIFR) Statistics
• SHERQ Management System model
• Work-related incidents
• Public & Contractor Incidents and
• Environmental Management report
The report gives an outline of performance of the department within the Enterprise Support group, focusing
on the following:
SHERQ Management System based on the “ISO 9001:2015 (Quality Management), ISO 14001:2015
(Environmental Management), ISO 31000:2018 (Risk Management) and ISO 45001:2018 (Occupational Health
and Safety) Standard Requirements for the three months’ period.
An Integrated Management System, is a system that integrates all City Power’s systems and processes into
one complete framework. These are not separate systems, instead they are an integrated management
system with linkages so that similar processes can be managed seamlessly and performed without
duplication. The purpose of an Integrated Management System is to streamline similar processes to allow the
business to work as a single unit with united objectives and thereby better meet the needs of the business
and its management and operations.
In keeping with its vision of “World Class Energy Utility”, City Power commits to adhere to the guidelines of the
Integrated ISO SHERQ Management System, focusing on the performance of the organization as per the
items outlined in the areas stated on Purpose.
City Power Quarter 3 Final Report 65
HIGHLIGHTS – January to March 2021
DIFR has been maintained below ≤1
On-going Induction of newly appointed Labour Contractors to date 222 training has been conducted
to various staff members.
Only four (8) employee incidents reported in the period
SABS Stage 1 audit were conducted pending outcomes report
SAFETY: January to March 2021
Employee Safety
For the period under review the business incurred eight (08) incidents as per outlined details (in the incident
information and graph) which resulted to City Power DIFR of 0.97. The Integrated SHERQ Management System
(IMS) and commitment by top management and all the relevant key stakeholders including staff and
contractors play a key role in terms of compliance and governance, resulting in the following achievements
during the reporting period (3rd quarter).
Disabling Injury Frequency Rate performance graph
Graph 3: 12 months’ performance cycle re: April 2020 to March 2021
Employee Incidents accrued for the period under review
Date of
Incident
Location of
Incident
Name of
employee Description of incident Days lost
Incident
Investigati
on Status
Progress
05/01/21
PPS
Operations
Hursthill
Mpho Ntsala
Employee sustained Abdominal injuries when a
stray rubber bullet fired of by Metro Police into a
protesting crowed hit him in the stomach
06
Preliminary
Report
Submitted
Resumed
duties
City Power Quarter 3 Final Report 66
Table 12: Employee Incidents
PUBLIC SAFETY INCIDENTS
This area focuses on both - the Public Fatalities/Incidents: Controllable KPI as well as Public Fatalities/Incidents:
Non-controllable KPI.
The risk of theft and vandalism, tempering and illegal connection on the City Power network remains a
greater challenge resulting in permanent and or partial and temporary disability, sometimes into fatalities.
For the period under review, five (05) public fatalities were reported and one (01) injury:
On the 05th January 2021 in Midrand, a member of the public was found electrocuted due to theft
and vandalism.
On the 02nd February 2021, a member of the public was electrocuted due to illegal connections
On the 04th February 2021, a young boy was found electrocuted as a result of illegal connections.
On the 06th February 2021 in Alexandra, a member of the public was found electrocuted as a result
of illegal connections.
On the 21st March 2021 in Lenasia, a body of a member of the public was found by community
members next to bare aluminium wires.
On the 29th March 2021 in Roodepoort at Dave Simpson Substation Discovery, a member of the
public illegally entered the substation and accessed a restricted area and tempered with
equipment which resulted in a flash over.
09/01/21
PPN
Operations
Siemert Rd
D. M
Shabangu
Employee sustained electrical burn to his ® arm
when a electrical flash occurred when he
switched the light on, in a feeder board room
22
Preliminary
Report
Submitted
Resumed
duties
17/01/21
Risk Control
South
Reuven
P Sithole Employee fell of a defective chair in the Risk
Control room (Reuven) 24
Preliminary
Report
Submitted
Resumed
duties
21/01/21 HR Reuven
Canteen K Moreme
Employee spilled chemicals and sustained
injuries whilst in the process of decanting
chemicals
06
Preliminary
Report
Submitted
Resumed
duties
12/03/21
PPS
Operations
SER
Y Chabalala 1 x Employees was injured during an electrical
explosion, both employees received arc eyes. 7 Days
Preliminary
Report
Submitted
Resumed
duties
12/03/21
PPS
Operations
SER
D Mokoena 1 x Employees was injured during an electrical
explosion, both employees received arc eyes. 13 Days
Preliminary
Report
Submitted
Resumed
duties
12/03/21 Metering D Mpesi The Employee sustained a contusion wound on
her left foot. 6 Days
Preliminary
Report
Submitted
Resumed
duties
19/03/21
PPN
Operations
Siemert
M Mapena
Employee sustained electric flash burn to his
right hand and Arc eye whilst connecting
battery charger on the distribution board.
Still off
duty
Preliminary
Report
Submitted
Still off duty
City Power Quarter 3 Final Report 67
CONTRACTOR INCIDENTS
For the period under review, Two (2) contractor incidents were reported. Mafoko Security employee was shot
by an unknown person whilst patrolling and a Maopeng Contractor employee sustained flash burn injuries at
a load centre whereby they were scheduled to conduct maintenance and they went to incorrect Chamber.
ENVIRONMENTAL MANAGEMENT
City Power is ISO 14001: 2015 (Environmental Management System) certified and complies with all relevant
environmental management principles.
SUSTAINABLE ENVIRONMENTAL PRACTICES
City Power has been experiencing outages in the Roodepoort area due to technical challenges, theft and
vandalism and damage of electrical cables by other stakeholders such as Rand Water as they upgrade their
infrastructure. Rand Water supplies water to the implicated area whilst City Power supplies electricity. This
means that the two entities find themselves operating in the same vicinity to serve their customers. Both
entities are compelled to consider amongst other drivers are myriad pieces of legislation to comply to,
especially the environmental statutes.
Rand Water lodged a complaint to the City of Johannesburg EISD – Compliance and Monitoring division
about the damage of the installed gabions structures on the stream by City Power when the latter conducts
the maintenance of its electrical cables. A meeting between Rand Water and CoJ- EISD Compliance and
Monitoring took place and it is at the backdrop of these engagement that CoJ-EISD scheduled a site
meeting with City Power on the 19th February 2021 to address the stipulated environmental challenges. The
meeting took place on site, near the stream on JG Strydom Road in Weltevreden Park.
ENVIRONMENTAL FINDINGS
I. Unstable Gabions structures was observed on site: Unstable gabions structures is a risk on the stream
that is located nearby, this can be as results of collapsing of the gabions structures into the stream
and negatively affect the water resources with aquatic life and life span.
• Mitigation measure: Reconstruction of new and high quality standard gabions
structures.
II. Soil erosion caused by extensively excavation and backfilled: This issue of concern causes the risks
of increasing the flooding during rainfall; sedimentation in the stream and soil degradation.
• Mitigation measure: Soil compaction or infill of top soil
III. Alien plant invasive near the gabion structures and stream (Poor quality management): Alien plant
invasion have the risk of reduction of stream water flow
• Mitigation measure: Alien plant invasion control method, thus by removing affected
area
IV. The way-leave process: If two or more than one stakeholders operate in the same space there has
to be consultation process in order to identify and mitigate the risk factors.
• Mitigation measure: Way-leave process to be applied effectively.
City Power Quarter 3 Final Report 68
Potential Risks
Loss of ISO Accreditation and Certification
Company reputation and Image
Non-compliance to ISO Standard requirements
Failure to meet the business KPIs
Loss of operating license
Legislative Implications
Compliance to relevant legislation and other requirements
Occupational Health and Safety Act (85 of 1993) (OHSA)
National Environmental Management Act (108 of 1998) (NEMA)
National Environmental Management Waste (Act 59 of 2008) (NEMWA)
National Conservation Act (73 of 1989) (NCA)
Compensation for Occupational Injuries and Diseases of 1993 (COID)
National Health Act (61of 2003) (NHA)
Basic Conditions of Employment Act 75 of 1997 (BCEA)
Constitution of the Republic of South Africa No. 108 of 1996
Labour Relations Act 66 of 1995 (LRA)
Municipal By-laws
King Codes
City Power Policies, ISO Manual and Standard Operating Procedures
Picture 2: Unstable Gabions
structure
Picture 1: Soil erosion
Picture 3: Vegetation’s growing
near the Gabions structure
City Power Quarter 3 Final Report 69
2.8. Information Communication Technology
This section of the report, provides the multiple disciplines within the ICT environment that ensure good
governance of ICT.
ICT Governance
This section of the report, provides the status of ICT Governance.
The ICT Strategy and the ICT Governance Framework is under review and a draft report will be delivered
in Q3.
The ICT Policies have been reviewed and will be presented to Audit and Risk Committee for
recommendation to the Board for approval
ICT Change Advisory Board has been established.
ICT Cyber Security
This section of the report, provides the ICT Security status-quo
Cyber Security ensures the implementation of controls in order to safeguard computers, servers, mobile
devices, electronic systems, networks, and data from malicious attacks. It is very important because it
involves everything that relates to protecting City Power’s sensitive data, intellectual property, data, and
information systems from attempted theft and damage.
City Power ICT takes Cyber Security very seriously to ensure that all its assets are secured, and since the
emergence of Corona Virus COVID-19, which introduced new ways of working to all organizations, this has
necessitated us to adopt zero trust security architecture to safeguard our assets. The overall ICT Cyber
Security implementation stands at 70%. Number of Cybersecurity Technologies deployed and Governance
based on the Cybersecurity Framework NIST and the recommendation from previous Cybersecurity attacks:
Identifying the risks, threats and assets within our environment.
Protecting our assets by implementing access control, deployment of appropriate security technologies
as well as conducting awareness and training on a regular basis to educate our internal users on matters
pertaining security in order to eliminate attacks emanating from internal.
Detecting to identify anomalies on the environment as well as understanding the type of intrusions and
the kind of vulnerabilities that exist on the environment.
Responding through events analysis, continuous improvement and also come up with mitigation plans
to the events.
Recovering whereby we ensure that when we are compromised within the environment we are able to
recover using backups as well as the information from our DR site.
In addition to the above, ICT management is reviewing and updating ICT security policies with relevant
legislation and conducting pro-active ICT security awareness campaigns. A draft external vulnerability test
report is also in review stage for finalization. The ICT security technologies are based on the below mentioned
security domains. We have made strides to deploy security technologies per domain as outlined below.
Solutions still to be deployed
This section of the report details the solutions to protect against Cyber - attack that were not deployed this
Financial year.
Solution Description
Privileged account management(PAM) PAM is also known as privileged identity
management, deals with the protection of
privileged accounts in an enterprise, including
those of operating systems, databases, servers,
applications, and networking devices
Multifactor Authentication Systems (MFA) Multi-factor authentication (MFA) is used to
ensure that digital users are who they say they
City Power Quarter 3 Final Report 70
Solution Description
are by requiring that they provide at least two
pieces of evidence to prove their identity.
Each piece of evidence must come from a
different category:
something they know
something they have or
something they are
Network Access Control (NAC) NAC is used to manage access to the network
where noncompliant users or devices are
placed in quarantine. NAC generally supports
the following:
Authentication and authorization of users and
devices
User and device profiling
Denial of unsecured devices
Quarantine of unsecured devices
Restricting access to unsecured
devices
Policy lifecycle management
Overall security posture assessment
Incident response through policy
enforcement
Guest networking access
Cyber Threat Hunting
Cyber Threat Hunting is used to proactively
search for threats through networks, endpoints,
and datasets. It hunts for malicious, suspicious,
or risky activities that have evaded detection
by existing tools.
Deployed Solutions
This section of the report details the solutions that have been deployed to guard against cyber
adversaries and protect City Power’s ICT infrastructure and information assets.
Solution Description
McAfee Advanced Threat Defense Protect endpoints from advanced and emerging
threats. Endpoint detection and response technology
enable faster threat detection and rapid remediation.
It enables organizations to detect advanced, evasive
malware and convert threat information into
immediate action and protection. Unlike traditional
sandboxes, it includes additional inspection
capabilities that broaden detection and expose
evasive threats. Tight integration between security
solutions—from network and endpoint to
investigation—enables instant sharing of threat
City Power Quarter 3 Final Report 71
Solution Description
information across the environment, enhancing
protection and investigation.
SOC (Security Operation Center) RSA Tool
A SIEM system is a centralized enterprise security log
management and analysis product. It centrally
automates all the work of collecting logged
information and generates reports, helping find
potential security incidents recorded in the logs so
that an organization can respond to potential threats.
McAfee Endpoint Security (ENS), Threat
Prevention, Application Control, Data Loss
Prevention (DLP), Threat Intelligence Engine,
and Adaptive Threat Protection
Delivers centrally managed defences with integrated
capabilities like endpoint detection and response and
machine learning analysis.
McAfee DAM Insight Monitors transactions on database instances.
Database risk is low for the seven databases being
monitored.
CrowdStrike Falcon Deliver real-time protection and visibility even when
the agent is not connected to the internet.
CrowdStrike Falcon provides robust threat prevention,
leveraging artificial intelligence (AI) and machine
learning (ML) with advanced detection and response,
and integrated threat intelligence all through a highly
intuitive management console.
Palo Alto Firewall A Next-generation firewall (NGFW), a part of the third
generation of firewall technology, combining a
traditional firewall with other network device filtering
functions, such as an application firewall using in-line
deep packet inspection (DPI), and an intrusion
prevention system (IPS). It integrates features such as
Threat Prevention, URL Filtering, WildFire® malware
analysis, DNS Security, SD-WAN, GlobalProtect to
further strengthen firewall protections.
FortiGate Firewall Purpose-built with security processers to enable the
industry's best threat protection and performance for
SSL-encrypted traffic. Fortinet’s security services from
FortiGuard Labs provide continuous threat intelligence
updates to keep organizations protected from exploits
and encrypted malware.
Trustwave MailMarshal A fast, easy-to-use email content security solution that
ensures a safe and productive working environment
by enforcing your Acceptable Use Policy and
protecting against spam, viruses, and other
undesirable content.
Tenable Nessus A vulnerability scanner designed to make vulnerability
assessment simple, easy and intuitive, resulting in less
time and effort to assess, prioritize, and remediate
issues
ManageEngine EventLog Analyzer Provides end-to-end log management and analysis
with reports and alerts.
Lookout MDM A mobile device management (MDM) and mobile
app management (MAM) solution that detects
threats in apps, devices, and their network
connections to protect users, mobile devices, as well
as company information assets.
City Power Quarter 3 Final Report 72
Solution Description
Cisco Umbrella Offers flexible, cloud-delivered security. It combines
multiple security functions into one solution to extend
protection to devices, remote users, and distributed
locations anywhere in an organization
ICT Business Continuity
This section of the report, provides the status ICT Business Continuity
Disaster Recovery (DR) Site
The existing DR site is not adequate, the capacity at this site is not sufficient to cater for all critical applications.
The DR site with enough capacity to cater for all critical applications has to be put in place in order to ensure
business continuity in the event of a disaster. Adequate Data Centre facilities, computing and storage
capacity are required.
The plan is to address the Disaster Recovery site using a hybrid strategy implemented in a phased approach.
The hybrid strategy will involve the following:
Upgrade of the existing DR site for hosting of critical applications.
Hosting of less critical applications in the external hosted DR environment.
These will be done in a phased approach as follows.
Phase 1: Replace the infrastructure and facilities at the existing DR site. The infrastructure and facilities
includes: Generator, UPS & Batteries, Air Conditioning, Monitoring System, Data Centre Network Switches and
Fibre Connectivity Link between Reuven Data Centre and Roodepoort DR.
Phase 2: Implement the VXRail hardware for private cloud environment which will provide the required
computing resources for critical applications.
Phase 3: Acquire 3rd party external hosted DR services to cater for less critical applications.
The work intended for the DR site has not yet commenced due to unavailability of funds.
Storage and Backups
ICT have two Data Domains, the one in Production environment and another one in DR environment.
Production Data Domain replicates to DR site on a Daily Basis. Our current storage capacity in Production is
78% full and 93% full at DR site.
The Production environment and the DR site is at a risk of running out of capacity, therefore ICT needs to go
out on Tender for the new backup solution
Nox and Sox Implications on the ICT operations
City Power ICT has a total of four (4) generators, two of these five are for the Data Centres that host the all
data for all City Power applications. The first Data Centre is based in Reuven which is the main one operating
daily and the second Data Centre is in Roodepoort at the Disaster Recovery site.
The two (2) Data Centres are maintained by a service provider including all equipment (UPS, Air-conditioners,
generators etc.).
Both Data Centres have UPS’s and one stand-by generator each that kick in when there is a power outage.
The ICT network across the business is supported by the other two (2) generators.
With the four (4) generators kicking in during an outage, there are environmental emissions (Nox and Sox), in
the form of smoke, coming from the generators that contribute to City Power’s levels of air pollution.
Nitrogen Oxides and Sulphur Oxides along with particulate matter are pollutants that affect air quality and
cause acid rain. They come from multiple sources including combustion; Data Centres with diesel generators,
City Power Quarter 3 Final Report 73
which is the case currently for City Power Data Centres, are contributors to the air quality challenge. It is
deemed that the contribution is still minimal as these generators kick-in only in cases of an outage.
ICT management are engaging with the service provider to measure the age of the generators and the
amount of Nox and Sox coming from these generators; this will enable City Power ICT to actively manage its
contribution of the emissions. The engagement is expanded to research alternative ways to power the Data
Centres with more environmentally friendly technologies such as solar power. This research will consider the
viability, cost implications, and the possible need for energy storage.
ICT Audit Findings
This section of the report, provides the ICT Audit Findings Status
Financial year 2019/20
ICT Department AGSA Internal Audit Total
Audit Findings 33 2 35
Resolved 0 0 0
Not Resolved 33 2 35
Table 13: ICT Audit Findings
ICT Strategic Risk’s
This section of the report, provides the ICT Strategic Risk’s Management Status
Risk
Ref.
Risk
Description
Residual
Risk
KPI linked to
the Risk
Action to Improve
Management of
Risk
Due date Progress on Each
Action Item as at
end of the Quarter Q2 Q3
1 Cyber
security
threats
due to
high
exposure
of the
vulnerable
city power
network as
a result of
under
investment
H H 1. Secure
Smart Utility
2. Data and
risk driven
Organization
Upgrade the
network to
address OT
requirements
and IT
requirements
with newer
technology.
Replacement
of switches
Not on 2019/20
plan
Ongoing
Currently not on
20/21 plan. It
was on Demand
plan however
there was no
funding made
available on
CAPEX for this
project. ICT will
look at
reprioritizing this
project
compared to
other priorities.
All 19 procured
cabinets have
been mounted
and 63 switches
installed. The
project is not yet
completed
because ICT
could not
replace switches
in some areas
within main
building and E1
City Power Quarter 3 Final Report 74
Risk
Ref.
Risk
Description
Residual
Risk
KPI linked to
the Risk
Action to Improve
Management of
Risk
Due date Progress on Each
Action Item as at
end of the Quarter Q2 Q3
Block due to
those areas
requiring bigger
cabinets and
routing of
network cabling.
Replacement or
upgrade of legacy
systems with an up
to date support
system. Develop a
strategy to remove
or disable
unnecessary
functionality from
systems
We have budget for
SCADA and OWMS,
which will be
completed
September 2020, The
rest of the
upgrade/replacement
of legacy systems are
not planned for this
financial year
SCADA upgrade
concluded.
ICT has
applications
running old
operating
systems (Legacy
systems) which
cannot be
patched and
longer
supported.
These require
budget.
All Windows
Server 2003
machines
are
controlled
by McAfee
Application.
Servers with
unsupported
Operating
Systems
traffic are
also
controlled
by McAfee
Application.
Windows XP
– XP
Machine
have
replaced
Windows 7:
3 machines
out of 17
have been
replaced
thus far and
14 still need
to be
replaced.
The 14 will
be replaced
when ICT
has
procured
City Power Quarter 3 Final Report 75
Risk
Ref.
Risk
Description
Residual
Risk
KPI linked to
the Risk
Action to Improve
Management of
Risk
Due date Progress on Each
Action Item as at
end of the Quarter Q2 Q3
new
computers.
Awareness
campaigns: users
on the secure use
of their mobile
devices in the
environments they
are likely to be
working in.
Quarterly
Ongoing Awareness
campaigns: focusing
on internal
communication via
SharePoint, CP
Everyone
communication mail
and Notice boards.
Group policy
deployment is
currently being
tested on the ICT
staff machines with
an intention to roll it
out to the entire
business. Depot
awareness and
classroom training
has been differed
due to the COVID 19
lockdown
pronouncements by
the president.
Implementation
of Network
Access Control
– Solution
June 2021 NAC is ready for
rollout. ICT requires
more hours with the
Service Provider to
assist with the roll
out. NAC will be
rolled out on the
newly installed
switches including
the switches that
could not be
replaced as they are
also compatible
Categorise and
classify data
(confidential,
top secret,
etc.)
Encryption of
removable
media
June 2021 Data and
Process
Governance
department has
started the
process to
Categorise and
Classify Data.
Encryption of
removable
media strategy
will be
developed in
City Power Quarter 3 Final Report 76
Risk
Ref.
Risk
Description
Residual
Risk
KPI linked to
the Risk
Action to Improve
Management of
Risk
Due date Progress on Each
Action Item as at
end of the Quarter Q2 Q3
consultation with
the business. The
encryption of
removable
media will be
applied based
on the
developed
strategy
Table 14: ICT Strategic Risk
City Power Quarter 3 Final Report 77
ICT Performance Management
This section of the report, provides the performance of ICT Projects Management.
ICT Projects/
Initiatives
Source
of funds
Expected
completion
date
ICT
Plan
ICT Build Milestones
Current Status
Expected benefits of project/solution
implemented Remarks
Pre
pa
ratio
n a
nd
Pla
nn
ing
De
tail
De
sig
n
Re
alisa
tio
n
Un
it/I
nte
g. Te
stin
g
UA
T
Fin
al P
rep
Go
-Liv
e
Po
st G
o-l
ive
Su
pp
ort
Ha
nd
ov
er
to IC
T
Op
era
tio
ns
Outage
Management
System
(OWMS)
(Forcelink)
Upgrade
CAPEX
C.2809 30.06.2020
Fully Digitised Schematics
Implementation of digital switching
instructions
Improved tracking of outages (Planned
Outage Module)
Enhancement of current integration points
and implementation of new integration
points
Technical go-live
achieved by 30 June
2020.
Completion of +-540
digitised schematics,
single line diagrams
and overview
diagrams. Roodepoort
area of distribution is
now operational.
Other areas will go
operational on an
ongoing basis.
SCADA System
Upgrade
(Spectrum V3
to Spectrum
V7)
CAPEX
2810 30.06.2020
Upgrade to latest technology Spectrum
Solution Version (7) from outdated SP3
version
Easy-to-use Database Management
System providing, facilities for interactive,
on-line data amendment and display
editing without interference to the Power
system operation (no special software
knowledge requirements for users).
Open system architecture based on the
strict adherence to international standards
Distributed hardware and software
configuration for best performance due to
parallel processing, permitting selectable
redundancy and simplified expansion and
excellent scalability
SCADA upgrade
completed. Point to
point testing to
connect sub-stations to
SCADA Master Station
is now being done on
an ongoing basis.
Project is now in
maintenance mode.
City Power Quarter 3 Final Report 78
ICT Projects/
Initiatives
Source
of funds
Expected
completion
date
ICT
Plan
ICT Build Milestones
Current Status
Expected benefits of project/solution
implemented Remarks
Pre
pa
ratio
n a
nd
Pla
nn
ing
De
tail
De
sig
n
Re
alisa
tio
n
Un
it/I
nte
g. Te
stin
g
UA
T
Fin
al P
rep
Go
-Liv
e
Po
st G
o-l
ive
Su
pp
ort
Ha
nd
ov
er
to IC
T
Op
era
tio
ns
LINUX / Windows based workstations and
servers, v ORACLE® based Database
Management System for Information
Model Management (IMM)
Display of real-time data on full-graphic
ultra-high-resolution color displays
presenting information in a clear and
concise manner with zooming,
decluttering and panning
Increased operator efficiency and
reduced errors by using the latest state of
the art graphics
Graphical environment that operators can
tailor to their specific tasks and
preferences
Multiple-window displays, full pan and
zoom capabilities and excellent display
call-up times
Modular, structured and standard fully
proven application software with well-
defined interfaces for easy maintenance
and enhancement
Context-sensitive online help system and
HTML based Operator Manual
Improved supervisory control by means of
tagging, manual update and remote
control orders
Clear and easy to-operate user interface
for fast and reliable work in network
operation
Information Model Management provides
the ability to enter and maintain
engineering data in Common Information
Model in a central repository
City Power Quarter 3 Final Report 79
ICT Projects/
Initiatives
Source
of funds
Expected
completion
date
ICT
Plan
ICT Build Milestones
Current Status
Expected benefits of project/solution
implemented Remarks
Pre
pa
ratio
n a
nd
Pla
nn
ing
De
tail
De
sig
n
Re
alisa
tio
n
Un
it/I
nte
g. Te
stin
g
UA
T
Fin
al P
rep
Go
-Liv
e
Po
st G
o-l
ive
Su
pp
ort
Ha
nd
ov
er
to IC
T
Op
era
tio
ns
Independent front-end system (IFS) with
simple IFS code which is easily
maintainable and upgradeable
GIS Upgrade CAPEX 30.06.2020
Creation of Customer to Network Link
(CNL)
Upgrade of the following tools within GIS
o Executive Viewer
o Technical Viewer
o Operational Viewer o
o Load reading application
o Asset Planning Tool
o Asset Network Tool
o Asset Maintenance Tool
Enhanced third party systems integration
o 2-way GIS integration to SAP PM
2-way GIS integration to the Outage
Management System
Upgrade of ARCGIS
completed
Upgrade of planning
tool completed.
Solution is now live at
City Power.
Cyber Security CAPEX
OPEX 30.12.2020
Protection against cybersecurity threats
Reduction in ICT network vulnerabilities
Prevention of loss of company information
Uninterrupted business continuity
Project deliverables
have been met and is
live.
City Power Quarter 3 Final Report 80
ICT Projects/
Initiatives
Source
of funds
Expected
completion
date
ICT
Plan
ICT Build Milestones
Current Status
Expected benefits of project/solution
implemented Remarks
Pre
pa
ratio
n a
nd
Pla
nn
ing
De
tail
De
sig
n
Re
alisa
tio
n
Un
it/I
nte
g. Te
stin
g
UA
T
Fin
al P
rep
Go
-Liv
e
Po
st G
o-l
ive
Su
pp
ort
Ha
nd
ov
er
to IC
T
Op
era
tio
ns
SharePoint
Upgrade 2013-
2016
OPEX 30.04.2021
Upgrade outdated 2013 SP to 2016
technically
Limited functional enhancements for e.g.
co-authoring, large file support etc.
UAT to commence
from 29.03.2021
Migration to
Microsoft
Teams
OPEX 30.06.2020
a workable solution/ability to work from
home
Conform to Coviod-19 social distancing
requirements
Establishment of a base to change future
working conditions (work from home) for
City Power Support Services
Completed
Laptop
replacement
programme CAPEX
OPEX
ongoing
30.06.2020
Replace laptops for work from home
employees with latest specification
machine to enable virtual capability
Issue work from home employees with
data cards
90% completed
In roll-out stage
Connectivity:
APN/Data
Cards
Issue work from home employees with data
cards In roll-out stage
City Power Quarter 3 Final Report 81
ICT Projects/
Initiatives
Source
of funds
Expected
completion
date
ICT
Plan
ICT Build Milestones
Current Status
Expected benefits of project/solution
implemented Remarks
Pre
pa
ratio
n a
nd
Pla
nn
ing
De
tail
De
sig
n
Re
alisa
tio
n
Un
it/I
nte
g. Te
stin
g
UA
T
Fin
al P
rep
Go
-Liv
e
Po
st G
o-l
ive
Su
pp
ort
Ha
nd
ov
er
to IC
T
Op
era
tio
ns
Process
Automation
Electronic
document
(workflow and
digital
signature)
OPEX 30.06.2020 Ability to review and approve/reject electronic
documents throughout the business
In planning stage.
Subject to either public
process or emergency
procurement
Supply Chain
Automation OPEX 30.03.2021
Automation of critical processes to enable the
execution of an end-to-end process from a
virtual office
In planning stage
Finance/
Payroll
Administration
OPEX 31.12.2020
Automation of critical processes to enable the
execution of an end-to-end process from a
virtual office
In planning stage
HR Automation
/Employee Self
Service
OPEX 31.12.2020
Automation of critical processes to enable the
execution of an end-to-end process from a
virtual office
In planning stage
Table 15: ICT Performance Management
Legend
Milestone reached or on track
Milestone behind target (severe impact on overall proj. delivery)
Milestone behind target (moderate impact on overall proj. delivery)
Milestone(s) not yet commenced with
City Power Quarter 3 Final Report 82
Operations Status
This section of the report, provides the performance of ICT Operations.
Cyber Security ICT Role Current Status
Firewalls ICT Security
Network Access Control ICT Security
Mobile Device Management ICT Security
Intrusion Prevention System ICT Security
End Point Security ICT Security
Infrastructure ICT Role Current Status
Data Centre ICT Infrastructure
Servers ICT Infrastructure
Storage ICT Infrastructure
Network ICT Infrastructure
Backups ICT Infrastructure
Databases ICT Infrastructure
Applications ICT Role Current Status
SAP ICT Applications
Exchange ICT Applications
SharePoint ICT Applications
Domain Controllers ICT Applications
Printing ICT Applications
Forcelink ICT Applications
Third Party Support ICT Role Current Status
Odirile (Service Desk) ICT Operations
MTN ICT Operations
Vodacom ICT Operations
Dalitso ICT Operations
DRS ICT Operations
Mindex Library Solution ICT Operations
DigiSilent (Power Factory
Stationware)
ICT Operations
BizAg(Giscoe) ICT Operations
Siemens (SCADA) ICT Operations
DELL/EMC ICT Operations
Acumen (Forcelink) ICT Operations
Caddie ICT Operations
Ontec (Itron) ICT Operations
Jolenhla Consulting (Hardware) ICT Operations
InteLipos (Canteen ) ICT Operations
ACS (Security) ICT Operations
Online Intelligence (Occurrence
Book)
ICT Operations
Table 16: ICT Operations
2.9. Security Risk Management
Aligns to strategic risk regarding escalation of cable theft and vandalism and other operational security
risks incidental to the business.
= <70% = 70-94% = >95% = Does not Exist
City Power Quarter 3 Final Report 83
Security Risk Management reason to exist is to protect City Power’s employees, stakeholders,
infrastructure and assets by, inter alia:
Ensuring safe and secure work environment for employees,
Reducing cable theft, vandalism and illegal connection.
Accordingly, Security Risk Management render strategic support service with the object of enabling
attainment of City Power strategic objectives by mitigating security risks and threats, reducing
vulnerabilities and prioritizing security of critical network infrastructure and assets.
SRM Framework
Security Risk Management key focus areas are delineated into eleven indices as depicted in figure 1
below. These indices provide high level portrayal of critical assets and activities fundamental to the
existence of the business and achievement of strategic goals. The framework further serves as roadmap
to guide security risk priorities, initiatives and investments.
Table 17: SRM Framework
Security Risk Incidents Outlook
During Q3 (Jan – March 2021) 505 cable theft and vandalism incidents were reported compared to 468
for the same period in 2019/2020 FY. This translates to 7.3% increase, see figure graph below. This increase
is attributable to various socio-economic factors associated with poverty and unemployment and
general increase in essential infrastructure crimes in the sector which include the rail environment (PRASA
and Transnet Freight Rail).
0
500
1000
1500
2000
2500
3000
July Aug Sept Oct Nov Dec Jan Feb March April May June Total
Actual 14/15 237 238 207 221 217 194 204 205 213 208 218 146 2508
Actual 15/16 134 135 111 172 150 149 119 116 97 112 115 120 1530
Actual 16/17 142 125 161 120 132 118 134 131 154 135 147 110 1609
Actual 17/18 140 122 107 125 146 146 143 132 154 125 150 154 1644
Actual 18/19 140 160 143 151 152 141 129 135 193 169 200 152 1865
Actual 19/20 132 145 105 161 155 111 168 140 160 92 152 118 1639
Actual 20/21 98 104 110 151 114 206 144 188 173
Total incidents
City Power Quarter 3 Final Report 84
Graph 4: Total Incidents
16 suspects were arrested for copper cable theft and vandalism during Q3 compared to 24 suspects
arrested for the same period in 2019/2020 FY, see graph below.
Graph 5: Total Suspects Arrested
050
100150200250300
July Aug Sept Oct Nov Dec Jan Feb March April May June Total
Actual 14/15 32 34 28 40 29 21 19 8 28 20 20 16 295
Actual 15/16 15 37 10 22 25 7 14 11 10 9 22 12 194
Actual 16/17 11 9 6 16 18 18 14 5 12 8 15 11 143
Actual 17/18 9 5 8 9 5 14 15 2 7 16 18 12 120
Actual 18/19 3 5 8 25 9 3 11 8 8 5 2 3 90
Actual 19/20 13 1 2 1 3 7 9 2 13 27 3 4 85
Actual 20/21 2 3 7 11 5 11 2 7 7 55
Total Suspects Arrested
City Power Quarter 3 Final Report 85
Performance Against Security Indices
The table below reflects individual security indices (focus areas), corresponding security objectives, measure of
success and performance during Q3. Comments are provided where relevant to provide insights and/ or
interventions going forward.
Indices Objective Measure of success Q1 Q2 Q3 Comments and Interventions
Field
Employees
To create safe
and secure
work
environment
for field
employees
# of security escorts
provided
80 20 24 Security escorts provided to
field employees on requests
whilst working in volatile
areas.
# of security
incidents to field
employees
- 2 0 None
Bulk Intake
Substations
To prevent
security
incidents
resulting to loss
of supply at
Bulk Intake
Substations
# of security
incidents resulting to
loss of supply
0 0 1 Theft of earth cable at Kelvin
yard on 02 March 2021
resulting to trip at Sebenza.
Matter referred to GFIS for
investigation
# of other criminal
activities
0 0 0 None
% actual versus
planned security
manpower
deployment
100% 100% 100% None
# of New
installations:
Integrated Security
Systems
2 2 2 Randburg Depot and
Westfield substation – work in
progress
Major
substations
To prevent
security
incidents
resulting to loss
of supply at
major
substations
# of substations with
24/7 security officers’
deployment
45 45 46 On 01 March 2021, new
security officers deployed at
Allandale substation
following Eskom withdrawal
of own security officers
# of substations
WITHOUT 24/7
security officers’
deployment
56 56 55 Physical security assessments
conducted at all Bulk & Major
substations to improve on
security deficiencies as part
of Winter Strategy
# of substations with
Integrated Security
Systems
44 44 44 Physical security assessments
of all major substations
commenced mid-March
2021 as part of Winter
Strategy
# of security
incidents resulting to
loss of supply
0 0 0 None
# of other criminal
activities
0 0 1 0n 29 January 2021 were
arrested at Pennyville
substation after they
breached perimeter fence
and started to hack-saw
copper cable.
Overhead
Transmission
Lines
To maintain
security
integrity of
and prevent
essential
infrastructure
crimes on
OHTL
# of security
incidents resulting to
pylon collapse
N/A N/A N/A No security activities
undertaken to maintain
security integrity of OHTL. This
is occasioned by limited
resources.
# of encroachment/
illegal occupation of
servitude
N/A N/A N/A As per above
# of inspections
conducted
N/A N/A N/A As per above
City Power Quarter 3 Final Report 86
Indices Objective Measure of success Q1 Q2 Q3 Comments and Interventions
Inner City
underground
tunnels
To prevent
security
incidents
resulting to loss
of supply at
major
substations
# of security
incidents resulting to
loss of supply
0 0 0 Interim measures physical
security measures introduced
to secure tunnels in 2018
sustained stability and
resulted to incident-free
environment. Last incident
resulting to loss of supply
occurred in November 2018.
# of other criminal
activities
0 0 1 Theft of earth cable detected
in January 2021 at Fordsburg
substation
% actual versus
planned security
manpower
deployment
100% 100% 100% Full deployment ensured at all
substations adjoined to inner
city tunnels and hotspot
areas.
Medium-low
voltage
network (load
centres and
underground
cable)
To prevent
cable theft
and vandalism
on electricity
network
infrastructure
# of Cable theft and
vandalism incidents
312 326 505 During the quarter,
Community-based crime
prevention partnership
intervention was initiated and
resulted to arrest of suspects
stealing fuses in Glenvista
area. SRM working on formal
strategy and MoU.
ZAR: direct and
replacement costs
R455
000
R
11.5m
R4m Statistics drawn from claims
lodged with Insurance
Department from Jan – Feb
2021
# of Suspects
arrested
12 21 16 None
# of Court
Testimonies
- 19 22 These testimonies were
provided by City Power
Security Risk Management
personnel during court
proceedings where suspects
were arrested and
undergoing prosecutorial
process.
# Identification
Statements
- 33 46 The identification statements
pertain to copper cable or
any other City Power material
confiscated by SAPS and/
JMPD from suspects and
which were positively
identified.
# of Essential
Infrastructure Crimes
Convictions
- 1 1 One suspect convicted to 15
years direct imprisonment for
essential infrastructure crime,
Parktown SAPS CAS
61/07/2020
City Power Quarter 3 Final Report 87
Indices Objective Measure of success Q1 Q2 Q3 Comments and Interventions
# of Armed
Response Security
Manpower
Deployment
128
(24/7)
128
(24/7)
128
(24/7)
Bid evaluation completed in
January 2021 – Pending SCM
‘quality check’ process.
# of Armed
Response Vehicles
32 32 32 Same as above.
Metering
Services
To enhance
revenue
# of meters
requisitioned &
withdrawn
706 1309 640 None
# of meters
unaccounted for
during
reconciliations
N/A N/A N/A This process will be reported
one once the verification
process as per above is
outlined and rolled out
# of operations to
mitigate against
Illegal connection/
reconnection
0 0 0 One operation conducted in
Ennerdale where customer
owing R3m illegally
connected to network was
cut off and criminal charges
preferred.
# of Requests for
Protective Structures
keys
57 77 83 This is an interim solution
pending roll-out of integrated
Protective Structures plan
spearheaded by Protective
Structure Committee
Depot
Security
To create and
maintain a
safe and
secure work
environment
To maintain
NKP security
standards
# of AWOL by
insource security
officers
0 66 520 Insource security personnel
continue to pose operational
and administrative
challenges due to lack of
supervisory capacity
# of Breaches of
Security
0 3 4 One security incident
occurred at Alex depot
where spare wheel was stolen
from an employee vehicle.
Three housebreaking and
theft incidents occurred at
Lenasia Depot during the
quarter resulting to theft of
material with a combined
value of R76 000.00. Incidents
reported to SAPS and GFIS for
investigations.
# of Customers
served (Visitors
Access Control)
- 9226
3564
These are external customers
serviced by security
personnel at access control
points at Reuven (NKP)
depot.
# of SAPS visits/
inspections to
National Key Point
- 32 26 These inspections are
conducted by SAPS
(protecting force) to
maintain visibility and check
status of NKP in terms of the
National Key Point Act.
# of Service delivery
protests
- 1 0 No service delivery protest
was registered during the
quarter. However, various
low-scale customers’
City Power Quarter 3 Final Report 88
Indices Objective Measure of success Q1 Q2 Q3 Comments and Interventions
complaints are experienced
at Reuven on daily basis.
Warehouse
Security
To reduce
material theft
and fraud
from stores
Crime incidents
involving theft/
suspicious theft of
material from
warehouse
- 1 0 None
Assets Under
Construction
Security
(Capex
Projects)
# of number of major
substations under
construction
3 3 3 Capex projects underway at
three major substations, viz:
Lutz, Moffat and Fleurhof. The
projects include installation of
Integrated Security Systems.
# of City Power
contracted security
personnel deployed
at Asset Under
Construction
projects
0 0 0 None
# of project
disruptions by
communities
0 0 0 None
ID Cards
Management
To enable
positive
identification
and to
minimize
criminal
activities
associated
with City
Power ID cards
# of photo ID cards
produced for
employees
-
16 49 None
# of photo ID cards
produced for
contractors
186 997 782 Increase due to new labour
contracts
ZAR for lost ID Cards - R33 00
0.00
R233 7
00.00
Amount collected for lost ID
cards reflect poor control by
contractors to safeguard City
power ID cards or to recover
same from their employees
on employment termination.
These create crime
opportunities in which
unreturned ID cards are used
to commit illicit activities
against customers.
Table 18: Performance Against Security Indices
2.10. Security Risk Management Plans for Quarter 3
In Q4 Security Risk Management will continue implementing programmes aimed at reducing cable theft vandalism
and illegal connections, inter alia:
Appoint security service providers to render armed security services (electricity network protection) under Bid
No: 2378S
Roll out Prosecutorial-driven crime information gathering and security operations
Roll out Community-based crime prevention initiative – formulation and ratification of MoUs with various
stakeholders
Implement Winter Strategy security programmes
City Power Quarter 3 Final Report 89
CHAPTER 3: SERVICE DELIVERY PERFORMANCE
The approved Business Plan 2020/21 had 26 approved KPIs. This number excluded institutional KPIs. City Power
submitted a deviation that was approved by Exco. Board and the shareholder. The total number of approved
KPIs in the company scorecard is in now 33. The nature of deviations and number of KPIs deviated under each
type of deviations are as follows:
Change in KPI measure:
1. Percentage of Planned Maintenance Performed
Complete Removal of KPI:
1. Percentage of households with access to electricity
2. Percentage Read all meters as per COJ download file2 and accurately read meters for billing by
COJ
Adding of KPI:
1. Percentage of Large Power Users (LPU) meters read as per the download file
2. Percentage Domestic meters read as per the download
Removing of KPI from Company scorecard to Institutional Scorecard:
1. Percentage spent on operating budget against approved operating budget
2. Percentage spent on capital budget against approved capital budget
3. Percentage spent on repairs and maintenance to property, plant and equipment.
4. Percentage reduction in unauthorized, irregular, fruitless and wasteful (UIFW) expenditure
incurred citywide
5. Percentage of the strategic risks’ management action plans implemented.
6. Number of SMMEs supported by the City
Change in in KPI wording/title:
1. Percentage achievement of Service Level Standards (SLS)
2. Revenue derived from sale of electricity (Increased Revenue Recovery from Sales)
3. Percentage reduction in Non-Technical Losses
Decrease in targets:
1. Number units (structures) in informal settlements with access to electricity
2. Percentage Gross Margin
3. Tons CO₂ offset in greenhouse gas emissions
4. Percentage resolution of Audit findings: AGSA
Change the KPI measurement as well as change in targets:
1. System Average Interruption Duration Index (SAIDI)
2. Customer Average Interruption Duration Index (CAIDI)
3. System Average Interruption Frequency Index (SAIFI)
4. Customer Average Interruption Frequency Index (CAIFI)
Change in KPI wording and measure:
1. Average time taken to communicate logged service interruptions- Planned interruption
2. Average time taken to communicate logged service interruption- Unplanned MV and HV
interruption
The final deviated scorecard has 33 KPIs that are divided to the following categories:
City Power Scorecard KPIs
KPI Category Number of
KPIs
Description
Upgrading Informal Settlements
Programme (UISP)
4 Entities are urged to incorporate the UISP indicators into
2020/21 indicators in order to ensure that City continues to
benefit from the grant.
National Treasury (Circular 88) 8 National Treasury released a Circular 88, the Municipal Circular
on Rationalization Planning and Reporting Requirements for
the 2019/20 MTREF which all municipalities must comply with.
Institutional Indicators 8 These KPIs are incorporated in all entities and department in
COJ. They are to improve the City’s effectiveness and
efficiency and approved by Council
City Power Indicators 13 These KPIs measure City Power performance and are
approved by Board. These include the SLS KPI. One KPI was
removed as part of the midyear deviation.
TOTAL 33
City Power appreciates the requirement for quality, availability, among other key service aspects while delivering
its services to the citizens. The SLS KPI is made up of 18 KPIs that are part of the service level agreement with the
Shareholder. One KPI was removed as part of the midyear deviation. These will be collated and measured as a
percentage for performance reporting at company level.
City Power Quarter 3 Final Report 90
3.1. Performance Achievement Comparison (Five Financial-Years)
The table and the graph below depicts a comparison of the performance achieved for five different financial
years. In the financial year under review, City Power has a total of 33 KPIs with only 30 measured KPIs as at Quarter
3. City Power achieved 43.40% of its predetermined objectives. This is an average performance when comparing
all five financial years. The next two performance terms have been forecasted more on the positive side, as the
Company predicts an overall performance of 75.80% at year end.
Table 19: Five Finance-Years Comparison
Graph 6: Five Finance-Years Comparison
3.2. Performance Highlights and Challenges
City Power performance highlights and achievement for second quarter:
27.59 kilometres of cables installed in quarter 3
Achievement of average restoration time of power supply for planned interruptions (7 days)
Achievement 100% Resolution of Logged calls of damaged electricity meters in quarter 3
Achievement of 95% resolution of logged walk-in queries within 30 days
City Power is promoting transformation by achieving
100% payment of valid invoices within 30 days
186 SMME supported in quarter 3
Achievement of all employment equity targets
Achievement of all percentage procurement spent on BBBEE targets
Company had the following challenges for the quarter:
None achievement of Total and Non-technical losses
Overdraft of R5.6bn
Number of outages due to theft and vandalism
Collection level which are impacted by billing delays and Covid 19.
3.3. City Power Quarter 3 Actual Performance
City Power achieved an overall performance of 43.30% as at Quarter 3 in the financial year 2020/2021 which is an
improvement of 4.60% in performance when compared to the Quarter 2 performance of 38.7%. Only 30 of its 33
KPIs have been measured, with 13 achieved KPIs and 17 underperforming KPIs.
1. Finance
Reporting Term Quarter 1 Quarter 2 Quarter 3 Quarter 4 (Forecast) Annual (Forecast)
FY1617 (30 KPI 's) 17 14 13 11 11
FY1718 (33 KPI 's) 12 13 20 22 22
FY1819 (31 KPI 's) 23 22 19 24 24
FY1920 (58 KPI 's) 31 (53 measured KPI 's) 31 (52 measured KPI 's) 29 (54 measured KPI 's) 35 (55 measured KPI 's) 37 (55 measured KPI 's)
FY2021 (33 KPI 's) 8 (31 measured KPI 's) 12 (31 measured KPI 's) 13 (30 measured KPI's) 23 (32 measured KPI's) 25 (33 measured KPI's)
Number of KPI's Achieved: Comparison of different Financial Years
City Power Quarter 3 Final Report 91
a. Percentage total electricity losses
b. Percentage spent on operating budget against approved operating budget
c. Percentage spent on capital budget against approved capital budget
d. Percentage spent on repairs and maintenance to property, plant and equipment.
e. Revenue derived from sale pf electricity (Increased Revenue Recovery from Sales)
f. Percentage reduction in Non-Technical Losses
g. Percentage Gross Margin
2. Capex
a. Number units (structures) in informal settlements with access to electricity
b. Number of dwellings provided with connections to mains electricity supply by the municipality
3. Governance
a. Percentage resolution of Audit findings: Internal Audit
b. Percentage resolution of Audit findings: AGSA
c. Percentage protection against cyber attack
d. Percentage Compliance with relevant legislation and policy prescripts
e. EPWP job opportunities created
4. Service Delivery
a. Percentage achievement of Service Level Standards (SLS)
b. System Average Interruption Frequency Index (SAIFI)
c. Customer Average Interruption Frequency Index (CAIFI)
Table 20: City Power's Actual Quarter 3 Performance
Graph 7: City Power's Actual Quarter 3 Performance
Perf. Status Assessment Quarter 1 Quarter 2 Quarter 3 Year-to-Date Forecast Annual
Target Achieved 8 12 13 16 25
Target Not Achieved 22 19 17 15 8
KPI Not Measured 3 2 3 2 0
33 33 33 33 33
30 31 30 31 33
City Power Company Performance
Reporting Period: Quarter 3 (Final)
Total No. of KPI's
Total No. of KPI's measured
City Power Quarter 3 Final Report 92
The detail performance of each KPI as per approved company scorecard is outline below:
City Power Company Performance
Reporting Period: Quarter 3 (Final)
KPI
Ref.
No.
Key Performance
Indicator
Reporting
Period Measure Target
Actual
Performance
Variance
Performance
Performance
Assessment
Color
Perf.
Movement
comparison
Q2 vrs Q3
No.
1
Percentage
achievement of
Service Level
Standards (SLS)
Quarter 1 % 80.00 58.82 21.18
Quarter 2 % 80.00 47.06 32.94
Quarter 3 % 80.00 64.71 15.29
Year-to-
Date % 80.00 58.82 21.18
No.
2
Number of substations
upgraded/developed
Quarter 1 No. 0.00 0.00 0.00
Quarter 2 No. 0.00 1.00 -1.00
Quarter 3 No. 0.00 0.00 0.00
Year-to-
Date No. 0.00 1.00 -1.00
No.
3
Kilometers of
electricity cables
installed
Quarter 1 Km 4.00 0.00 4.00
Quarter 2 Km 6.00 15.59 -9.59
Quarter 3 Km 6.00 12.00 -6.00
Year-to-
Date Km 16.00 27.59
-11.59
No.
4
Number units
(structures) in informal
settlements with
access to electricity
Quarter 1 No. 200.00 0.00 200.00
Quarter 2 No. 550.00 0.00 550.00
Quarter 3 No. 300.00 82.00 218.00
Year-to-
Date No. 300.00 0.00
300.00
No.
5
Percentage of
households with
access to electricity
Quarter 1 % 92.30 92.30 0.00
Quarter 2 % 92.30 92.30 0.00
Quarter 3 % 0.00 0.00 0.00
Year-to-
Date % 0.00 0.00 0.00
No.
6
Number of dwellings
provided with
connections to mains
electricity supply by
the municipality
Quarter 1 No. 200.00 0.00 200.00
Quarter 2 No. 550.00 0.00 550.00
Quarter 3 No. 300.00 82.00 218.00
Year-to-
Date No. 300.00 0.00
300.00
No.
7
System Average
Interruption Duration
Index (SAIDI)
Quarter 1 Index 421.00 788.00 -367.00
Quarter 2 Index 717.00 840.00 -123.00
Quarter 3 Index 240.00 13.49 226.51
Year-to-
Date Index 240.00 40.02
199.98
No.
8
Customer Average
Interruption Duration
Index (CAIDI)
Quarter 1 Index 388.00 404.00 -16.00
Quarter 2 Index 352.00 382.00 -30.00
Quarter 3 Index 341.00 5.26 335.74
Year-to-
Date Index 341.00 5.95
335.05
No.
9
Percentage of
Planned
Maintenance
Performed
Quarter 1 % 30.00 24.83 5.17
Quarter 2 % 30.00 22.11 7.89
Quarter 3 % 30.00 33.44 -3.44
Year-to-
Date % 30.00 36.50
-6.50
No.
10
System Average
Interruption
Quarter 1 Index 1.25 1.78 -0.53
Quarter 2 Index 2.03 2.20 -0.17
City Power Quarter 3 Final Report 93
City Power Company Performance
Reporting Period: Quarter 3 (Final)
KPI
Ref.
No.
Key Performance
Indicator
Reporting
Period Measure Target
Actual
Performance
Variance
Performance
Performance
Assessment
Color
Perf.
Movement
comparison
Q2 vrs Q3
Frequency Index
(SAIFI) Quarter 3 Number 0.70 2.56 -1.86
Year-to-
Date Number 0.70 6.73
-6.03
No.
11
Customer Average
Interruption
Frequency Index
(CAIFI)
Quarter 1 Index 2.08 2.80 -0.72
Quarter 2 Index 2.84 2.91 -0.07
Quarter 3 Number 1.71 3.48 -1.77
Year-to-
Date Number 1.71 7.29
-5.58
No.
12
Installed capacity of
approved embedded
generators on the
municipal distribution
network
Quarter 1 MVA 1.00 0.22 0.78
Quarter 2 MVA 1.00 2.87 -1.87
Quarter 3 MVA 1.00 2.73 -1.73
Year-to-
Date MVA 3.00 5.83
-2.83
No.
13
Percentage total
electricity losses
Quarter 1 % 31.40 34.17 -2.77
Quarter 2 % 24.54 27.26 -2.72
Quarter 3 % 17.47 29.25 --11.78
Year-to-
Date % 25.50 30.74 -5.24
No.
14
Percentage spent
on operating budget
against approved
operating budget
Quarter 1 % 95.00 84.00 11.00
Quarter 2 % 95.00 84.00 11.00
Quarter 3 % 95.00 84.69 10.31
Year-to-
Date % 95.00 84.06
10.94
No.
15
Percentage spent
on capital budget
against approved
capital budget
Quarter 1 % 10.00 4.20 5.80
Quarter 2 % 20.00 21.40 -1.40
Quarter 3 % 30.00 11.40 18.60
Year-to-
Date % 60.00 37.00
23.00
No.
16
Percentage spent on
repairs and
maintenance to
property, plant and
equipment.
Quarter 1 % 1.76 1.56 0.20
Quarter 2 % 1.76 1.24 0.52
Quarter 3 % 1.79 1.47 0.32
Year-to-
Date % 5.25 4.27
0.98
No.
17
Percentage reduction
in unauthorized,
irregular, fruitless and
wasteful (UIFW)
expenditure incurred
citywide
Quarter 1 % 0.00 0.00 0.00
Quarter 2 % 0.00 0.00 0.00
Quarter 3 % 0.00 0.00 0.00
Year-to-
Date % 0.00 0.00 0.00
No.
18
Percentage resolution
of Audit findings:
Internal Audit
Quarter 1 % 10.00 27.00 -17.00
Quarter 2 % 10.00 6.00 4.00
Quarter 3 % 50.00 7.00 43.00
Year-to-
Date % 70.00 40.00 30.00
No.
19
Percentage resolution
of Audit findings:
AGSA
Quarter 1 % 10.00 41.00 -31.00
Quarter 2 % 10.00 3.00 7.00
Quarter 3 % 50.00 0.00 50.00
Year-to-
Date % 70.00 44.00 26.00
Quarter 1 % 25.00 79.00 -54.00
City Power Quarter 3 Final Report 94
City Power Company Performance
Reporting Period: Quarter 3 (Final)
KPI
Ref.
No.
Key Performance
Indicator
Reporting
Period Measure Target
Actual
Performance
Variance
Performance
Performance
Assessment
Color
Perf.
Movement
comparison
Q2 vrs Q3
No.
20
Percentage of the
strategic risks’
management action
plans implemented.
Quarter 2 % 25.00 77.00 -52.00
Quarter 3 % 25.00 77.00 -52.00
Year-to-
Date % 75.00 77.00 -2.00
No.
21
Number of SMMEs
supported by the City
Quarter 1 No. 30.00 145.00 -115.00
Quarter 2 No. 30.00 156.00 -126.00
Quarter 3 No. 30.00 186.00 -156.00
Year-to-
Date No. 90.00 234.00
-144.00
No.
22
Revenue derived from
sale pf electricity
(Increased Revenue
Recovery from Sales)
Quarter 1
R'000
(Billion) 4559.00 4536.00 23.00
Quarter 2
R'000
(Billion) 4061.00 3837.00 224.00
Quarter 3
R'000
(Billion) 4142.00 3732.00
410.00
Year-to-
Date
R'000
(Billion) 12762.00 12105.00
657.00
No.
23
Percentage reduction
in Non-Technical
Losses
Quarter 1 % 22.80 25.17 -2.37
Quarter 2 % 15.54 18.26 -2.72
Quarter 3 % 8.47 20.25 -11.78
Year-to-
Date % 16.50 21.74 -5.24
No.
24
Percentage Gross
Margin
Quarter 1 % 4.79 3.79 1.00
Quarter 2 % 35.30 31.80 3.50
Quarter 3 % 39.37 35.81 3.56
Year-to-
Date % 25.75 22.54
3.21
No.
25
Number public lights
installed
Quarter 1 No. 70.00 0.00 70.00
Quarter 2 No. 150.00 398.00 -248.00
Quarter 3 No. 180.00 345.00 -165.00
Year-to-
Date No. 400.00 743.00
-343.00
No.
26
Percentage
protection against
cyber attack
Quarter 1 % 97.00 70.00 27.00
Quarter 2 % 97.00 70.00 27.00
Quarter 3 % 97.00 70.00 27.00
Year-to-
Date % 97.00 70.00 27.00
No.
27 AGSA Audit opinion
Quarter 1
Audit
report 0.00 0.00 0.00
Quarter 2
Audit
report 0.00 0.00 0.00
Quarter 3
Audit
report 0.00 0.00 0.00
Year-to-
Date
Audit
report 0.00 0.00 0.00
No.
28
Percentage
Compliance with
relevant legislation
and policy prescripts
Quarter 1 % 100.00 87.33 12.67
Quarter 2 % 100.00 90.10 9.90
Quarter 3 % 100.00 94.20 5.80
Year-to-
Date % 100.00 94.20
5.80
Quarter 1 % 100.00 100.00 0.00
City Power Quarter 3 Final Report 95
City Power Company Performance
Reporting Period: Quarter 3 (Final)
KPI
Ref.
No.
Key Performance
Indicator
Reporting
Period Measure Target
Actual
Performance
Variance
Performance
Performance
Assessment
Color
Perf.
Movement
comparison
Q2 vrs Q3
No.
29
Percentage valid
invoices paid within
30 days
Quarter 2 % 100.00 100.00 0.00
Quarter 3 % 100.00 100.00 0.00
Year-to-
Date % 100.00 100.00 0.00
No.
30
Tons CO₂ offset in
greenhouse gas
emissions
Quarter 1 Tons 10000.00 4956.54 5043.46
Quarter 2 Tons 11000.00 7338.00 3662.00
Quarter 3 Tons 6000.00 6541.10 -541.10
Year-to-
Date Tons 17000.00 18835.64
-1835.64
No.
31
EPWP job
opportunities created
Quarter 1 No. 100.00 0.00 100.00
Quarter 2 No. 200.00 204.00 -4.00
Quarter 3 No. 300.00 218.00 82.00
Year-to-
Date No. 600.00 422.00
178.00
No.
32
Employment equity
ratios (EE)
Quarter 1 % 85.00 92.96 -7.96
Quarter 2 % 85.00 93.21 -8.21
Quarter 3 % 85.00 93.00 -8.00
Year-to-
Date % 85.00 93.00
-8.00
No.
33
Employment equity
ratios (GE)
Quarter 1 % 29.00 32.35 -3.35
Quarter 2 % 29.00 32.88 -3.88
Quarter 3 % 29.00 33.00 -4.00
Year-to-
Date % 29.00 33.00
-4.00
No.
34
Employment equity
ratios (PWD)
Quarter 1 % 2.00 3.31 -1.31
Quarter 2 % 2.00 3.10 -1.10
Quarter 3 % 2.00 3.00 -1.00
Year-to-
Date % 2.00 3.00
-1.00
Table 21: City Power Detailed Scorecard
3.4. City Power Service Level Standard Quarter 3 Actual Performance
City Power achieved 64.71% of its Services Level Standards as at Quarter 3 for the financial year 2020/2021 which is
an improvement of 17.65% in performance when compared to the Quarter 2 achieved performance of 47.06%. 11
of its 17 SLS measured KPIs were achieved, with 6 under-performing SLS KPIs. Namely:
1. Percentage Resolution of power supply after logged forced interruption (30% Restoration of power
supply after logged forced interruption within 1.5 hrs.)
2. Percentage Resolution of power supple after logged forced interruption (60% Restoration of power
supply after logged forced interruption within 3.5 hrs.)
3. Percentage Resolution of power supple after logged forced interruption (90% Restoration of power
supply after forced interruption within 7.5 hours)
4. Percentage Resolution of power supple after logged forced interruption (98% Restoration of power
supply after forced interruption within 24 hours)
5. Percentage of Large Power Users (LPU) meters read as per the download file
6. Percentage Domestic meters read as per the download
City Power Quarter 3 Final Report 96
Table 22: Quarter 3 Service Level Standard Performance
Graph 8: Quarter 3 Service Level Standard Performance
The detail performance of each KPI as per approved company Service Level Standards d is outline below:
Service Level Standard Performance
Reporting Period: Quarter 3 (Final)
KPI
Ref.
No.
Key Performance
Indicator
Reporting
Period Measure Target
Actual
Performance
Variance
Performance
Performance
Assessment
Color
Perf.
Movement
comparison
Q2 vrs Q3
No.
1
Average hours to
restore loss of
logged electricity
supply to traffic
signals
Quarter 1 Hours 18.00 15.90 2.10
Quarter 2 Hours 18.00 20.90 -2.90
Quarter 3 Hours 18.00 11.86 6.14
Year-to-
Date Hours 18.00 16.20
1.80
No.
2
Average time taken
to repaired logged
street lights queries
(Motor ways)
Quarter 1 Days 5.00 2.30 2.70
Quarter 2 Days 5.00 0.80 4.20
Quarter 3 Days 5.00 1.88 3.12
Year-to-
Date Days 5.00 1.80
3.20
No.
3
Average time taken
to repaired logged
street lights queries
(Secondary Roads,
Main Arterials and
Area Lighting)
Quarter 1 Days 8.00 2.00 6.00
Quarter 2 Days 8.00 3.70 4.30
Quarter 3 Days 8.00 5.08 2.92
Year-to-
Date Days 8.00 3.40
4.60
No.
4
Average restoration
time of power
supply for planned
interruptions
Quarter 1 Hours 8.00 6.70 1.30
Quarter 2 Hours 8.00 5.70 2.30
Quarter 3 Hours 8.00 7.07 0.93
Year-to-
Date Hours 8.00 6.40
1.60
Quarter 1 % 30.00 13.10 16.90
Perf. Status Assessment Quarter 1 Quarter 2 Quarter 3 Year-to-Date Forecast Annual
Target Achieved 10 8 11 10 10
Target Not Achieved 7 9 6 7 7
KPI Not Measured 0 0 0 0 0
17 17 17 17 17
17 17 17 17 17
Service Level Standard Performance
Reporting Period: Quarter 3 (Final)
Total No. of KPI's
Total No. of KPI's measured
City Power Quarter 3 Final Report 97
Service Level Standard Performance
Reporting Period: Quarter 3 (Final)
KPI
Ref.
No.
Key Performance
Indicator
Reporting
Period Measure Target
Actual
Performance
Variance
Performance
Performance
Assessment
Color
Perf.
Movement
comparison
Q2 vrs Q3
No.
5
Percentage
Resolution of power
supply after logged
forced interruption
(30% Restoration of
power supply after
logged forced
interruption within
1.5 hrs.)
Quarter 2 % 30.00 17.60 12.40
Quarter 3 % 30.00 9.70 20.30
Year-to-
Date % 30.00
15.30
14.70
No.
6
Percentage
Resolution of power
supple after logged
forced interruption
(60% Restoration of
power supply after
logged forced
interruption within
3.5 hrs.)
Quarter 1 % 60.00 57.00 3.00
Quarter 2 % 60.00 50.50 9.50
Quarter 3 % 60.00 43.80 16.20
Year-to-
Date % 60.00
52.00
8.00
No.
7
Percentage
Resolution of power
supple after logged
forced interruption
(90% Restoration of
power supply after
forced interruption
within 7.5 hours )
Quarter 1 % 90.00 79.60 10.40
Quarter 2 % 90.00 77.30 12.70
Quarter 3 % 90.00 83.40 6.60
Year-to-
Date % 90.00
80.60
9.40
No.
8
Percentage
Resolution of power
supple after logged
forced interruption
(98% Restoration of
power supply after
forced interruption
within 24 hours)
Quarter 1 % 98.00 94.00 4.00
Quarter 2 % 98.00 94.40 3.60
Quarter 3 % 98.00 97.60 0.40
Year-to-
Date % 98.00
95.70
2.30
No.
9
Percentage
Resolution of power
supple after logged
forced interruption
(100% Restoration of
power supply after
forced interruption
within 7 days)
Quarter 1 % 100.00 99.90 0.10
Quarter 2 % 100.00 99.00 1.00
Quarter 3 % 100.00 100.00 0.00
Year-to-
Date % 100.00
99.70
0.30
No.
10
Percentage
Resolution of
Logged calls of
damaged electricity
meters
Quarter 1 % 95.00 100.00 -5.00
Quarter 2 % 95.00 100.00 -5.00
Quarter 3 % 95.00 100.00 -5.00
Year-to-
Date % 95.00 100.00
-5.00
No.
11
Percentage
resolution of logged
illegal connection
queries within 30
days - Single
Properties
Quarter 1 % 95.00 96.55 -1.55
Quarter 2 % 95.00 91.00 4.00
Quarter 3 % 95.00 100.00 -5.00
Year-to-
Date % 95.00 96.00
-1.00
No.
12
Percentage
resolution of logged
illegal connection
Quarter 1 % 95.00 100.00 -5.00
Quarter 2 % 95.00 100.00 -5.00
Quarter 3 % 95.00 100.00 -5.00
City Power Quarter 3 Final Report 98
Service Level Standard Performance
Reporting Period: Quarter 3 (Final)
KPI
Ref.
No.
Key Performance
Indicator
Reporting
Period Measure Target
Actual
Performance
Variance
Performance
Performance
Assessment
Color
Perf.
Movement
comparison
Q2 vrs Q3
queries within 30
days - Multiple
Properties
Year-to-
Date %
95.00 100.00
-5.00
No.
13
Percentage
resolution of logged
walk-in queries
within 30 days
Quarter 1 % 95.00 95.00 0.00
Quarter 2 % 95.00 95.00 0.00
Quarter 3 % 95.00 95.00 0.00
Year-to-
Date % 95.00 95.00
0.00
No.
14
Percentage Read
all meters as per
COJ download file2
and accurately
read meters for
billing by COJ
Quarter 1 % 98.00 90.00 8.00
Quarter 2 % 98.00 92.00 6.00
Quarter 3 % 0.00 0.00 0.00
Year-to-
Date % 0.00 0.00 0.00
No.
15
Percentage of
Large Power Users
(LPU) meters read as
per the download
file
Quarter 1 % 98.00 93.00 5.00
Quarter 2 % 98.00 95.00 3.00
Quarter 3 % 98.00 92.00 6.00
Year-to-
Date % 98.00 92.00
6.00
No.
16
Percentage
Domestic meters
read as per the
download
Quarter 1 % 95.00 89.00 6.00
Quarter 2 % 95.00 91.00 4.00
Quarter 3 % 95.00 90.00 5.00
Year-to-
Date % 95.00 90.00
5.00
No.
17
Average time taken
to communicate
logged service
interruptions-
Planned interruption
(Average time
taken to
communicated
(Planned)
Quarter 1 Days 7.00 7.00 0.00
Quarter 2 Days 7.00 7.00 0.00
Quarter 3 Days 7.00 7.00 0.00
Year-to-
Date Days 7.00 7.00 0.00
No.
18
Average time taken
to communicate
logged service
interruption-
Unplanned MV and
HV interruption
(Average time
taken to
communicated
(Unplanned)
Quarter 1 Hours 5.00 5.00 0.00
Quarter 2 Hours 5.00 5.00 0.00
Quarter 3 Hours 5.00 5.00 0.00
Year-to-
Date Hours 5.00 5.00 0.00
Table 23: Service Level Standard Detailed Performance
City Power Quarter 3 Final Report 99
3.5. Variance Explanation
Under-performing KPI as at
Quarter 3 and Category Variance Explanations Mitigation Plan
1.Finance
a. Percentage total
electricity losses
The total electricity losses have a variance of
11.78 as at quarter 3 which is due to the
current challenges of inefficiencies in the
revenue management processes. Prepaid
performance has declined and the number
of illegal connections has increased.
• The revenue initiatives will improve the
non-technical losses which have been
implemented
• Implementation of pre-billing and post-
billing process to reduce the
administration losses
• Normalization of prepaid meters
through the rollout of smart and semi
meters
• LPU technical audit to verify the
accuracy of the installation and
programming of the meters
• Monitoring and investigation of alarms
with revenue recovery potential
• Action zero/low consumption report
timeously to reduce non-vending meters
• Review the business process which
include internal controls within the
identified leakages
• Analyze the impact of COVID 19 on
total losses
b. Percentage spent
on operating
budget against
approved
operating
budget
A savings on Salaries and Allowances is due
to staff vacancies. The delays in the
procurement process are slowing
expenditure.
Reallocation of budget increase
expenditure.
Bid committee attendance to Individual
performance compacts.
Reporting non-attendance at Bid
Committee meetings of more than two
(2) occasions directly to the office of the
CEO
c. Percentage spent
on capital
budget against
approved capital
budget
The variance is as a result of delays in the
following ;
• Unavailability of contracts
• Contractual disputes on existing contracts
• Community unrests & community closing
construction sites on active projects.
• Material shortages
• Delays in CIC process in the 1st quarter
• Rain delays.
• Delays in receiving Layouts from Housing
department
However other processes have now been
finalized and engagements are taking place
with process owners an increase in
expenditure is anticipated in the last quarter.
Procurement processes to be finalized
Community engagements are
underway for some projects
Process on track to commerce
construction in April for majority of
Electrification projects
Work is continuing for other projects
Bid committee attendance to Individual
performance compacts.
Reporting non-attendance at Bid
Committee meetings of more than two
(2) occasions directly to the office of the
CEO
d. Percentage spent
on repairs and
maintenance to
property, plant
and equipment.
Target not met due to : The slow accelerations in
implementation of planned outages programme
for corrective maintenance by Engineering
operations.
The process of securing meter maintenance
contracts for Metering Services and ICT
system related contracts for Enterprise
support being underway. The Scada &
Telecoms bids were both cancelled at BAC
due to ambiguity on the criteria and are
currently out on tender again and at
evaluation stage but due to COVID 19 the
procurement process is slow. Low expenditure
on Engineering Services on Labor contract
and energy efficiency for the street lights
City Power Quarter 3 Final Report 100
Under-performing KPI as at
Quarter 3 and Category Variance Explanations Mitigation Plan
projects which has not been realized yet as
anticipated
e. Revenue derived
from sale pf
electricity
(Increased
Revenue
Recovery from
Sales)
Revenue has a shortfall of R410 million as at quarter
3, although there is an additional R281,1 million that
has been recovered from the initiatives we are still
below the expected target. The smart meter
prepaid roll out has not commence due to
unavailability of meter, this initiative is also
expected to improve prepaid revenue.
City Power recognizes the changes in the
industry abs such as part of its strategy the
company is transitioning from being an
energy distributor to energy trading
company. It is conceded that the demand
stands to drop in future as LPUs in particular
migrate off-grid and such City Power is
positioning itself to provided additional
services than just units of which these include
the wheeling of electricity at a charges
between customers. This strategy also entails
providing various energy related services to
customers (e.g. infrastructure installations and
other value-added services.
f. Percentage
reduction in Non-
Technical Losses
The non-technical losses have a variance of 12.83
as at quarter 3 which is due to the current
challenges of inefficiencies in the revenue
management processes. Prepaid performance
has declined and the number of illegal
connections has increased. The performance is
preliminary based on projected figures.
• The revenue initiatives will improve the non-
technical losses which have been
implemented
• Implementation of pre-billing and post-
billing process to reduce the administration
losses
• Normalization of prepaid meters through
the rollout of smart and semi meters
• LPU technical audit to verify the accuracy
of the installation and programming of the
meters
• Monitoring and investigation of alarms with
revenue recovery potential
• Action zero/low consumption report
timeously to reduce non-vending meters
• Review the business process which include
internal controls within the identified leakages
• Analyze the impact of COVID 19 on total
losses
g. Percentage Gross
Margin
The underperformance is due to Service Charges
being 5% less than budget. Bulk Purchases are
slightly below budget
Revenue Enhancement initiatives to continue.
These include:
Prepaid smart meter roll out
Unmatched stands
Technical audits
LPU post installation audits
Pre and Post billing analysis
Improve cash collections
Compare mock billing itch Eskom accounts
to ensure correct billing
2.Capex
a. Number units
(structures) in
informal
settlements with
access to
electricity
The variance is as a result of delays procurement
process which took longer than anticipated and
delays in receiving layouts from Housing
department however all processes have now been
finalized , stakeholder engagements initiated and
construction has commenced for some of the
projects.
• Infills Project in Kliptown has commenced and 82
units have been connected
• Rugby Club- Community engagements
underway project will commence in April
• Matholesville – Community engagements
concluded project has commenced
• Princess Plot- Community engagements
1. Community engagements are underway
for majority projects
2. Construction has commenced for some
projects
3. Q4 target for connections anticipated to
be met
b. Number of
dwellings
provided with
connections to
mains electricity
supply by the
municipality
City Power Quarter 3 Final Report 101
Under-performing KPI as at
Quarter 3 and Category Variance Explanations Mitigation Plan
underway project will commence
• Rabie Ridge- Project has commenced
3.Governance
a. Percentage
resolution of Audit
findings: Internal
Audit
During quarter 3, a less than desired resolution rate
was experienced. This was mainly due to the slow
resolution rate or implementation of controls or
measures to resolve the audit findings. The groups
are responsible for the implementation of the
measures recommended, while Internal Audit is
responsible to ensure, through auditing and
reviewing of audit evidence, whether the measures
implemented are adequate to prevent future re-
occurrence of the deficiencies.
The following measures are being
implemented to improve the resolution of
audit findings rate:
• Regular tracking and follow-up of audit
findings with the relevant Groups
• Emphasize the importance of resolution of
audit findings at various GMCs meetings,
including EXCO, etc. The following measures
are being implemented to improve the
resolution of audit findings rate
b. Percentage
resolution of Audit
findings: AGSA
c. Percentage
protection
against cyber
attack
The emergency cyber security report was
approved, budget was loaded and a PO has been
created and awaiting approvals. Once the
payment process is complete, the service provider
will implement the planned activities like Multifactor
Authentication and Privileged access
management. These planned activities will focus on
improving the performance of the outstanding 27%
variance which will assist in addressing the
remaining portions and push our protection to the
envisaged target of 97%.
An external network vulnerability probity has been
conducted and a draft report is currently under
review as part of ICT security assessments.
• Deploy Network Access Control to 50% of
the new network switches installed - Oct to
Feb
• Conduct ICT security assessments, e.g.
penetration tests – Feb 2021
• Network Access Control (NAC) deployment
- end Q4
• Review and update ICT security policies
with relevant legislation – end Q3
• Implement data classification – end Q4
• Conduct pro-active ICT security awareness
campaigns – Oct,Nov, Dec and Jan
d. Percentage
Compliance with
relevant
legislation and
policy prescripts
Non - compliance with the following legislation
requirements:
- Electricity Regulation Act, 4 of 2006 (Frequency of
meter reading and Forced interruptions)
- National Energy Act 34, of 2008 (Frequency of
meter reading and Forced interruptions)
- Municipal Finance Management Act, 56 of 2003
(Repairs and Maintenance)
- Basic Conditions of Employment Act, 75 of 1997
(Overtime)
- Municipal Systems Act, 32 of 2000 (Declaration of
Interests)
- Disaster Management Act, 57 of 2002 (Directive
COVID – 19 OHS Measures in the Workplace)
• Compliance Monitoring (Finance Group)
• Follow up on compliance adverse findings
• Development of compliance risk
management plans (MFMA)
• Compliance Awareness
4.Service Delivery
a. System Average
Interruption Frequency
Index (SAIFI)
b. Customer Average
Interruption Frequency
Index (CAIFI)
c. Percentage Resolution
of power supply after
logged forced interruption
(30% Restoration of power
supply after logged forced
interruption within 1.5 hrs.)
d. Percentage Resolution
of power supple after
logged forced interruption
(60% Restoration of power
supply after logged forced
interruption within 3.5 hrs.)
e. Percentage Resolution
of power supple after
logged forced interruption
(90% Restoration of power
supply after forced
interruption within 7.5 hours
)
f. Percentage Resolution of
power supple after logged
forced interruption (98%
Restoration of power
• All depots had resource constraints for both
internal & external.
• Resource constraints for both internal & external.
• Unavailability of critical material.
• Outages taking long due to faults on Spurs.
• Repeat faults
• Plant at risk not being resolved.
• Illegal connections.
• Overloaded circuits.
• Shortage of operators
• SAP and Forcelink could not close some work
orders in time
• Shortage of Meggers has been affecting the
restoration of supply
Action to meet the target:
• Labor contractors are currently going
through induction and ACCESS training
• Increase the number of external resources
• Efforts are increased in clearing the plant
out of service
• Ops resources are assigned to a number of
bids to evaluate
• Stores to manage the material min & max .
• SCM to ensure that the critical material list is
prioritized to ensure availability at the stores.
• Accelerate closing of the SPURS(Radial
feeds) programme, with the support of
Engineering
• services, which will reduce the restoration
time.
• Optimization Department is drawing the
reports for all repeat faults for areas to resolve
• Accelerate the projects to address
repeated faults identified in all depots.
• Implementation of projects identified to
address plant at risk in all areas.
• Capital investment required to implement
the programme to resolve critical overloaded
circuits.
• Continuous identification of areas that have
illegal connections are refer to Revenue
Protection Department.
• Review our reporting & make provision for
City Power Quarter 3 Final Report 102
Under-performing KPI as at
Quarter 3 and Category Variance Explanations Mitigation Plan
supply after forced
interruption within 24 hours)
exclusions (causes that are outside our
control).
• Load shedding schedule has been
reviewed and will go through the approval
process.
• Depots should accelerate their programs to
appoint level A & B operators.
• Promotability of qualified trade assistants to
Electricians.
• Monitoring of performance dashboards
every 2 hours by team leaders
• ICT requested to investigate the system
challenges
• A deviation report has been drafted for
approval to procure and repair meggers
g. Percentage Domestic
meters read as per the
download
The Domestic meter reading performance has
decreased from 88% in January to 86% in February.
The March meter reading cycle is in progress to be
completed by mid-month. The highest exceptions
which contributes the unread meters are:
• Inaccessible meters (6 545)
• Offline meters (13 246)
• System updates (634)
• Acceleration of smart meter roll out will
improve the overall meter reading
performance for domestic. There is currently
no single phase meters in stock to convert the
remaining manual read meters, only three (3)
phase meter are being rolled out.
• Maintenance of offline meters is being
accelerated
• System Updates are being prioritized
• Focus on the meters not read beyond 12
months
h. Percentage of Large
Power Users (LPU) meters
read as per the download
file
The target has not been achieved due to offline
meters, system mismatches and meter mismatches.
Performance has decreased from 88% in January
to 87% in February, the March performance picked
at 92%, this was due to manual interventions
whereby the meters that could not provide remote
readings were manually read. Furthermore, the
manufacture software was used to manually
download the readings.
100% of LPU Meters are Smart from an
Infrastructure perspective. This deployment
was linked to the significance of LPUs from a
revenue significance. However, the server is
such that only 86% of the meters can be read
remotely leaving the remainder for manual
reading.
The server is currently being upgraded to
ensure that Smart meters are 100% read but
while this is underway, these will be manually
read to achieve 100% attainment at year-end
and future years.
Daily Monitoring of the online meters
continues to be a priority to monitor the
meters that are falling off. The below
exceptions are currently being tracked for
performance improvement:
• Maintenance of the offline meter (570)
• System updates (1 049) are also being
prioritized to be resolved by the next meter
reading cycle.
• Accounts investigations and monitoring
(201) e.g. Demolished buildings, cut off etc.
• System mismatches (34) and incorrect
addresses (99) to be confirmed
• Focus on the meters not read beyond 12
months
3.6. Yearend Forecast
City Power Quarter 3 performance is 43.3%. These should all be achieved going forward. The KPIs that should
continue being achieved are:
1. Kilometers of electricity cables installed
2. System Average Interruption Duration Index (SAIDI)
3. Customer Average Interruption Duration Index (CAIDI)
4. Percentage of Planned Maintenance Performed
5. Installed capacity of approved embedded generators on the municipal distribution network
6. Number public lights installed
7. Percentage valid invoices paid within 30 days
8. EPWP job opportunities created
9. Employment equity ratios (EE)
City Power Quarter 3 Final Report 103
10. Employment equity ratios (GE)
11. Employment equity ratios (PWD)
12. Number of SMMEs supported by the City
The additional 13 KPIs are required in order to achieve the forecasted 75.75% are:
1. Number of substations upgraded/developed
2. Number units (structures) in informal settlements with access to electricity
3. Number of dwellings provided with connections to mains electricity supply by the municipality
4. System Average Interruption Frequency Index (SAIFI)
5. Customer Average Interruption Frequency Index (CAIFI)
6. Revenue derived from sale of electricity
7. AGSA Audit opinion
8. Percentage spent on capital budget against approved capital budget
9. Tons CO₂ offset in greenhouse gas emissions
10. Percentage resolution of Audit findings: AGSA
11. Percentage spent on repairs and maintenance to property, plant and equipment.
12. Percentage resolution of Audit findings: Internal Audit
13. Percentage reduction in unauthorized, irregular, fruitless and wasteful (UIFW) expenditure incurred citywide
3.7. Statement of Accounts Owed by and to Government Departments and Public Entities (Updated)
Statement on amounts owned by and to governments and public entities as at 31 March 2021:
Total Amount
Owed Current 30 Days
60 Days 90 Days
48,637,646.98 (40,132,997.95) 52,402,217.89 8,306,269.83 28,062,157.21
Account No Account Name Status March
220092430 7th Div Headquarters Pwd Arrears
929,494.31
220093794 Alexandria Police Station Arrears
359,401.71
220048689 Asteri Primary School Credit Balance
(791,246.04)
220065035 Athlone Boys High School Current Balance
12,060.83
220028474 Baragwanath Hospital Arrears 17,771,346.40
400735708 Batho Pele Projects Cc Current Balance
10,417.37
220088177 Berea Primary School Current Balance
9,578.16
220002412 Bramley Police Station Arrears
101,677.08
201001221 Carter Hp School Fully Paid
-
501603722 Cavendish Str Primary School Current Balance
9,453.73
403313542 Central Government Arrears
667.25
400713849 Central Government Credit Balance
(58,616.42)
205570695 Central Government Arrears
594,456.98
220056947 Central Government Credit Balance
(24,999.28)
220062250 Cleveland Police Station Arrears
86,359.73
220065596 Cyrildene Primary School Current Balance
8,592.92
220055541 Daxina Primary Arrears
56,143.90
City Power Quarter 3 Final Report 104
Account No Account Name Status March
501428284 Delrado Primary School Arrears
710,738.78
221211024 Dept Of Roads And Transport Arrears
2,389,841.86
221211031 Dept Of Roads And Transport Credit Balance
(1,734,208.76)
221283101 Dept Of Roads And Transport Arrears
2,656,561.35
221211017 Dept Of Roads And Transport Arrears
1,850,842.99
221207123 Dept Of Roads And Transport Arrears
442,618.41
220027079 Dept Of Comm Dev, 6109/2461/1 Arrears
30,607.13
500107866 Dept Of Community Dev Arrears
34,273.59
554605240 Dept Of Community Dev Fully Paid
-
220008118 Dept Of Justice Arrears
301,517.24
205103222 Dept Of Public Works Arrears
69,327.60
900010629 Dept Openbare Werke Arrears
44,060.51
221277120 Dept Pub Works & Land Affairs Arrears
412,938.42
220059105 Dept Public Works Current Balance
4,796.64
551082708 National Government Of The Republic
Of S Arrears
934,960.39
TOTAL Dept Public Works&Land Affairs Arrears
10,905.30
551356892 National Government Of The Republic
Of S Credit Balance
(12,686.33)
205991384 Dept Public Works&Land Affairs Arrears
574,930.72
205991673 Dept Public Works&Land Affairs Arrears
44,489.25
205991426 Dept Public Works&Land Affairs Arrears
37,101.13
207087583 Dept Public Works&Land Affairs Arrears
234,570.62
207080718 Dept Public Works&Land Affairs Credit Balance
(280.49)
400902370 Dept Van Plaaslike Bestuur Arrears
155,380.56
221167015 Dept, Of Public Transport/ Roads &
Works Move Out
-
220003751 Dept, Public Works & Land Affairs Arrears
82,631.00
220903752 Dept, Public Works & Land Affairs Arrears
12,655.28
220061009 Dept,Housing And Local Govt, Arrears
1,507,198.31
220008816 Die Hoofdirekteur/ Stella Arrears
172,329.69
220022970 Die Streeksverteenwoordiger Arrears
232,512.57
220009104 Die Streeksverteenwoordiger Arrears
56,143.97
220028410 Diepkloof Military Camp Arrears
6,106,390.52
City Power Quarter 3 Final Report 105
Account No Account Name Status March
220028442 Diepkloof Prison P W D Arrears
7,116,898.27
220030804 Discoverers Chc-A Arrears
355,144.51
206153177 Eastgate Primary School Arrears
26,455.81
221038725 Edenvale Hospital Credit Balance
(36,205,642.57)
220010501 Education Model C Schools Move Out
-
201001283 Ekukhanyisweni Lp School Arrears
30,830.43
501518851 Eldridge Primary Current Balance
13,226.97
206564794 Fairsand Primary School Current Balance
5,580.80
220024991 Forest High School Credit Balance
(884,327.32)
220032576 Gauteng Legislature Credit Balance
(3,211,809.78)
501683132 Gauteng Prov Housing Adv Board Arrears
100,626.01
501236783 Gauteng Province-Housing Dev Brd Arrears
274,502.02
505717061 Gauteng Provincial Goverment Arrears
1,632,834.39
221276007 Gauteng Provincial Goverment Arrears
906,042.32
221192163 Gauteng Provincial Government Credit Balance
(97,621.28)
221283117 Gauteng Provincial Government Arrears
739,393.56
502046030 Gauteng Provincial Housing Adv Board Arrears
81,118.46
500306004 Gauteng Provincial Housing Adv Board Arrears
341,132.35
221087497 Gauteng Shared Service Centre Arrears 21,729,936.79
220078676 Gen,Christiaan De Wet Skool Current Balance
5,188.47
220057299 Greyville Primary School Arrears
70,290.62
220052090 Highlands North Boys High Arrears
73,758.61
221087257 Hillbrow Hosp,(Old General) Credit balance
(3,783,989.38)
220025000 Hoerskool Die Fakkel Fully Paid
-
220056954 Hospital Hill Police Station Move Out
-
205336033 Houghton School Fully Paid
-
205758275 I H Harris Primary School Fully Paid
-
221141121 Igugulethu Primary School Arrears
16,247.79
220058944 Impala Crescent Primary Arrears
26,634.04
201001325 Ithute Primary School Arrears
5,060.73
553608175 Government Of The Gauteng Province Arrears
95,395.80
205597123 Jeppe High School For Boys Arrears
6,596.65
City Power Quarter 3 Final Report 106
Account No Account Name Status March
206693447 Jeppe High School For Boys Oribi Arrears
91,768.89
205766396 Jeppe High School-Sable House Arrears
28,518.03
220069512 Jeppe Police Station Arrears
350,326.46
206059255 Jhb Girls Prep Girls Arrears
47,655.61
206152550 Jhb Girls Preparatory School Arrears
736,217.79
220067096 John Mitchell School Fully Paid
-
400417818 Kammaland Kleuterskool Move Out
-
220091356 Kensington Secondary School Fully Paid
-
220048713 King Edward Vii School Arrears
129,642.36
220048706 King Edward Vii School Arrears
220,587.11
501725641 Kliptown High Credit balance
(33,488.17)
220061954 Kliptown Regional Court Pwd Arrears
192,379.50
206152494 Laerskool Kensington Arrears
14,542.18
221085179 Laerskool Piet Van Vuuren Arrears
9,995.83
220055559 Lancaster Primary Arrears
62,358.06
501669836 Lanceavale Sekondere Skool Move Out
-
220055245 Libra Primary School Credit balance
(5,174.40)
220056986 Ls Modise Credit balance
(38,702.76)
220092173 Malvern High School Current Balance
69,073.86
206042195 Malvern Laerskool Distr 3 Arrears
13,774.20
201001702 Mc Weiler Primary School Arrears
199,198.34
220058479 Myntering Buro Pwd Credit Balance
(37,601.96)
221317084 National Department Of Public Works Arrears
139,399.85
221442060 National Department Of Public Works Arrears
61,742.90
221019218 National Department Of Public Works Arrears
298,134.92
221387003 National Dept Of Public Works Arrears
455,288.94
501727439 National Government Of The Republic
Of S Arrears
77,424.72
205276975 Norwood Primary School Arrears
351,259.73
220004811 Nuwe Landros Gebou Arrears
722,695.90
220017433 Nuwe Rekenings Gebou-Sars Arrears
1,429,490.99
553044973 Oakdale Secondary Move Out
-
City Power Quarter 3 Final Report 107
Account No Account Name Status March
205772914 Observatory Girls Prim School Arrears
69,594.02
205494155 Observatory Girls Prim School Arrears
10,860.77
501995519 Onderwys Hulp Sentrum Suidrand Arrears
44,341.63
220093787 Openbare Werke En Grondsake Arrears
878,699.41
220006865 P W D Werkswinkel & Store Credit Balance
(905,301.61)
502245364 Parkdale Laerskool Credit Balance
(13,270.53)
220058550 Pneumoconiosis Research Pwd Arrears
343,229.82
220025018 Preprimere Skool Die Mossie Credit Balance
(115,400.00)
300084594 Primere Skool Roodepoort Arrears
69,338.71
400358552 Provincial Government Credit Balance
(2,522,802.31)
220058969 Provincial Government Credit Balance
(9,690.36)
220008439 Provincial Government Current Balance
74,016.80
550374313 Provincial Government Current Balance
171,315.43
550851301 Provincial Government Arrears
391,779.20
550804654 Public Works Department Current Balance
14,112.66
554263558 Public Works Department Arrears
225,510.50
220004970 Pwd Current Balance
100,983.19
220069777 Queens High School Hostel Arrears
1,929,386.52
550980226 Bryneven Primary Scholl Current Balance
70,380.10
220079334 R S A Dept Of Public Roads Att: Stella Arrears
113,360.71
401917933 R S A Hoofdirektoraat Werke Credit Balance
(22,453.49)
403314458 R S A Hoofdirektoraat Werke Arrears
211,641.96
552626414 R S A Hoofdirektoraat Werke Arrears
972,740.65
403314306 R S A Hoofdirektoraat Werke Arrears
485,451.24
403337173 R S A Hoofdirektoraat Werke Move Out
307,914.08
554630906 R S A Openbarewerke&Grondsake Arrears
122,754.66
220078845 R S A Openbarewerke&Grondsake Arrears
220,352.06
220042510 R S A Public Works Current Balance
4,304.91
220035859 R S A Public Works & Land Arrears
10,740.60
401808758 R S A Public Works & Land Credit balance
(3,584.40)
401886160 R S A Public Works & Land Arrears
444,800.13
City Power Quarter 3 Final Report 108
Account No Account Name Status March
221085411 R S A Tod Sentraal Rand Stre Arrears
853,812.09
500279826 Raad Van Verteenwoordigers Arrears
271,016.50
220079398 Randburg Home Affairs Arrears
216,342.76
220071945 Republic Of South Africa Current Balance
1,062,474.73
502211654 Republic Of South Africa Arrears
46,315.58
205627875 Republic Of South Africa Arrears
1,423,041.56
403307073 Republic Of South Africa Current Balance
21,698.26
500315432 Republic Of South Africa Credit balance
(256,424.01)
207069714 Republic Of South Africa Arrears
59,715.66
504845159 Republic Of South Africa Arrears
65,730.33
502211799 Republic Of South Africa Credit balance
(14,586.09)
403304403 Republic Of South Africa Move Out
79,169.69
400692451 Republic Of South Africa Arrears
59,692.57
205595052 Republic Of South Africa Arrears
264,480.03
400183327 Republic Of South Africa Move Out
306,118.39
403304308 Republic Of South Africa Move Out
58,039.24
401762454 Republiek Van Suid-Afrika Move Out
174,264.51
552552071 The Provincial Government Of Gauteng Arrears
892,300.31
401762976 Republiek Van Suid-Afrika Credit balance
(5,678.23)
206530918 Rosebank Primary School Arrears
103,857.22
220028957 S A Police Station Honeydew Arrears
48,003.76
220091388 Sa Defence Queens High Arrears
604,039.42
220057098 Sa Nevhuhulwi Credit balance
(7,656.70)
220080386 Sa Police Flats (Triomf) Arrears
150,842.24
221087401 Sa,Police Eldorado Park Arrears
101,014.41
220007153 Sap Barrakke Mainweg Arrears
1,206,660.56
220072040 Sap Brixton (Moord / Roof Afd) Arrears
299,788.58
220062242 Sap Cleveland P W D Move Out
-
501416419 Sap Mondeor Arrears
5,988.94
220028435 Sap Motor Werkwinkel Arrears
369,615.05
220078806 Sap Radio Station Arrears
137,975.34
City Power Quarter 3 Final Report 109
Account No Account Name Status March
206516039 Sap Rosebank Arrears
109,839.95
220057010 Sap Sam Hancock Credit Balance
(14,115.11)
220057027 Sap Sam Hancock Credit Balance
(131,381.39)
220057002 Sap Sam Hancock Str Credit Balance
(1,639.50)
220056993 Sap Sam Hancock Str Credit Balance
(34,653.51)
220057066 Sap Sam Hancock Str (Pwd) Credit Balance
(3,473.26)
220057080 Sap Sam Hancock Str (Pwd) Arrears
421,012.31
220033682 Sap Station Booysens Arrears
127,964.48
220933683 Sap Station Booysens Arrears
4,039.86
220093804 Sap Wynberg Credit Balance
(789,396.33)
206037653 Sap Yeoville Arrears
129,319.62
206379784 Saps Arrears
71,520.55
900204430 Saps Sateliet Stasie Credit Balance
(143,634.26)
206152254 Sir Edmund Hillary Prim School Current Balance
20,390.79
221092105 Sizwe Tropical Disease Hospital Arrears
1,359,474.46
201001212 Skeen Lp School Move Out
-
505294698 Someluwazi Primary School Credit Balance
(107,738.64)
220079197 Sophiatown S,A,P,S Arrears
196,154.64
220017137 South Rand Hospital Arrears
3,254,220.06
220055421 Southview Secondary School Arrears
62,672.81
500315344 Spektrum Laerskool X 5 Arrears
13,053.84
220044959 Tandheelkundigediens Arrears
109,889.29
220058937 Trinity Secondary School Arrears
74,856.71
301121811 Unified Primary School Arrears
2,931.39
400605890 Wilhelmina Hoskins Laerskool Arrears
68,114.28
220061023 Willow Crescent Hoerskool Arrears
51,513.35
48,637,646.98
Interventions to collect
The accounts with no queries are forwarded to Logistics to implement credit control action (effect
disconnection process).
A forum has been established between RSSC, City Power and the government departments to discuss the issues
that are hindering collection. No meetings were held as yet. However, queries are managed as and when they
are received.
City Power Quarter 3 Final Report 110
CHAPTER 4: HUMAN RESOURCE AND TRANSFORMATION
The strategic intent of City Power includes ensuring that the business performs in a stable nurturing environment
that is conducive to the achievement of its objectives, whilst building an exceptional workforce of competent
and committed people who provide leadership and advocacy for our organization.
In order to enable this, City Power has defined five human capital strategic levers (Capacity, Capability,
Commitment, Compliance and Continuity) thus aligning the people strategy with the City Power strategy and
current realities . For City Power, talent is the number one impediment or success factor in executing an
organizational strategy.
Diagram 3: Human Capital Strategic Pillars
The Group’s priorities for the financial year as outlined in the business plan and the Group’s operational plan
are reflected within the respective human capital strategic pillars, and therefore the structure of this section of
the report is aligned to the human capital strategic pillars.
We are pleased to report on the following achievements for the reporting period:
Finalisation of the CEO recruitment process
Positive Auditor General outcomes
4.1 High Level Organisational Structure Review
The South African Government is responsible for the sustainable growth and development of the country. One of
its major responsibilities is to ensure that all service beneficiaries have access to and receive the services they need.
The manner in which governmental institutions are structured has an impact on how effectively these institutions
can deliver services to service beneficiaries. Therefore, City Power requires an effective organisational structure, to
deliver on its mandate and on the priorities set by the Government. In practical terms, this means that an effective
organisational structure:
Is necessary to implement the strategic plan. If the structure is not aligned with the strategic plan of City
Power, City Power is not likely to achieve its objectives;
Is necessary for effective service delivery. Structures are the vehicles through which services are delivered;
Can assist with efficiency and optimal utilisation of resources. The structure of City Power can influence how
the financial and human resources are allocated and used;
Is necessary for officials’ morale. The way in which City Power is structured will influence the morale, energy
and enthusiasm of the officials; and
Can assist in fostering the appropriate organisational culture for delivering on the mandate and strategic
priorities.
The City Power Delegation of Authority defines the approval levels for the organisation structure with the high level
organisation structure that is recommended by the CEO and approved by the Board and the detailed organisation
structure that is approved by the CEO based on engagements with organized labour. As such, the HR & T group
tabled the high-level organisation structure at the Social, Ethics and HR Committee in October 2020. Subsequently,
Strategic Lever Description
Create
Capacity
To create an environment where City Power has the right number of people, working in the right place, at the right time to enable City
Power’s mandate and respond to changing realities
Build
Capability
To ensure that the City Power people have the right knowledge, skills and attitudes to perform at the right level of competency in their
jobs enabling the business of today and that of tomorrow
Empower
for Commitment
To design and deliver a leadership brand and an employee value proposition that drives employee engagement and cultural
transformation
Boost
Compliance To enable adherence to transformation imperatives, employment regulations and organisational directives
Enable
Continuity
To enable employee wellbeing and business continuity City Power is required build the organisational capability to navigate the
disruptions happening in both the workforce, society and the business.
Strategic
success
Strategic
directives
Strategy execution
Create
Capacity
Build
Capability
Empower
for
Commitment
Boost
Compliance
Enable
Continuity
City Power Quarter 3 Final Report 111
on 5 November 2020 the Board approved the high level structure for implementation. The diagram below illustrates
the approved high level organisation structure.
Diagram 4: City Power High Level Organizational Structure
4.2 Create Capacity
This strategic lever aims to create an environment where City Power has the right number of people, working in the
right place, at the right time to enable City Power’s growth strategy. The programmes planned for the year will
enable appropriate staffing and optimal use of the workforce. From the beginning of the financial year to date,
emphasis has been on the organizational structure design.
4.2.1 Talent Acquisition Programme
The talent acquisition programme is made up of several initiatives which include managing the vacancy rate, rolling
out the recruitment plan, internal promotions and external appointments which inversely address the average
number of days it has taken to fill critical vacancies, as well as the acting appointments.
Significant progress has been made with regards to reducing the number of acting appointments from 145 in
January 2020 to a current 24 (manager and above). As part of the regularization of the acting appointment
process, the level of compliance has also improved in that where rotation is possible rotation has been
implemented, where it was not practically possible to rotate the necessary approval was sought and secured.
4.2.2 Vacancy Rate
The targeted vacancy rate for the year is 12%. The performance as at the end of the quarter 3 (January 2021 -
March 2021) displays a vacancy rate of 14.87%, which is above the target. In comparison to the previous quarter
the vacancy rate has also shown an increase. This is attributable to the following reasons: retirements, resignations,
death, no external appointments.
The table below displays vacancy rate to as at end of Quarter 3 (31 March 2021)
Quarter 1 Quarter 2 Quarter 3
Staff Establishment 1984 1984 1984
Staff Complement 1691 1708 1689
Vacancies 293 276 293
Vacancy Rate % 14.77% 13.91% 14.87%
Target% 12% 12% 12%
Variance 2.77% 1.91% 2.87%
Table 1: Vacancy rate
CEO
Chief Operating
Officer
Retail
Executive
Strategic Assets
Development
Executive
Engineering Operations
ExecutiveChief Financial
Officer
Human Resources
and
Transformation
Executive
Chief Information
Officer
Chief Legal
Counsel
Company Secretary
Chief Audit
Executive
Strategy and
Business
Development
Executive
City Power Quarter 3 Final Report 112
The recruitment plan is therefore intended to address the vacancy rate and bring it to the acceptable level and
target on the one hand, but primarily to create capacity on the other by using different recruitment channels to fill
the capacity gaps. It must be noted that, through the assistance of the GIT programme, 9 GIT’s were on-boarded
to 2 Departments, to assist with required services.
4.2.3 Staff Cost Vs Total OPEX
The target for total staff cost as a % of total Operating Expenditure is set at 25%.
Quarter 1 Quarter 2 Quarter 3 YTD – Actual
Total Staff Cost R323 057 608,00 R336 058 392,00 R326 643 810,00 R985 759 613,00
Total OPEX R1 219 355 415,00 R1 161 870 585,00 R1 318 861,34 R3 700 087 684,00
% of Staff cost to
OPEX
26,49% 28,92% 28,11% 26,64%
Target % 25% 25% 25% 25%
Variance % -1,49% -3,92% -3,11% -1.64%
Table 2: Total Employee Cost as a % of total Opex
Cost of overtime however, remains a major contributing factor to the high employee cost and overtime must,
however, be managed to:
reduce the amount spent on overtime; and
reduce the overtime hours in line with the BCEA.
The 2020/21 overtime budget versus the employee cost budget is as follows:
Element 2020/21 Budget
Overtime R132,836,176.15
Staff Cost R1,337,771,201.88
Overtime as a % of Staff Cost 9.93%
Table3: 2020/21 overtime budget versus the employee cost budget
The overtime actuals for the Quarter 3 are depicted in the table below: The final figures for Quarter 3 will be
available by the 7th of April 2021. The figures below for Quarter 3 include the months of January and February 2021.
Quarter 1 Quarter 2 Quarter 3 YTD - Actual
Total Overtime R26 902 143,25 R31 606 259,13 R28 964 812,40 R87 473 214,78
Total Staff
Cost
R323 057 608,00 R336 058 392,00 R326 643 810,00 R985 759 613,00
% of Overtime
to Staff Cost
8,33% 9,40% 8,87% 8,87%
Target % 9,93% 9,93% 9,93% 9,93%
Variance % 1,06% 0,53% 1,06% 1,06%
Table 4: Overtime Actuals for Quarter 3
The above table depicts that the cost of overtime has been kept below the target, which means that measures
taken to keep overtime to an acceptable level as per set target, are yielding positive results.
City Power Quarter 3 Final Report 113
4.3 Build Capability
This strategic lever aims to ensure that the City Power people have the right knowledge, skills and attitudes to
perform at the right level of competency in their jobs consistent with the organisation’s strategic objectives The
capability building focus areas for this period include:
Strategy cascade and performance development,
Leadership development programme targeted at CEO, GEs, GMs, managers and team leaders,
Learning curriculum publication,
On-line learning interventions partnerships,
Building best in class and accredited learning facilities.
For quarter 3, the following can be reported
4.3.1 Skills Development
The key output for this pillar is Skills Development through various interventions provided by City Power and its
partnerships with the learning institutions.
City Power is expected to spend 1% of its payroll expenditure to skills development as per the above mentioned
KPI. The table below displays an overview of total investment in skills development as a percentage to payroll for
quarter 3.
Quarter 1 Quarter 2 Quarter 3
Learning R2 730 755,12 R2 358 161,19 R3 123 462,08
Payroll R258 246 092,00 R266 889 817,00 R302 980 652,64
Percentage 1,06% 0,88% 1,03%
Target % 1% 1% 1%
Variance 0,6 -0,12 0,03%
Table 5: Skills development spend as a percentage to payroll
Although we can see a decline in quarter 2 as a result of the holiday season, the target for quarter 3 has been
achieved with the movement from 0,88 to 1,03.
The learning expenditure displayed for the quarter, is as the result of the skills investment through the various training
interventions as per tables below:
Further Studies Number of employees
Certificates 19
Higher Certificates 2
Diploma 6
National Diploma 1
Advanced Diploma 4
B-Degrees / B-Tech 18
Post Graduate Diploma 11
Honours Degree 3
Master’s Degree 3
Municipal Executive Financial Programme 0
TOTAL 67
BUDGET SPENT R 1 462 489,53
Table 6: Further studies
City Power Quarter 3 Final Report 114
Mandatory Training Number of employees
First Aid 38
Firefighting 39
SHEQ 0
Scaffolding 40
Stacking & Storing 12
Signage & Barricading 38
Truck Mounted Crane 0
Counter Balance Lift Truck 0
Rigging & Swinging 45
Cherry Picker 0
Overhead Crane 50
COVID_19 Work Place Preparedness 0
TOTAL 262
BUDGET SPENT R 617 019.00
Table 7: Mandatory Training
Emergency Labour
Contractors Training
(Electrical Access and Safety)
Labour Contracts Contract employees trained
Total Employees attended
training 95
528
Table 8: Technical Training for Contractors
ORHVS (1-10) for City Power Employees Number of employees
Total Employees attended training 25
Table 9: Technical Training for City Power Employees
All Other Functional Training Number of employees
Total Employees attended training 165
BUDGET SPENT R 1 043 953,50
Table 9: All other Functional Training
In addition, one of the highlights for the quarter, was the commencement of the Socio Economic Development
Programme, which attracted just over 6000 applications. This is part of youth skills development programme
increasing sustainable employment for youth and subsequently assisting youth to be work ready. The process
continues into the next quarter with assessments and further shortlisting activities until it is concluded with the
required target/requirements for youth intake.
City Power Quarter 3 Final Report 115
4.4 Empower for Commitment
This strategic lever aims to design and deliver a leadership brand and an employee value proposition that drives
employee engagement and cultural transformation. The commitment development programmes enable
employee care and advocacy as a catalyst for employees giving of their time and energy.
The commitment development programmes enable employee care and advocacy as a catalyst for employees
giving of their time and energy. In support of the above programmes, The Change Agent Network (CAN) falls within
the I_AM_IN programme with change agents that represent all departments and help drive the communication
and adoption of change at all levels.
In this quarter, the GIT’s were inducted through a one-day training programme with one of the partnered learning
institutions. In addition to the deliverables, communication of the new high level approved structure and the next
steps with Change Agents as well as the Top 50 was conducted.
4.4.1 Employment Equity and Affirmative Action Plans and Programmes
As a designated employer, City Power is fully committed to complying with the Employment Equity Act (EEA) 55 of
1998, as amended. The employment equity figures as 31 March are as follows:
Staff Establishment Filled Positions Affirmative Action Gender Equity People with
Disabilities
Target Achieved
Target Achieved Target Achieved
1,984 1689 85% 93,37%
29% 33,10% 2% 3,14%
Table 10: Employment equity figures as at 31 March 2021
To ensure compliance with the Employment Equity Act and to maintain the achievement of the set targets, the
annual recruitment plan always incorporates the EE targets. City Power has therefore to date, achieved and
complied with the EE targets as per the Employment Equity Act (EEA) 55 of 1998.
4.5 Boosting Compliance
This strategic lever aims to enable adherence to transformation imperatives, employment regulations and
organisational directives. Capacity development programmes must enable appropriate staffing and optimal use
of the workforce adherence to transformation imperatives, employment regulations and organisational directives.
It is also intended to embed a culture of accountability in order drive behaviour/conduct that is informed by the
City Power policy environment, regulatory and legislative prescripts. For quarter 3, the following can be noted:
4.5.1 Audit, Risk and Compliance
The below diagram displays update and movement of the group’s performance on the 3 areas of governance
being, Audit, Risk and Compliance.
Diagram 5: Movement of outstanding Audit – Risk and Compliance matters
Opening Balance01 Jul 2020
Quarter 1 Quarter 2 Quarter 3
Audit 14 10 7 4
Compliance 2 2 2 3
Risk Treatments (under 85%) 3 3 1 1
02468
10121416
Ou
tsta
nd
ing
Mat
ters
Area of Focus
Movement on Governance Outstanding Matters
Audit Compliance Risk Treatments (under 85%)
City Power Quarter 3 Final Report 116
Internal Audit: To date the group has a total of 4 unresolved findings, of which 3 are anticipated to be resolved
before end of April by communicating reviewed policies while the recruitment plan remains in progress with the
target of 30 June 2021,
Auditor General: The 2019-20FY Auditor General review process resulted in 2 new findings for the group.
Management has subsequently responded to the findings and provided reasonable assurance that findings have
been resolved through immediate corrective actions.
Compliance: Compliance audit was conducted in Quarter 3, which resulted in 3 new findings. These are in progress
and anticipated to be resolved before the end of the next quarter.
Risk Treatment Plans: The only treatment plan below 85% is one that addresses the root cause “limited career and
succession management”. Implementation of the career management framework should commence once all
engagements have been concluded with the relevant stakeholders. The rest of the treatment plans are above 85%
which display the risk has been monitored and reached an acceptable level of tolerance. Engagement are
underway to review the Human Resources and Transformation risk in-line with organisational developments.
4.6 Employee Relations
No formal LLF took place during Quarter 3, however a workshop session which focused on communication of the
reviewed policies with organised labour took place in March 2021.
City Power recorded a total number of 3 new disciplinary cases with the following current status:
Case Number Case Status
1. Work in progress
2. Finalised with a written warning (within the 90-day period)
3. Finalised with termination of employment (within the 90-day period)
Performance for the current period therefore displays achievement of the set targets (resolving cases within 90
days) which ultimately has positive impact to productivity.
Year to date (July 2020 – March 2021) Summary:
6x new disciplinary cases recorded,
4x finalised
2x work in progress.
Balance brought forward - Recorded in previous financial years (finalised and in progress during FY2020/21)
1x Dispute - retired during Feb 2021
1x Dispute (Sec 288A process)
1x withdrawn
1x finalised with termination of services 23 Nov 2020
1x work in progress
4.7 Enabling Continuity
This strategic lever aims to enable employee wellbeing and business continuity, as such City Power is required build
the organisational capability to navigate the disruptions happening in both the workforce, society and the business.
4.7.1 Employee Wellness Programme
The wellbeing and emotional resilience of employees are key components of maintaining essential services during
the COVID-19 virus outbreak. The table below was developed with the purpose of tracking and monitoring the
impact of COVID-19 outbreak within the organisation.
For quarter 3, the table displays current statistics in comparison to the previous quarter.
No. Item As at end of Quarter 2 As at end of Quarter 3
1 Total number of employees 1 708 1 689
2 High risk pregnancies declared 03 02
City Power Quarter 3 Final Report 117
No. Item As at end of Quarter 2 As at end of Quarter 3
3 High risk above 60 163 165
4 High risk with other Comorbidities
declared
241 246
5 Screening Conducted 5765 10696
6 Tests Conducted 381 446
7 Total Positive Cases 111 149
8 Active Cases (Isolation) 05 04
9 Contacts Traced (Quarantined) 355 360
10 Total Recoveries 104 143
11 Total COIDA Cases 39 41
12 Total Death 2 2
13 Re integrations Services 182 200
14 Teletherapy 423 474
15 Group Debriefing 15 15
16 Referral to a Psychologist 19 19
Table 11: COVID-19 statistics
The below table highlights screening per group for the quarter to date in comparison to previous quarters.
Group Phase 01
Screening
Phase 02 Screening
(June-Dec 2020)
Prev Quarters
Phase 02 Screening
Jan – March 2021
Total
Engineering Ops 364 2920 2024 5308
Engineering
Services
99 55 18 172
Metering 32 41 24 97
Finance 15 14 11 40
Business
Sustainability
0 19 0 19
Office of the
CEO
0 5 6 11
HR & T 40 961 293 1294
Enterprise
Support
35 1165 620 1820
Total 585 5180 2996 8761
Table 12: Screening Conducted per Group
With the anticipated third wave as per news reports, efforts to continue with adhering to the safety requirements
remain in place across the business, as well as supporting the business with all COVID-19 preventative measures
and related protocols.
City Power Quarter 3 Final Report 118
4.8 Employee Assistance Programme
The below table displays the Non COVID-19 EAP support services provided during Quarter 3:
No. Item Quarter 2 Quarter 3
1 Work Stress 3 4
2 Family related challenges 10 16
3 Financial 8 5
4 Bereavement 3 17
5 Relationship/Marital 7 13
6 Alcohol 3 0
7 Referral to Psychologist 4 0
Table 13: NON COVID-19 support services
Conclusion
While the organisation continued to operate under COVID-19 regulations and restrictions, Human Resources and
Transformation has managed to drive the organisation towards leadership stability through the finalisation of the
CEO appointment.
The overall performance for the Group displays alignment to the FY2020/21 operational plan. Improvement and
achievement of performance is noted in areas such as: Employment Equity, skills development, resolution of audit
findings, Risk and Compliance matters, continued wellness and EAP support to employees, Implementation of the
high-level structure, reduction of overtime costs (major contributing factor to high staff costs).
HUMAN RESOURCES AND TRANSFORMATION (QUARTER 3 REPORT) JAN ‘21 – MARCH ‘21
City Power Quarter 3 Final Report 119
CHAPTER 5: FINANCIAL PERFORMANCE
5.1. Highlights and Lowlights
Highlights Lowlights
Quarterly
Overdraft reduced by R303 million against
previous quarter
Overdraft R5.3 billion
Gross Margin increase with R116 million against
previous quarter
Service Charges below budget by 10%
Expenditure below budget by 1%
YTD
Loss of R554 million against a budgeted profit of R160 million
Overdraft of R5.3 billion
Revenue shortfall of R821 million
Overdraft increased by R1.2 bn against previous year
5.2. Statement of Financial Performance and high-level notes
FY 2020/21 Q3 vs FY 2019/20 Q3 results
The dashboard below presents the results for Q3 of 2020/21 with the actual results for Q3 of 2019/20 alongside.
Compare to the prior year performance
the net profit margin decreased by 5.7%
from 9.63% to 3.96% a decrease of 60%.
Service charges reflect a decrease of 2.7%
against the prior year third quarter.
Expenses however has shown an increase
of 2.8% against the third quarter of 2019/20
Net profit shows a 60.2% decrease compare to the same period last year.
The cash position however, reflect a 28.5% decline against the same period last year.
Net profit Margin %
4.0%-5.7%
Service Charges Expenses
Net Profit Bank Overdraft
153,201 -5,254,051
3,731,703 -3,714,306
-2.7% 2.8%
-60.2% -28.5%
vs. previous year Q3 vs. previous year Q3
vs. previous Year Q3 vs. previous year Q3
City Power Quarter 3 Final Report 120
Current quarter performance as measured by the surplus before tax has shown a decrease of R232 million from a
surplus of R385 million in Q3 2019 /20 to a surplus of R153 million in Q3 2020/21.
Revenue for 2020/21 3rd quarter of R3.9 billion is R132 million less than the 3rd quarter of the previous year. 2020/21
quarterly expenditure of R3.7 billion is R100 million more than the same period last year which was R3.6 billion.
Figures in Rand thousand Variance Variance Variance Variance
Actual Actual % Actual Budget %
2021 2020
Revenue 3,867,506 3,999,806 -132,300 -3% 3,867,506 4,378,088 -510,582 -12%
Service charges 3,731,703 3,837,073 -105,370 -3% 3,731,703 4,141,977 -410,274 -10%
Other income 34,551 45,610 -11,059 -24% 34,551 65,073 -30,522 -47%
Capital Grant 1,098 15,052 -13,954 -93% 1,098 36,860 -35,762 -97%
Interest revenue - debtors 12,576 12,524 52 0% 12,576 9,833 2,743 28%
Capital Contribution 83,001 89,403 -6,401 -7% 83,001 124,217 -41,216 -33%
Rental income 172 144 28 19% 172 128 44 34%
Interest revenue - sweeping account 4,405 0 4,405 N/A 4,405 0 4,405 N/A
Expenditure 3,714,306 3,614,515 99,791 3% 3,714,306 3,734,804 -20,499 -1%
Bulk purchases Eskom 2,059,892 2,133,882 -73,990 -3% 2,059,892 2,183,056 -123,164 -6%
Bulk purchases Kelvin 335,553 245,714 89,839 37% 335,553 324,174 11,379 4%
Debt impairment 314,733 158,140 156,594 0% 314,733 101,927 212,806 209%
General expenses 44,780 52,690 -7,910 -15% 44,780 68,727 -23,947 -35%
Contracted Services 64,369 38,825 25,544 66% 64,369 74,807 -10,438 -14%
Personnel costs 326,644 323,387 3,257 1% 326,644 335,445 -8,801 -3%
Interest paid - sweeping account 53,994 61,675 -7,681 - 53,994 53,395 599 -
Finance costs 73,784 83,830 -10,046 -12% 73,784 74,357 -573 -1%
Repairs & maintenance 224,335 257,310 -32,975 -13% 224,335 273,552 -49,217 -18%
Internal Charges(ME's) 66,499 96,390 -29,891 -31% 66,499 105,341 -38,842 -37%
Depreciation & amortisation 149,722 162,673 -12,951 -8% 149,722 140,023 9,699 7%
Surplust before taxation 153,201 385,291 -232,091 -60% 153,201 643,284 -490,083 76%
Quarter 3 Quarter 3 (2021)
City Power Quarter 3 Final Report 121
The dashboard below presents the comparison of the results for Q2 and Q3 for the 2020/21 financial year.
Net profit margin % decreased by 10.7% compare to the previous quarter.
Service charges shows a decrease of 2.8% against the previous quarter.
Expenses showed a decrease of 1.7% against the previous quarter.
Net profit reflect a 16.2% decrease against the previous quarter.
Cash position reflect a positive increase of 5.4%.
Statement
3,731,703 -3,714,306
Net Profit Cash
153,201 -5,254,051
Service Charges Expenses
-2.8% -1.7%
-16.2% 5.4%
vs. previous quarter vs. previous quarter
vs. previous quarter vs. previous quarter
Net profit Margin %
4.0%-10.7%
City Power Quarter 3 Final Report 122
Figures in Rand thousand Variance Variance Variance Variance Variance Variance
Actual Budget % Actual Budget % Actual Budget %
Revenue 4,693,495 4,699,182 -5,687 0% 3,961,798 4,266,252 -304,454 -7% 3,867,506 4,378,088 -510,582 -12%
Service charges 4,535,665 4,558,898 -23,233 -1% 3,837,326 4,060,968 -223,641 -6% 3,731,703 4,141,977 -410,274 -10%
Other income 30,087 65,323 -35,235 -54% 21,539 65,323 -43,784 -67% 34,551 65,073 -30,522 -47%
Capital Grant 6,606 20,000 -13,394 -67% 9,876 30,000 -20,124 -67% 1,098 36,860 -35,762 -97%
Interest revenue - debtors 24,436 9,833 14,603 149% 10,352 9,833 519 5% 12,576 9,833 2,743 28%
Capital Contribution 93,614 45,000 48,614 108% 78,875 100,000 -21,125 -21% 83,001 124,217 -41,216 -33%
Rental income 149 128 21 16% 149 128 21 16% 172 128 44 34%
Interest revenue - sweeping account 2,938 0 2,938 N/A 3,681 0 3,681 N/A 4,405 0 4,405 N/A
Expenditure 5,583,195 5,588,407 -5,212 0% 3,778,918 3,860,206 -81,288 -2% 3,714,306 3,734,804 -20,499 -1%
Bulk purchases Eskom 3,757,586 3,853,775 -96,189 -2% 2,232,526 2,302,921 -70,395 -3% 2,059,892 2,183,056 -123,164 -6%
Bulk purchases Kelvin 606,254 486,968 119,286 24% 384,521 324,559 59,962 18% 335,553 324,174 11,379 4%
Debt impairment 250,376 136,767 113,609 83% 155,220 121,829 33,391 27% 314,733 101,927 212,806 209%
General expenses 32,044 68,729 -36,685 -53% 42,542 68,729 -26,187 -38% 44,780 68,727 -23,947 -35%
Contracted Services 44,514 64,557 -20,043 -31% 65,223 64,557 666 1% 64,369 74,807 -10,438 -14%
Personnel costs 323,057 334,443 -11,385 -3% 336,058 334,443 1,616 0% 326,644 335,445 -8,801 -3%
Interest paid - sweeping account 36,000 53,395 -17,395 - 70,838 53,395 17,443 - 53,994 53,395 599 -
Finance costs 78,814 74,357 4,457 6% 77,630 74,357 3,273 4% 73,784 74,357 -573 -1%
Repairs & maintenance 238,044 271,052 -33,008 -12% 189,719 271,052 -81,334 -30% 224,335 273,552 -49,217 -18%
Internal Charges(ME's) 70,509 104,341 -33,832 -32% 70,811 104,341 -33,530 -32% 66,499 105,341 -38,842 -37%
Depreciation & amortisation 145,997 140,023 5,974 4% 153,830 140,023 13,807 10% 149,722 140,023 9,699 7%
Surplus before taxation -889,701 -889,226 -475 0% 182,880 406,046 -223,165 55% 153,201 643,284 -490,083 76%
Quarter 1 (2021) Quarter 2 (2021) Quarter 3 (2021)
City Power Quarter 3 Final Report 123
There is a decrease in Service Charges compare to the first quarter and compare to quarter 2, this is as a
result of the change in seasonality. The first quarter represents the winter period, while the second quarter
present the summer season. There is a reduction in expenditure compare to the first quarter, as well as a
decrease in expenditure against the second quarter. There is a material improvement in the loss/surplus
between Q1 and Q2 by R1 073 million, but a decrease against quarter 2.
There is also an increase in the gross margin due to the seasonality. Bulk purchases tariffs are much cheaper
during summer months than winter months, while the unit price for sales are the same for the full financial
period.
City Power Quarter 3 Final Report 124
The table below presents the year to date results for Q3 of 2020/21 with the actual results for Q3 of 2019/20
alongside.
The net profit margin reflect a negative 4.42% for the year, it is –2.9% lower than the same period of the
2019/20 financial year.
Service Charges reflect a 2.4% increase against the same period last year.
Expenses however, increased by 4.6% against the prior year
The net loss of R554 million is 193% higher from the prior year.
Cash is reflecting a 29% decline against the same period last year.
Statement
Service Charges Expenses
Net Profit/(Loss) Bank Overdraft
-553,620 -5,629,179
12,104,694 -13,076,419
2.4% 4.6%
-192.6% -28.5%
vs. previous year Q3 vs. previous year Q3
vs. previous Year Q3 vs. previous year Q3
Net profit/(loss) Margin %
-4.42%-2.9%
City Power Quarter 3 Final Report 125
Surplus
The loss for the year before tax amounts to R554 million against the budgeted profit of R160 million, this is an
improvement from the second quarter where the loss was R707 million.
Total revenue reflects a negative variance of R821 million, expenditure shows a positive variance of R107
million. The loss for the year to date translates to a negative variance of R714 million against the year to date
budget.
The loss of R554 million in 2020/21 financial year worsen by R364 million against the same period in the
2019/20 financial year.
Figures in Rand thousand Variance Variance Variance Variance
Actual Budget % Actual Budget %
Revenue 12,310,247 13,048,504 -738,257 -6% 12,522,799 13,343,521 -820,722 -6%
Service charges 11,817,069 12,419,109 -602,040 -5% 12,104,694 12,761,842 -657,148 -5%
Other income 140,638 169,473 -28,835 -17% 86,177 195,719 -109,542 -56%
Capital Grants 41,942 142,568 -100,626 -71% 17,580 86,860 -69,280 -80%
Interest revenue - debtors 33,223 28,475 4,748 17% 47,364 29,499 17,865 61%
Capital Contribution 276,942 288,513 -11,571 -4% 255,490 269,217 -13,727 -5%
Rental income 433 366 67 18% 470 385 85 22%
Interest revenue - sweeping account 0 0 - 0% 11,024 0 11,024 0%
Expenditure 12,499,439 12,874,420 -374,982 -3% 13,076,419 13,183,418 -106,999 -1%
Bulk purchases Eskom 7,892,946 7,949,013 -56,067 -1% 8,050,003 8,339,752 -289,749 -3%
Bulk purchases Kelvin 1,141,512 1,067,841 73,670 7% 1,326,328 1,135,701 190,627 17%
Debt impairment 344,094 419,477 -75,383 -18% 720,329 360,523 359,806 100%
General expenses 156,294 207,515 -51,221 -25% 119,366 206,185 -86,819 -42%
Contracted Services 127,617 214,412 -86,795 -40% 174,106 203,921 -29,816 -15%
Personnel costs 914,270 949,047 -34,777 -4% 985,760 1,004,330 -18,571 -2%
Interest paid - sweeping account 182,741 137,852 44,889 33% 160,833 160,185 648 0%
Finance costs 259,475 271,862 -12,387 -5% 230,228 223,070 7,157 3%
Repairs & maintenance 757,827 903,409 -145,583 -16% 652,098 815,657 -163,559 -20%
Internal Charges(ME's) 287,029 305,047 -18,018 -6% 207,819 314,023 -106,204 -34%
Depreciation & amortisation 435,635 448,944 -13,309 -3% 449,550 420,070 29,480 7%
Deficit before taxation -189,191 174,084 -363,275 209% -553,620 160,104 -713,723 446%
YTD (March 2020) YTD (March 2021)
City Power Quarter 3 Final Report 126
The reasons for the variances are set out below:
Service Charges
Service charges for the quarter is less by R410 million against the budget of R4.4 billion, due to the slow
improvement in the revenue management value chain contributions. The revenue management
initiatives have increased efficiencies as compared to prior financial year:
Service charges for YTD is R657 million less against the YTD budget of R12.8 billion, due to fewer kwh’s sold.
The below Revenue Management Initiatives have been implemented in order to increase revenue and
reduce non-technical losses in achieving Revenue Completeness and Accuracy.
Prepaid Project (Smart Meter Roll-out)
Unmatched Stands
Installation Audits
New Service Connections
Post Billing Process Optimization
Pre Billing Process Optimization
Alarms
Service Charges: 2019/20 and 2020/21 comparative performance (R'000)
Description Jul Aug Sep Oct Nov Dec Jan Feb Mar YTD
Actual 1,534,746 1,546,101 1,454,818 1,314,498 1,240,921 1,281,908 1,249,219 1,175,945 1,306,538 12,104,694
Budget 1,529,789 1,452,429 1,576,680 1,227,068 1,427,900 1,406,000 1,340,742 1,371,716 1,429,519 12,761,842
Description Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 YTD
Actual 1,416,076 1,506,246 1,298,545.95 1,156,846 1,300,786 1,301,497 1,241,089 1,229,905 1,366,079 11,817,069
Budget 1,722,321 1,662,756 1,486,526 1,350,707 1,386,970 1,247,207 1,196,708 1,327,516 1,038,396 12,419,109
City Power Quarter 3 Final Report 127
Quarterly Comparison 2019/2020
There is a decrease in sales in Quarter 3 as compared to Quarter 2, this is due to less units being sold.
Other Income:
Quarterly view
Other Income was R31 million less than the budget of R65 million for the quarter. This was due to the following:
Cut off fees are R9 million less than budget due to the less cut off’s made than expected.
Sundry revenue and sale of scrap for the quarter were also less than the budget by R5 million
New connections are less than the budget by R13 million due to a decrease in requests by
customers for new connections and upgrades in the current financial period. New connections
are a non-controllable budget item as the number of new applications or upgrades cannot be
determined during the budget process and is based on the prior year requests.
YTD view
Other income is R110 million less than the budget due to the following:
New connections are less than the budget by R55 million due to a decrease in requests by customers
for new connections and upgrades in the current financial period. New connections are a non-
controllable budget item as the number of new applications or upgrades cannot be determined
during the budget process and is based on the prior year requests.
Sundry revenue is less than the budget by R1 million as there were fewer insurance claims registered
than projected.
Cut off fees are less than the budget by R27 million due to fewer cut offs.
Skills development grant is less than the budget by R5 million due to the slow processing of grant claims.
Capital Grants
Quarterly view
Grants are less than budget by R36 million for the quarter, as fewer grants were received to date.
YTD view
Grants are less by R69 million against the year to date budget of R50 million, as fewer grants were received
to date.
City Power Quarter 3 Final Report 128
Interest revenue:
The YTD actuals is R18 million more than the year to date budget. This is mainly due to low payment levels
during the first three quarters of the year.
Capital Contributions:
DSM Levy for the quarter was lower than the budget of R124 million by R41 million as a result in less units
being sold.
The YTD Capital Contribution is less than the budget by R14 million. Capital contribution (which is the DSM
Levy) fluctuates in accordance with the units sold. Therefore, the higher the units sold, the higher the
capital contribution. Since the YTD actual units sold were less than the budgeted units, the actual capital
contribution was less than the budget.
OPERATING OVERHEADS:
For the quarter ending 31 March 2021, the operating expenditure budget is underspent by R20 million
against the quarterly budget of R3.7 billion and the year to date budget of R13.2 billion is underspent by
R107 million.
The reasons for the variances are set out below:
Bulk Purchases:
Bulk purchases Eskom is R123 million less than the budget for the quarter which was attributable to the fact
that the actual average purchase price was lower than budget and the volumes were also lower than
budgeted.
The YTD Eskom favourable variance of R290 million is attributable to actual bulk purchases volumes been
lower than budgeted, as well as the fact that the actual purchase price per unit was also below budget.
The Kelvin Power Station output has now been ramped down and will continue as such unit the over
expenditure has been clawed back. This will be completed early in quarter 4 (i.e. April 2021).
Bulk Purchases from Kelvin were R11 million more than the budget of R324 million for the quarter, as a result
of increased output during the summer period.
Eskom Purchases: 2019/20 and 2020/21 comparative performance (R'000)
Description Jul Aug Sep Oct Nov Dec Jan Feb Mar YTD
Actual 1,442,048 1,425,091 890,446 1,105,606 384,100 742,821 650,479 743,562 665,851 8,050,003
Budget 1,556,178 1,370,254 927,343 786,680 788,424 727,817 702,921 757,269 722,866 8,339,752
Description Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 YTD
Actual 1,397,105 1,098,056 1,018,915 762,643 762,754 719,591 716,479 688,518 728,884 7,892,946
Budget 1,548,148 1,471,969 953,068 726,352 740,093 603,522 553,926 744,712 607,223 7,949,013
City Power Quarter 3 Final Report 129
The YTD Kelvin Power Station unfavorable variance of R191 million is attributable to actual bulk purchases
volumes been higher than budgeted, as well as the fact that the actual purchase price per unit was above
budget. Kelvin Power Station output was maximized during the winter period due to its cost efficiency during
that period.
Quarterly comparison
There is a decrease in bulk purchases rand value in Quarter 3 as compare to Quarter 2. This is due to
seasonality as more electricity is purchased during winter when comparing monthly averages than the
summer season of the year.
Previous year comparison
The graph below presents a comparison of rand values of bulk purchases between 2020/21 and 2019/20
Kelvin Purchases: 2019/20 and 2020/21 comparative performance (R'000)
Description Jul Aug Sep Oct Nov Dec Jan Feb Mar YTD
Actual 241,414 206,400 158,440 136,743 131,037 116,741 99,817 117,812 117,924 1,326,328
Budget 186,325 186,797 113,846 116,515 102,820 105,224 106,149 99,666 118,358 1,135,701
Description Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 YTD
Actual 259,124 253,106 98,831 109,810 89,833 85,094 79,561 95,506 70,648 1,141,512
Budget 174,671 175,108 107,205 109,738 96,816 99,097 99,962 93,792 111,452 1,067,841
City Power Quarter 3 Final Report 130
Comparison of Rand Values
There has been a 3.8% increase in the rand value of bulk purchases compared to the prior year, which is
attributable to the increase in tariffs and decrease in units purchased.
Debt Impairment:
Debt Impairment is more than the budget for the quarter by R213 million. The debt impairment is based on
the payment level that decreased from the previous quarter.
The year to date expenditure is more than the budget of R360 million by R360 million. However, the collection
level improved in quarter 3 more debt was written off as during the third quarter as City Power collected
less than what was expected. As a result, the YTD debt impairment is more than the budget.
General Expenses:
R24 million less than budget of R69 million for the quarter and due to:
Staff Cost is R3 million less than the budget due to less training courses and conferences attended
by employees.
Software licences is less than the budget by R10 million for the quarter due to the fact that software
licences are paid annually while the budget is spread over the twelve-month period.
Stores & Material is R2 million less than budgeted for due to less material was utilised during the
period, and the re-evaluation of stock.
Telephone cost is R9 million less than budget due to employees working from home.
Cut off fees and meter audits expenses are more than the budget by R7 million due to more cut
offs and meter audits.
R87 million less than the YTD budget of R206 million due to:
Staff costs are less than the budget by R16 million due to less expenditure incurred on training
courses and conferences/seminars during the period under review.
Stores and materials are less than the budget by R14 million due to less reservation drawn on
consumable stores than planned.
Final check readings are less than the budget by R1 million as fewer check readings were done
to date than budgeted for.
Telecommunications is less than the budget by R46 million due to savings in software licenses and
mobile data communications. Software licences are paid annually and is not due yet.
City Power Quarter 3 Final Report 131
Cut off fees and meter audits expenses are more than the budget by R13 million due to more cut
offs and meter audits.
Contracted Services:
R10 million less than the budget of R75 million for the quarter due to the following:
Fleet cost is R7 million less than budget due to the decrease in the number of generators in the
field.
o Diesel and Petrol are less than the budget by R4 million due to the reduced deployment
of generators in areas where power had not been restored due to outages.
Meter reading fees is R4 million less than the budget due to a poor metering performance.
Commission paid is R4 million more than the budget due to posting of backlog journals for
vending commission on 3rd parties.
Consultant fees and professional fees are R5 million less than budget due to the decrease in the
usage of consultants during the quarter.
R30 million less than the budget of R204 million for the year to date due to the following:
Consultant fees and professional fees are R8 million less due to the slow utilization of consultants
in the year.
Fleet cost is R14 million less than budget due to the decrease in the number of generators in the
field.
o Fleet lease is less than the budget by R5 million due to the reduced deployment of
generators in areas where power had not been restored. As a result, diesel and petrol
is also less than the budget by R8 million. Maintenance on vehicles are R4 million more
than budget.
Meter reading fees is R9 million less than the budget due to a poor metering performance.
Commission paid is R3 million less than the budget due to less customers making use of third
party vending payments.
Personnel Cost:
R9 million less than the budget of R335 million for the quarter due to the following:
Bursary grant is less than the budget by R1 million as bursaries are mainly paid during the
registration period which is usually in two intervals within a year.
Leave encashment is less than the budget by R7 million.
Basic salaries are less than the budget by R4 million mainly due to delays in the replacement of
vacant positions during the quarter.
Overtime is more than the budget by R5 million due to employees working mores hours as result
of increased outages.
R19 million less than the budget of R1 billion for the year to date due to the following:
Overtime is less than the budget by R4 million due to employees working less hours as result of
covid-19 impact.
Bursary grant is less than the budget by R4 million as bursaries are mainly paid during the
registration period which is usually in two intervals within a year.
Leave encashment is less than budget by R6 million.
Acting allowances are R3 million less than budget, as a result of filling of vacancies.
Basic salaries are more than the budget by R5 million mainly due to improvement in the
replacement of vacant positions.
Interest paid – sweeping account:
Interest paid on the bank account is due to the overdraft on the Standard Bank accounts.
City Power Quarter 3 Final Report 132
Finance cost:
Finance cost is R1 million less than budget of R74 million for the quarter due to interest payable
decreased as loans was received later during the quarter than budget. Interest is payable as soon as
the loan is received.
The YTD actuals are R7 million more than the budget to date of R223 million due to interest payable
increased as loans was received earlier than budget. Interest is payable as soon as the loan is received.
Repairs and Maintenance:
R49 million less than the budget of R274 million for the quarter and R164 million less than the budget of R816
million for the year to date due to the following:
The accelerations in implementation of planned outages programme for corrective
maintenance by Engineering Operations.
The process of securing meter maintenance contracts for Metering Services and ICT system
related contracts for Enterprise Support being underway.
The Scada & Telecoms bids were both cancelled at BAC due to ambiguity on the criteria and
are currently out on tender again and at evaluation stage, but due to Covid 19 the procurement
process is slow.
Low expenditure on Engineering Services on labour contract and energy efficiency for the street
lights projects which has not been realised yet as anticipated.
Internal Charges (ME’s):
Internal Charges is R39 million less than the budget of R105 million for the quarter due to the following:
Departmental charges, rates and services are less than the budget by R16 million due to fewer
requests made on vegetation and grass cutting budget.
Legal expenses are less than the budget by R4 million as they are paid directly by the CoJ and
there has been delays in the processing of invoices from CoJ.
Marketing, advertising costs and public relations are less than the budget by R7 million due to
delays in the approval process for communications activities from the Group Communications
Office.
Fleet Lease COJ is less than the budget by R4 million due to no administration costs being posted
to date
Security cost is R4 million less than budget, due to less security staff were needed during the
quarter.
Internal Charges is R106 million less than the budget of R314 million for the year due to the
following:
Departmental charges, rates and services are less than the budget by R39 million due to fewer
requests made on vegetation and grass cutting budget.
Legal expenses are less than the budget by R13 million as they are paid directly by the CoJ and
there has been delays in the processing of invoices from CoJ.
Marketing, advertising costs and public relations are less than the budget by R20 million due to
delays in the approval process for communications activities from the Group Communications
Office.
Fleet Lease COJ is less than the budget by R13 million due to less vehicles rented.
Security cost is R12 million less than budget, due to less security staff were needed during the year.
Depreciation:
More than the budget for the quarter by R10 million for the quarter as a result of more assets being
capitalised during the current period, which resulted in more depreciation.
The YTD depreciation is more than the budget for the year by R29 million for the quarter as a result of more
assets being capitalised during the current period, which resulted in more depreciation.
City Power Quarter 3 Final Report 133
5.3. Statement of Financial Position and High-Level Notes
Movement in the Statement of Financial Position as at 31 March 2021 is as follows:
Inventories are more than the budget by R141 million due to the slow spending on repairs & maintenance.
Trade and Other Receivables are less than the budget by R249 million due to the decrease in sundry
debtors against the budget, as a result of claims submitted for housing development projects of R347
million and post-retirement benefits raised against COJ of R118 million.
Consumer Receivables are more than the budget by R321 million due to the poor payment levels.
Non-Current Assets are less than the budget by R168 million as a result of the slow capitalization of the
assets.
Current tax payable & Vat payable are less than the budget by R1.1 billion due to a decrease in tax owed
to SARS.
Finance Lease Liability is less than the budget by R76 million as a result of the financed amount being less
than the budget.
Figures in Rand thousand YTD Full Jun '20
Note Actual Budget Variance Variance Budget Actual
% for the year
Current assets 4,109,739 2,962,471 1,147,268 2,981,902 3,544,736
Inventories 1 235,217 94,279 140,938 149% 109,300 88,825
Loan to shareholder 0 0 0 0% 0 0
Trade and other receivables 2 741,083 990,511 (249,428) -25% 994,921 660,827
Trade and other receivables from non-exchange transactions 11,902 0 11,902 0% 0 330,378
Consumer receivables 3 2,198,493 1,877,681 320,812 17% 1,877,681 2,180,808
Vat receivable 0 0 0 0% 0 18,661
Cash and cash equivalents 9 923,043 0 923,043 0% 0 265,237
Non-current assets 15,529,163 15,696,902 -167,738 15,684,950 15,676,253
Property, plant and equipment 15,265,649 15,545,981 (280,332) -2% 15,541,965 15,301,732
Intangible assets 4 263,514 150,920 112,594 75% 142,986 374,521
Total Assets 19,638,902 18,659,372 979,530 18,666,852 19,220,989
Current liabilities 10,372,500 7,860,269 2,512,231 8,137,514 9,159,690
Loans from shareholders (ST) 370,027 371,269 (1,242) 0% 371,269 370,027
Current tax payable 5 168,706 595,132 (426,426) -72% 595,132 168,706
Trade and other payables 6 3,675,876 2,876,884 798,991 28% 3,735,776 4,355,067
VAT payable 7 (232,831) 457,745 (690,576) -151% 538,339 0
Finance lease liability 8 14,551 90,129 (75,577) -84% 104,335 19,069
Bank overdraft 9 6,177,094 3,257,087 2,920,007 90% 2,577,710 4,003,314
Provisions 10 199,077 212,024 (12,947) -6% 214,953 243,507
Non-current liabilities 4,414,119 4,690,932 -276,813 4,594,229 4,655,397
Loans from shareholders 11 2,001,150 2,033,325 (32,175) -2% 1,933,878 2,275,177
Retirement benefit obligation 5,508 8,227 (2,719) -33% 9,251 5,508
Finance lease 20,345 0 20,345 0% 0 20,345
Deferred income 12 107,710 63,426 44,284 70% 63,426 74,962
Deferred tax 13 1,625,089 1,948,857 (323,768) -17% 1,948,857 1,625,089
Consumer deposits 654,316 637,097 17,219 3% 638,817 654,317
Total Liabilities 14,786,619 12,551,201 2,235,418 12,731,743 13,815,087
Share capital and premium 112,466 112,466 0 0% 112,466 112,466
Accumulated surplus 4,739,817 5,995,705 (1,255,888) -21% 5,822,643 5,293,436
Total Net Assets 4,852,283 6,108,171 -1,255,888 5,935,109 5,405,902
Total Liabilities and Net Assets 19,638,902 18,659,372 979,530 18,666,852 19,220,989
City Power Quarter 3 Final Report 134
Cash and Cash Equivalents & Bank Overdraft
Less cash was received during the period under review as the payment levels are less than the budget
and the billing being less than the budget.
Provisions are less than the budget by R13 million due to the decrease in the ash disposal provision.
Loans from Shareholders (Long Term) are less than the budget by R32 million due to less loans received.
Retirement Benefit Obligation is less than the budget by R3 million due to a decrease in the number of
employees that qualify for the benefit.
Deferred Income is more than the budget by R44 million due to an increase in advance payments
received from customers for new service connections that will be made in future. This income is recognized
as deferred income until such time as the connection is made, at which stage the income is recognized
in the statement of financial performance. The budget is based on the principle that all connections have
been completed at period end.
Consumer Deposits are more than the budget by R17 million due to an increase in deposits from new
customers.
Cash: 2019/20 and 2020/21 comparative performance (R'000)
Description Jul Aug Sep Oct Nov Dec Jan Feb Mar YTD
Actual (4,897,858) (5,069,688) (5,629,179) (5,368,025) (5,459,183) (5,556,897) (5,401,679) (5,356,206) (5,254,051) (5,254,051)
Budget (2,941,557) (3,544,672) (3,965,581) (4,093,758) (3,853,658) (3,832,791) (3,642,404) (3,376,590) (3,257,087) (3,257,087)
Description Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 YTD
Actual (3,565,735) (3,404,084) (4,315,945) (4,310,842) (4,676,557) (4,089,902) (3,790,189) (3,962,906) (3,823,990) (3,823,990)
Budget (2,615,692) (3,003,596) (3,608,665) (3,649,569) (3,445,947) (3,584,169) (3,430,732) (3,042,741) (3,388,688) (3,388,688)
City Power Quarter 3 Final Report 135
5.4. Cash Flow Statement
Cash Flow Statement
Actual Budget Variance Actual Budget Variance Actual Budget Variance Actual Budget Variance
Cash flows arising from operating activities
Receipts
Cash receipts from charges for goods and services 4,118,876 4,741,696.68 -622,820.57 2,987,098 3,939,139 -952,041 4,277,145 4,040,049 237,096 11,366,680 12,704,446 -1,337,766
Cash receipts from other income 314,355 207,748.05 106,607.12 492,976 161,128 331,848 -127,158 185,052 -312,210 280,542 154,298 126,244
Cash receipts from grants 14,333 11,136.89 3,195.77 -9,422 30,000 -39,422 36,188 36,860 -672 368,803 405,701 -36,898
4,447,564 4,960,582 -513,018 3,470,652 4,130,267 -659,615 4,186,175 4,261,961 -75,786 12,016,025 13,264,445 -1,248,420
Payments
Cash payments to employees -286,853 -295,313.30 8,460.13 -316,903 -330,783 13,880 -347,950 -331,645 -16,305 -767,989 -774,024 6,035
Cash payments to suppliers for goods and services -5,653,669 -5,872,294.80 218,625.31 -2,618,990 -3,291,638 672,648 -3,241,787 -2,948,791 -292,996 -11,352,268 -11,950,546 598,278
Taxes paid -184,816 1,162,505.04 -1,347,321.01 -49,150 15,972 -65,122 9,713 38,040 -28,327 -232,831 1,207,939 -1,440,770
-6,125,339 -5,005,103 -1,120,236 -2,985,043 -3,606,449 621,406 -3,580,024 -3,242,396 -337,628 -12,353,087 -11,516,631 -836,456
Net cash flow arising from operating activities -1,677,775 -44,521 -1,633,253 485,609 523,818 -38,209 606,151 1,019,566 -413,414 -337,062 1,747,814 -2,084,876
Cash flows arising from investing activities
Purchase of property, plant and equipment -140,282 -219,995.43 79,713.00 -173,852 -200,231 26,379 -101,938 -246,698 144,760 -413,466 -664,317 250,852
Purchase of other intangible assets 74,311 193,029.12 -118,718.12 14,948 8,747 6,202 3,552 3,630 -77 111,007 223,601 -112,594
Net cash flows arising from investing activities -65,971 -26,966 -39,005 -158,903 -191,484 32,581 -98,386 -243,069 144,683 -302,458 -440,716 138,258
Cash flows arising from financing activities
Interest paid -114,814 -127,751.72 12,938.21 -148,468 -127,752 -20,717 -127,778 -127,752 -26 -391,060 -383,255 -7,805
Finance lease payments -0 32,358.80 -32,358.80 - 10,601 -10,601 - 12,272 -12,272 -4,518 50,714 -55,232
Interest received 27,374 9,833.00 17,541.39 14,032 9,833 4,199 16,981 9,833 7,148 58,388 29,499 28,889
Cash receipts from consumer deposits 29,252 -20,686.02 49,937.75 -29,252 1,731 -30,983 - 1,736 -1,736 - -17,219 17,219
Funds advanced from shareholder -89,169 -49,744.90 -39,424.03 -90,736 -93,932 3,196 -94,121 -96,933 2,812 -274,027 -240,611 -33,416
Net cash flows from financing activities -147,356 -155,991 8,635 -254,424 -199,518 -54,905 -204,918 -200,844 -4,075 -611,217 -560,871 -50,346
Net increase/(decrease) in cash and cash equivalents -1,891,102 -227,478.57 -1,663,623.85 72,282 132,815 -60,534 302,847 575,653 -272,806 -1,250,737 746,227 -1,996,964
Cash and cash equivalents at the beginning of the period -3,738,077 -3,738,076.62 - -5,629,179 -3,965,555 -1,663,624 -5,556,897 -3,832,740 -1,724,157 -4,003,314 -4,003,314 -
Cash and cash equivalents at the end of the period -5,629,179 -3,965,555 -1,663,624 -5,556,897 -3,832,740 -1,724,157 -5,254,051 -3,257,087 -1,996,964 -5,254,051 -3,257,087 -1,996,964
Quarter 1 Quarter 2 Quarter 3 YTD
City Power Quarter 3 Final Report 136
Cash generated from operations
This reflect a negative of R413 million as a result of the decrease in revenue collected, the operational cost
for the quarter shows an increase of R338 million. The negative variance of R2.08 billion against the YTD
budget is as a result of the decrease in cash received for good and services, payment of suppliers and taxes
paid and deferred tax.
Cash impact from investing activities
This positive variance is due to a decrease in non-current assets and the slow acquisition of fixed assets that
are capitalized.
Cash inflow from financing activities
This is mainly due to the decrease in loans being less than budget, increase in interest paid.
Net movement in cash
A positive net cash flow of R303 million for the quarter against a negative net cash movement of R1.3 billion
for the year to date.
5.5. Operation and Capital Budget
The expenditure for the third quarter amounted to R98 m compared to the quarter budget of R264 m which
reflects an under expenditure of R166 m. The under expenditure realized was due to the delays in execution
of Electrification, Metering, Upgrade and Bulk projects.
Capital Expenditure Details
Table 24: Capital Expenditure Detail
Controllable Capex
The expenditure under Controllable capital projects are funded through COJ loans, DSM levy, Grant funding
such as USDG and Own cash. The expenditure for the third quarter amounted to R69 m compared to the
quarter budget of R252 m, which reflects an under expenditure of R183 m, this is mainly attributed to delays
in the execution of projects under Electrical infrastructure such as upgrades as well as bulk infrastructure.
Project Detail (By Project) Original Budget
for the year Revised Budget
Budget for
Quarter 3
Actual for
Quarter 3
Var for the
Quarter 3YTD budget YTD Actual YTD Variance
Electrification 98 377 000 137 817 000 39 350 000 389 476 38 960 524 73 783 000 1 039 714 72 743 286
Service Connections 48 500 000 48 500 000 12 125 000 19 020 510 -6 895 510 38 217 000 71 603 427 -33 386 427
Upgrading of Electrical Network 133 500 000 167 200 000 43 725 000 22 968 540 20 756 460 104 475 000 97 287 420 7 187 580
Building Alterations/ Construction 2 803 115 2 803 115 1 121 246 - 1 121 246 953 059 953 059
Computers 4 800 000 4 800 000 1 920 000 2 504 070 -584 070 1 632 000 4 495 261 -2 863 261
Office Equipment 100 000 100 000 40 000 - 40 000 34 000 55 192 -21 192
Computer Software 7 246 885 22 246 885 2 898 754 - 2 898 754 5 663 941 5 663 941
Tools and Loose Gear 4 600 000 4 600 000 1 840 000 - 1 840 000 1 564 000 1 564 000
Telecommunication 10 000 000 20 000 000 5 949 000 5 363 096 585 904 10 576 400 9 444 530 1 131 870
Fire & Security 11 700 000 5 000 000 5 800 000 - 5 800 000 9 950 000 9 950 000
Meters 72 500 000 70 500 000 37 345 000 10 278 188 27 066 812 37 345 000 13 898 902 23 446 098
Scada 10 000 000 10 000 000 4 400 000 - 4 400 000 6 120 000 6 120 000
Protection 20 000 000 10 000 000 7 136 000 - 7 136 000 12 135 600 12 135 600
Furniture 450 000 450 000 180 000 - 180 000 153 000 340 286 -187 286
Public Lighting 60 000 000 60 000 000 21 000 000 20 110 613 889 387 54 000 000 45 452 808 8 547 192
Refurbish of Bulk Infrastructure 253 949 000 213 949 000 79 500 000 7 596 485 71 903 515 125 000 000 30 295 663 94 704 337
Insurance 0 - 10 209 722 -10 209 722 14 112 096 -14 112 096
TOTAL 738 526 000 777 966 000 264 330 000 98 440 700 165 889 300 481 602 000 288 025 298 193 576 702
City Power Quarter 3 Final Report 137
Table 25: Controllable Capex
i. Electrical Infrastructure
Electrical infrastructure comprises of Upgrade of Electrical Networks, Meters, Scada and Load management
projects. The expenditure for the third quarter amounted to R39m against a budget of R97 m which reflects
an under expenditure of R59m, this is as a results of delays in the execution of upgrade of Electrical Network
as well as metering projects delayed by procurement processes.
ii. Power Systems
Power Systems comprises of Protection project. The expenditure for the third quarter amounted to zero with
a budgeted amount of R7m, the under expenditure of R7m is due to delays in procurement processes.
iii. Bulk Infrastructure
The expenditure for the third quarter amounted to R8 m against the quarterly budget of R80m. The under
expenditure of R72 m was due to delays in the execution of bulk infrastructure projects during the quarter.
iv. Electrification
The expenditure for the third quarter under informal settlement amounted to R389 thousands against the
quarter budget of R40m, this reflect an under expenditure of R39m which was due to delays in the
confirmation of layout plans from housing department, however engagements are ongoing with the
department.
Non Controllable Capex
The non-controllable capital projects are projects which are funded by Public contributions and through
insurance funding. The Expenditure for the third quarter amounted to R29 m against the budget of R12 m
which reflect an over expenditure of R17 m, the over expenditure is due to more service connection
application received which was not anticipated.
Table 26: Non-Controllable Capex
i. Service Connections
The Service Connections projects are funded by public contributions. The expenditure for the third quarter
amounted to R19 m compared to the quarterly budget of R12 m which reflect an over spending of R7 m,
this is as a result of high number of service connections applications received than anticipated.
( Controllables) Project Detail (By
Project)
Original Budget
for the year Revised Budget
Budget for
Quarter 3
Actual for
Quarter 3
Var for the
Quarter 3YTD Budget YTD Actual YTD Variance
Electrification 98 377 000 137 817 000 39 350 000 389 476 38 960 524 73 783 000 1 039 714 72 743 286
Public Lighting 60 000 000 60 000 000 21 000 000 20 110 613 889 387 54 000 000 45 452 808 8 547 192
Electrical Infrastructure 237 700 000 272 700 000 97 219 000 38 609 825 58 609 175 168 466 400 120 630 852 47 835 548
Power Systems 20 000 000 10 000 000 7 136 000 - 7 136 000 12 135 600 - 12 135 600
Other Capex & asset purchases 20 000 000 35 000 000 8 000 000 2 504 070 5 495 930 10 000 000 4 890 739 5 109 261
Refurbish of Bulk Infrastructure 253 949 000 213 949 000 79 500 000 7 596 485 71 903 515 125 000 000 30 295 663 94 704 337
TOTAL 690 026 000 729 466 000 252 205 000 69 210 468 182 994 532 443 385 000 202 309 775 241 075 225
(Non - Controllables) Project Detail
(By Project)
Original Budget
for the year Revised Budget
Budget for
Quarter 3
Actual for
Quarter 3
Var for the
Quarter 3YTD budget YTD Actual YTD Variance
Service Connections 48 500 000 48 500 000 12 125 000 19 020 510 -6 895 510 38 217 000 71 603 427 -33 386 427
Insurance - - 10 209 722 -10 209 722 14 112 096 -14 112 096
TOTAL 48 500 000 48 500 000 12 125 000 29 230 232 -17 105 232 38 217 000 85 715 523 -47 498 523
City Power Quarter 3 Final Report 138
ii. Insurance
This category of projects is funded by insurance as a result of an insurable event, and the expenditure for
the third quarter amounted to R10m.
5.5.1 Sources of Funding
Table 27: Sources of Funding
5.6. Loan Claims
On the loan source of funding, expenditure to date is R61 m and R38 m has been claimed from City of
Johannesburg.
5.7. Tariffs
City Power was granted an average tariff increase of 13.07% and implemented with effect from 1 July 2019.
The increase was in line with the NERSA guideline for increase in municipal entities. NERSA also approved a
higher than guideline increase of 13.63% for City Power Large Power User Time of Use (TOU) customers in line
with our objective of gradual alignment of the large power user TOU tariff and the Large Power User demand
tariff to minimize negative revenue impact due to customer migration form one tariff category to the other.
The implementation of residential and business prepaid network surcharges of R200 and R402 respectively
where differed to the next financial year in order to allow adequate customer and stakeholder
consolidation.
5.8. Report on the Expanded Public Works Programme
Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 YTD – Actual
Jobs created 110 - - - 110
SMME supported 145 156 186 234
Table 28: Expanded Public Work Programme
Detail per source of funding Original Budget
for the year Revised Budget
Budget for
Quarter 3
Actual for
Quarter 3
Var for the
Quarter 3YTD budget YTD Actual YTD Variance
Loans 290 523 000 322 523 000 118 502 153 16 735 668 101 766 485 182 616 360 60 647 506 121 968 854
Dsm surcharge 301 126 000 301 126 000 94 352 847 52 085 324 42 267 522 186 985 640 140 622 555 46 363 086
PCons 48 500 000 48 500 000 12 125 000 19 020 510 -6 895 510 38 217 000 71 603 427 -33 386 427
Insurance - 10 209 722 -10 209 722 14 112 096 -14 112 096
Mig/Usdg 98 377 000 105 817 000 39 350 000 389 476 38 960 524 73 783 000 1 039 714 72 743 286
TOTAL 738 526 000 777 966 000 264 330 000 98 440 700 165 889 300 481 602 000 288 025 298 193 576 702
Project Detail (By Project) Budget Revised
Budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 TOTAL
Upgrading of Electrical Netw Loans 15 000 000 35 700 000 - - 7 824 620 - 7 824 620
Building alterations loans 2 803 115 2 803 115 - - -
Office Equipment loans 100 000 100 000 - - 55 192 - 55 192
Computer hardware loan 4 800 000 4 800 000 - - 3 721 635 - 3 721 635
Computer software loan 7 246 885 22 246 885 - - - -
Tools and loose gear loans 4 600 000 4 600 000 - - - -
Telecommunication loans 10 000 000 20 000 000 - - 4 081 434 - 4 081 434
Fire & Security loans 6 700 000 - - - - -
Meters loan 42 500 000 40 500 000 - - 3 261 843 - 3 261 843
SCADA loan 10 000 000 10 000 000 - - - -
Protection loan 19 000 000 7 500 000 - - - -
Furniture loan 450 000 450 000 - - 340 286 - 340 286
Public Lighting loan 30 000 000 30 000 000 - - 15 523 712 - 15 523 712
Refurbish of Bulk Infrastruc loan 137 323 000 111 823 000 - - 2 938 801 - 2 938 801
Electrification Loans 32 000 000
TOTAL 290 523 000 322 523 000 - - 37 747 522 - 37 747 522
City Power Quarter 3 Final Report 139
5.9. Procurement Policies and Practices: Compliance with 30 days NT payment policy rule
Quarter 1 Quarter 2 Quarter 3 Quarter 4 YTD - Actual
Total invoice processed (R’ 000) 55 389 42 346 41 036 - 138 771
Invoice paid within 30 days (R’000) 55,389 42 346 41 036 - 138 771
Percentage 100.00% 100.00% 100% - 100.00%
Table 29: Invoice Payments in line with National Treasury Payment Policy Rule
5.10. Supply Chain Management: BEE Performance
Table 30: BEE Performance
A total of R874 791 550 was spent on goods and services for the third quarter. The spend excludes the
purchase of bulk electricity from Eskom which amounted to R2 436 322 631 in the third quarter.
The third quarter spend on 51% Black Owned companies amounted to R533 106 066 which is 60.94% of the
procurement spend and is above the set target of 45%.
Procurement spend on 30% Black Women Owned companies amounted to R340 415 598 which equates to
38.91% of the total procurement spend and is above the set target of 15%.
Procurement spend on 51% Black Youth Owned companies amounted to R66 452 706 which equates to
7.60% of the total procurement spend and is above the set target of 5%.
Procurement spend on 51% Black People with Disabilities and Black Military Veterans companies amounted
to R201 598 which equates to 0.02% of the total procurement spend and is below the set target of 1%.
Quarter 1 Quarter 2 Quarter 3 Quarter 4 YTD - Actual
Total spend R’ 1 555 395 837,38 1 192 015 267 874 791 550 3 622 202 654
Procurement spend
from suppliers that are
51% black owned R’
865 048 838,09
715 198 716
533 106 066 2 113 353 620
% Spend 55.62% 60.00% 60.94% % 58.34%
Target 45% 45% 45% 45% 45%
Procurement spend
from suppliers that are
30% black woman
owned R’
582 870 103,27
492 521 825
340 415 598 1 415 807 526
% Spend 37.47% 41.32% 38.91% % 39.09%
Target 15% 15% 15% 15% 15%
Procurement spend
from suppliers that are
51% black youth owned
R’
108 604 463,67
60 437 141
66 452 706 235 494 311
% Spend 6.98% 5.07% 7.60% % 6.50%
Target 5% 5% 5% 5% 5%
Procurement spend
from suppliers that are
51% owned by black
people with disabilities
and black military
veterans R’
9 905 357,94
13 846 479
201 598 23 953 435
% Spend 0.64% 1.16% 0.02% % 0.66%
Target 1% 1% 1% 1% 1%
City Power Quarter 3 Final Report 140
5.11. Approved Bids for Quarter 3
No. Bid
description
Tender
bulletin
number
Date of
award
Budget
R’ 000
Amount allocated
for each tender
award
R’ 000
Tender awarded
to
Each
tender
award
period
1.
Maintenance
of
Telecommuni
cations
Systems
2372S 30/03/2021 R28,000 R7,000
Mokhere
Projects
Acquatelecoms
Xtelekom
Siyanqoba
Phambili Trading
Enterprise
3 Years
Table 31: Approved Bids for Quarter 3
Deviations for Quarter 3 – Exceptional Case
No
.
Procurement
Type Date Description Amount
1. Exceptional
Case
02/03/21 Various critical materials – Procurement of various materials
for business continuity on an urgent basis while the normal
competitive bidding process continues for long term
solution
n/a
2. Exceptional
Case
02/03/21 Medical Aid Brokerage – Award a new contract to the
current Medical Aid Broker – MOSO Consulting Services for
the provision of Medical Aid Brokerage/Intermediary
Services to employees up to 31 August 2021
n/a
3. Condonation 03/ 03/21 Payment for disinfecting services rendered by Ayana
Logistics
R 193 465
4. Exceptional
Case
12/02/21 Upgrade of Cleveland Station – Increasing the budget
value of the project in order for the current contractor to
complete the remaining project scope.
R 14 393 594
Table 32: Exceptional Case Deviations
Bid Status for Quarter 3
Bid No. Description Budget Closing Date
No of Bids
Received Evaluation Status
2352GS HV tower maintenance R75m 26-Mar-20 33 Completed
2370G
Supply and Delivery of
plumbing materials R1.5m Not Started
2373S
Maintenance of
Telecommunication
(Re-advert) R36m 17-Jul-20 32 Completed
2370G
Supply and Delivery of
plumbing materials R1.5m 22-Jan-21 50 Not Started
2375S
Removal of illegal
connections, discon &
recons none paying
customers and meter
audits R84.6m 03-Feb-21 253 In Progress
2376GS
Sebenza 275Kv
Overhead Line Bypass R9m 11-Dec-20 7 Completed
2378S
Specialised Security
Services R225m Cancelled
2379G
Supply of Testing Tools
and Measuring
Instruments Stock 26-Feb-21 48 In Progress
2380S Third Party Vending R153m Withdrawn
2382GS
Supply and install
statics and check
metering instruments R46.5m Cancelled
City Power Quarter 3 Final Report 141
Bid No. Description Budget Closing Date
No of Bids
Received Evaluation Status
and HV Voltage current
Transformers
2383S
Provision of specialised
cleaning services R4.8m Cancelled
2384G
Supply and Delivery of
MSS Stock 29-Jan-21 36 In Progress
2385G
Supply and Delivery of
Switchgear (RMU) Stock 29-Jan-21 29 Not Started
2386GS
Mobile Multi Ratio
Substation unit R56.7m 20-Apr-21 Not Started
2387GS
Supply, Installation and
Commissioning of
Substation Batteries
and Battery Chargers R18m 05-Feb-21 44 In Progress
2388S
Maintenance and
Support of Integrated
Security Systems R24.3m 05-Feb-21 7 In Progress
2389S
Requirements for
provision of medical
and pharmaceutical
supplies R1m 27-Jan-21 9 In Progress
2390S Installation of New IED's R50m 11-Feb-21 10 In Progress
2391G
Supply of LAB
Chemicals R1.5m 27-Jan-21 15 In Progress
2392GS
Dalkeith Lutz 88KV
Cable R200m Cancelled
2393GS
Hursthill Substation
Upgrade R65m 21-Apr-21 23 Not Started
2394GS
Johnware Substation
Upgrade R180m Resubmission
2395GS
Cydna Substation
Feederboard
Replacement R8m 22-Jan-21 21 In Progress
2396GS
Power Cable Testing &
Cable Fault Location R54m 05-Feb-21 37 In Progress
2397S
Transformer &
Switchgear testing R36m 05-Feb-21 25 In Progress
2398GS
Gressworld Substation
Feederboard
Replacement R8m 22-Jan-21 24 In Progress
2399GS
Mayfair Substation
Feederboard
Replacement R8m 22-Jan-21 24 In Progress
2400S
Quality Assurance
Audit, Maintenance of
Meters & Associated
Equipment (LPU) R85m 12-Feb-21 56 In Progress
2401S
ICT Service Desk and
End User Support R18m 01-Mar-21 32 In Progress
2402S
Ripple Relays
Maintenance R7.5m 04-Feb-21 15 In Progress
2403S
Occupational Health
Services R10m 02-Mar-21 8 In Progress
2404S
Inspection, Testing and
Repairs of Cranes and
Ancillary Equipment R2.4m 19-Apr-21 Not Started
2405S Turnkey Electrification R458m Not Started
2406G
Supply and Delivery of
Public Mast Steel Poles Stock 07-May-21 Not Started
City Power Quarter 3 Final Report 142
Bid No. Description Budget Closing Date
No of Bids
Received Evaluation Status
2407S
Psychometric
Assessment/
Competency
Management On Hold
2408S
Meter Check and Final
Reading R49.8m 19-Apr-21 Not Started
2409G
Supply and Delivery of
Power Transformers R45m Not Started
2410S ICT Data Maintenance R9.5m Not Started
2411S Medical Aid Brokers n/a 19-Apr-21 Not Started
2412S
Maintenance of Smart
Meters R240m Not Started
2413S
Labour Contract for
Network Maintenance
and Capex Projects TBA Not Started
2414GS
Mobile Guard House
For Substations R0.4m Not Started
2415GS
Dalkeith Lutz 88KV
Cable R200m
2416GS
Repair, Maintenance
and Calibration of Test
Equipment R18m
Table 33: Bid Status for Quarter
Less Than Three Quotations
Vendor Name PO Number Value Reasons for not obtaining three (3) quotes
Letta Consulting 4501316265
R20 000
The Request for Quotation was advertised for 7 days
and only two bidders responded to the request
Table 34: Less than Three Quotation
5.12. Register of Irregular Expenditure and Fruitless & Wasteful Expenditure
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
2014/15 R 3,200,000 Replacement of IT switch Mboneni Teledata
2014/15 R 358,000 Wrong scoring criteria
used for SCM evaluation
Active lifestyle
(4600002009)
2014/15 R 10,786,966 Wrong scoring criteria
used for SCM contracts
Dimension Data & ABB
(R71 5078 (4600001699,
4600001724) & R10 0718
88(4600001737,
4600001724))
2014/15 R 381,544 Damage transformer at
Eikenhoff substation
Southern Power
Maintenance
2016/17 R 250,000 Service rendered without
PO Verotest, HV Test & Repcal
2016/17 R 1,277,804 Supply and delivery of
miniature substations Powertech Transformers
2016/17 R 2,300,000 Various canteen items ABI
2016/17 R 6,079,895 Contract 2180GS Machite Engineering
2016/17 R 302,321 Seiko watches for long
service awards Treger Brands
City Power Quarter 3 Final Report 143
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
2017/18 R 16,442,608
Services rendered from
September 2016 to May
2017 after expiry of the
contract.
MTN
2017/18 R 6,780,173
Services rendered from
September 2016 to May
2017 after expiry of the
contract.
Vodacom
2017/18 R 409,500
Provision of Occupational
Medical Practitioner
(OMP), General
Practitioner (GP) and
Dietician Services for
services rendered after
expiry of the contract.
Risibu Trading and Projects
Services rendered
after expiry of the
contract. The
company did not
incur any loss as a
result of this
transaction. These
costs are budgeted
for and the
employees use their
own medical aid
funds to pay for GP
and Dietician
services. The
amount indicated
above is for the
services of the OMP.
2017/18 R 2,707,474
City Power acquired
contracts for recruitment
services from another
state organ
The information obtained
from another state organ
was incorrect when
securing these contracts
and City Power
discovered that the
contracts had lapsed
after expenditure had
been incurred in these
contracts.
The contracts were
subsequently terminated
Tlalefang – R2 581 846.40
Ebus – Tech Consulting –
R59 508.00
Labournet Recruitment –
R66 120.00
2017/18 R 189,000 Failure to obtain three (3)
quotations MPVS Construction CC
2017/18 R 30,000
Appointment of a
supplier who did not meet
mandatory requirements
bridging
2017/18 R 166,010,000 Use of contract after
expiry
Zeda Car Leasing t/a avis
Fleet; Eqstra Corporation
2017/18 R 5,565,000 Deviations incorrectly
classified as sole provider
Acumen Software Pty Ltd
(4600002061)
City Power Quarter 3 Final Report 144
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
2017/18 R 33,196,000 Awards incorrectly
classified as impractical
Aviwe Business
Development and
Transport Services
(4600002077); Utility
Management and
Engineering Consultants
(Contract No:
4600002075); African
Meter Reading Pty Ltd
(Contract No:
4600002076); MTN; PCB
Power Transformers Pty
Ltd(No Contract: PO
4500742673, 4500772673,
4500673717, 4500673718,
4500673719); Electro
Inductive Industries Pty
Ltd(No Contract: PO
4500742675, 4500772686,
4500673715, 4500673716);
Vodacom; Actom (Pty)
Ltd (No Contract: PO
450067322, 4500673721,
4500673720, 4500772701,
4500742682)); Revive
Electrical (No contract:
PO - 4500673714,
4500742679, 4500673724,
4500673726,4500673728,
4500673727,
4500775169)No Contract:
PO) Transformers
2017/18 R 3,859,000
Third party vendors
worked without a
contract
Cigcell Cashpower
(4600001766); Easypay
(4600001767); Syntell
(4600001769); Sandulela
(4600001768) and
Countour (4600001803)
2017/18 R 6,448,000 Irregular expenditure not
disclosed (2180GS) Machite Engineering
2017/18 R 1,579,000
Technical evaluation
points awarded not
consistent with evaluation
criteria (2217G)
World Wide Industerial
and Systems Engineers Pty
Ltd
2017/18 R 3,297,000
Tender advertised for a
period less than 30 days
(2230S)
Odirile IT Holdings
2017/18 R 1,077,000
Tender awarded to a
supplier with municipal
accounts that are in
arrears
Tshiamo Trading;
2017/18 R 1,598,000
Appointment of a
supplier who did not meet
mandatory requirements
(Pulsemed)
Pulsemed
2017/18 R 123,121,000 Budget Overspent Not Applicable Condonation by
City Power Board
City Power Quarter 3 Final Report 145
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
2018/19 R 69,300
An instruction was
received from City of
Johannesburg that a
contract will be entered
into for use by all its
entities
Exclaim Innovations &
Solutions (Pty) Ltd
Payment of
outstanding invoices
for Licensing,
Support and
Maintenance of
Software
2018/19 R 1,639,750 Work executed without a
purchase order Siemens
Payment for SCADA
system licensing,
support and
maintenance
2018/19 R 1,464,000
Long lead times for
material ordered from
overseas lead to the
program running beyond
contract period
Siemens
Payment for
maintenance of GIS
breakers at Prospect
substation
2018/19 R 477,480
Purchase orders were
erroneously created with
the shorter period of
service
VZ Construction CC and
Epic Engineering (Pty) Ltd
joint venture
Payment for ‘City
Power Jozi@Work
Capability Service
Agent
2018/19 R 515,032
Use of contract when
after funds had been
depleted
Linda Security CC Payment for security
services
2018/19 R 804,767 Work executed without a
purchase order Pricewaterhouse Coopers
Payment of a
strategic partner
2018/19 R 442,000 Extension of current
contract
Dalitso Business Equipment
(Pty) Ltd Printing Solution
2018/19 R 18,977,000 Extension of current
contract
MTN (1st June - 30
November) GSM Services
2018/19 R 9,285,000 Extension of current
contract Vodacom GSM Services
2018/19 R 1,884,968 Extension of current
contract Linda Security CC
Security Services:
National Key Point
2018/19 R 888,000 Contract irregularly
awarded Faranani Media
Public Relations and
Agency Services
2018/19 R 138,310,565
The court declared the
contract null and void
and ordered City Power
to re-evaluate and revert
back to court within 90
days
Labour Contracts
Maintenance of
network, street lights
and service
connections
2018/19 R 138,841
Canteen Management
took a decision (due to
high prices) to source
fruits and vegetables
from Joburg Market,
being under the
impression that the
process allowed to
purchase from other
Joburg Market Purchase goods for
canteen
City Power Quarter 3 Final Report 146
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
MOE’s outside an existing
contract. It has since
been clarified that since
there is a contract in
place, purchases can
only be done through the
contract regardless if the
prices are high or if it will
save the Company.
2018/19 R 2,435,000
Payments made on a
contract that was
irregularly awarded in
2017/18 Financial Year.
Pulsemed
Provision of Medical
& Employee
Wellness Support
Services
2018/19 R 4,235,000
Maintenance of HV & MV
Switchgear
Ark Tech Engineering
Solution
Maintenance of HV
& MV Switchgear
2018/19 R 69,045,000 Fleet Contract Zeda Car Leasing t/a avis
Fleet; Eqstra Corporation Fleet Contract
2018/19 R 1,021,000 False declaration
Big O Trading (460002207,
Amount: R654 417.79);
Khentsa Group
(4500855339, 4500932248
Amount: R31 426.16);
Regent Business School (R
252 783.32); JNP
Construction and Projects
(R82 560)
False declaration
2018/19 R 17,031,000 Worked without a
contract
Easypay; Cigicell;
Contour;
EMS(4600001993); Syntel
and Sandulela
Third Party vending
(2282S)
2018/19 R 563,000 Supply and repair of ICT
Hardware & Accessories Jolenhla consulting
Supply and repair of
ICT Hardware &
Accessories
2018/19 R 5,373,000 Meter reading check &
final
Ralais Investment CC
(4600002137); Tabuka
Susa Pty Ltd (4600002134);
Methon CC(4600002110);
African Meter Reading Pty
Ltd (4600002111)
Meter reading
check & final
2018/19 R 12,724,000 Third Party vending
(2282S) Easypay; Cigicell; Contour
Third Party vending
(2282S)
City Power Quarter 3 Final Report 147
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
2018/19 R 29,199,000
Removal of illegal
connections and meter
audit
KLZ & TTM JV (4600002142);
Kubakhi Contractors
Projects (4600002125); D &
S Construction Projects
(4600002128); Imbawula
Technical Services
(4600002123); Lufuno
Kone Electrical &
Construction(4600002121);
Leoka Investments
(4600002115); Ngwato
Electrical Contractors
(4600002126); Zabest
Construction (Pty) Ltd
(4600002120); Lefhumo
Lwa Barena (4600002116);
Sphandile Trading
Enterprise (4600002117);
Mathoho Electrical
Projects (4600002131);
Yande Engineering and
Projects(4600002127);
Bvelela Engineering
(4600002119); Tshehlane
Electrical (4600002124);
Rivisi Electrical
Contractors(4600002122)
Removal of illegal
connections and
meter audit
2018/19 R 3,619,000 Maintenance of DC
Systems
Jolobe Trading
(4600002138), Thalukanyo
Trading (4600002140) ;
Imbawula Technical
Services (4600002139)
Maintenance of DC
Systems
2018/19 R 2,594,000
Supply , installation and
commissioning of optic
fibre for
telecommunications
between substations and
depots
Aqua Telecoms (R1 780
494.58 4600002251 PO );
Nothani - Letsema JV
(R813 967.01 PO
4600002263)
Supply , installation
and commissioning
of optic fibre for
telecommunications
between substations
and depots
2018/19 R 179,288,000
Extension of contract
periods done after expiry
date
Consolidated Power
Projects ((R 5 804 384.08;
4600001938 )(R97 729
270.22;4600001495 )(R16
568 066.67; 4600001763
)(R13 437 469; 4600001762)
ABB South Africa Pty Ltd
(R12 468 958.69;
4600001737); F & J
Electrical (R11 758
6877.77;4600001749) ;
Mpande Business
Enterprise CC (R21 520
936.03;4600001745);
Dalitso Business Equipment
Pty Ltd (R441 730.96;
4600001957)
Substation contracts
2018/19 R 11,628,000 Turnkey solutions for
Electrification Projects
Brunel Engineering and
NJR Projects JV
Turnkey solutions for
Electrification
Projects
City Power Quarter 3 Final Report 148
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
2018/19 R 54,812,000 Panel of Strategic
partners
Deloitte Consulting Pty Ltd
(R 5 494 165.32;
4600002241); Entsika
Consulting Services (Pty)
Ltd (R2 324 370.80;
4600002242) Sempro
Consulting (Pty) Ltd (R18
363 283.09;4600002244)
Pamoja Assets
Management (Pty) Ltd
(R28 630 105.12;
4600002243)
Panel of Strategic
partners
2018/19 R 479,000 Quotations
Fly Hi Tradings( R54 359.35);
Cullin Afrrica CC (R92
529.00); Climo Solutions
Pty Ltd (R148 069.25); Air
Products Pty Ltd (R 12 420);
Static Power a division of
Actom (R93 919.35);
Famous Lit Projects Pty Ltd
(R77 424)
Quotations
2018/19 R 9,155,000 Third Party vending
(2282S) Cigicell
Third Party vending
(2282S)
2018/19 R 34,000
Non tax compliant
supplier awarded -
Quotation Ellen G
Non tax compliant
supplier awarded -
Quotation
2019/20 R 845,162,240 Contract declared null
and void by court Various Suppliers
2019/20 R 96,491,857 Contract expired
extended by COJ to end
May 2020
Zeda Car Leasing t/a avis
Fleet
2019/20 R 193,200
Sub-Contractor was used
to get evidence and had
to be brought back to
finalize disciplinary case
Six Sense
2019/20 R 84,076
Strategic partner was
used to get evidence
and had to be brought
back to finalize
disciplinary case
Grant Thornton
2019/20 R 18,075,738 Appointment of a
supplier who did not meet
mandatory requirements
ARK TECH ENGINEERING
SOLUTIONS CC
2019/20 R 2,180,524 Irregular expenditure not
disclosed (2180GS)
MACHITE ENGINEERING
CC
2019/20
R 2,161,577
Appointment of a
supplier who did not meet
mandatory requirements
(Pulsemed)
PULSEMED EMERGENCY
SERVICES
2019/20 R 1,954,689
Extension of current
contract
Mobile Telephone
Networks Pty Ltd
2019/20 R 645,570
Extension of current
contract
VODACOM SERVICE
PROVIDER
City Power Quarter 3 Final Report 149
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
2019/20 R 5,236,265
Extension of current
contract
LINDA INTEGRATED
SECURITY (PTY) LTD
2019/20 R 1,410,750 False declaration BIG O TRADING 528
2019/20
R 15,152,200 Worked without a
contract
EASYPAY (PTY) LTD (R6 611
254,60), CONTOUR
TECHNOLOGY (R25
951,54), CIGICELL (R8 514
993,87)
2019/20 R 3,371,215
1. Supply and repair of ICT
Hardware & Accessories JOLENHLA CONSULTING
2019/20
R 7,116,771
Removal of illegal
connections and meter
audit
KLZ & TTM JV 300 178,42
KUBAHKI CONTRACTORS
CC 654 419,45
D and S Construction and
Projects ( 592 938,72
IMBAWULA TECHNICAL
SERVICES 233 176,20
LUFUNO KONE ELECTRICAL
485 620,13
Leoka Investments CC
548 291,57
Mongmabu investments
t/a Ngwato Ele 511387,64
Lefhumo lwa barema
trading enterpri 415
327,57
SPHANDILE TRADING
ENTERPRISE CC 573431,01
Mathoho Electrical &
Projects 436 273,71
Yande Engineering and
Projects 413 101,53
Bvelela Engineering CC
539 250,19
TSHEHLANE ELECTRICAL
800 635,13
RIVISI ELECTRICAL
CONTRACTORS CC 612
739,57
2019/20 R 525,920
Maintenance of DC
Systems JOLENHLA CONSULTING
2019/20
R 2,499,132
Supply , installation and
commissioning of optic
fiber for
telecommunications
between substations and
depots NOTHANI LETSEMA JV
2019/20
R 2,583,390
Extension of contract
periods done after expiry
date
MACHITE ENGINEERING
CC 1 414 393,11
MPANDE BUSINESS
ENTERPRISE CC 1 053
658,79
City Power Quarter 3 Final Report 150
5 - Irregular Expenditure
Related
Fin-
Year
Amount Description of Incident Details of Vendor General Comments
F & J ELECTRICAL 115
337,89
2019/20 R 55,890,080
Turnkey solutions for
Electrification Projects Brunel / NJR JV
2019/20 R 8,514,994
Third Party vending
(2282S) CIGICELL (PTY) LTD
2019/20 R 2,527,099 Covid -19 Various
2019/20
R 60,638,639 Contract extended
Linda 15 708 796,20
Nduma 20 937 538,26
Mafoko 16 177 390,24
GNG 7 814 913,84
2019/20 R 34,697,060 Security Contracts
2019/20 R 233,052,000 Budget Overspent
2020/21
R 57,464,168
Contract expired
extended by COJ to end
May 2020
COJ
2020/21 R 106,875 Covid -20 Various
2020/21 R 294,578,527
Contract declared null
and void by court Various
R 2,493,841,065
Table 35: Irregular Expenditure
Reconciliation of Irregular Expenditure
City Power Quarter 3 Final Report 151
- Fruitless & Wasteful Expenditure
Related
Fin-Year Amount Description of Incident
Details of
Vendor General Comments
2016/17 R 36,127,000
City Power and Rangewave Trade
and Invest 3 (Pty) Ltd entered into a
written agreement that entitled the
latter to house MTN equipment in and
on the listed street poles managed by
City Power. Rangewave cancelled
the housing agreement on the basis
that City Power had repudiated the
said agreement, because City Power
prevented Rangewave from housing
the MTN equipment and claimed
damages from City Power in the
arbitration proceedings.
Rangewave
Trade and Invest
3 (Pty) Ltd
The fruitless and
wasteful expenditure
was investigated and
consequent
management was
implemented, as a
warning letter was
issued to the
employee.
2017/18 R 33,847,000
City Power has since accrued for the
interest cost as a provision, however
management felt that it could not
regard the expense as fruitless and
wasteful since every effort is being
made to challenge the Receiver on
the tax status of City Power and no
payment has been made to SARS, if
City Power is successful we will apply
for a waiver or objection.
SARS Condoned by City
Power Board
2017/18 R 137,000
Interest on late payments relates to
Eskom invoices for streetlights (total of
598 invoices). Invoices are either
received late from Eskom or submitted
to the finance department after due
date.
ESKOM Condoned by City
Power Board
2017/18 R 200,000 Cables laid in wetland area without an
environment assessment
2018/19 R 21,984,354 Interest charged by SARS SARS
2018/19 R 208,838
Interest on late payments relates to
Eskom invoices for streetlights. Invoices
are either received late from Eskom or
submitted to the finance department
after due date.
ESKOM
2018/19 R 26,135
An employee’s (Mr. RS Sechemane –
SAP 40001672) bank details was
changed following a telephonic
discussion between the individual and
an HR Administrator (Ms. R Manoto –
SAP 40001116). This discussion was also
followed up with a written request and
bank confirmation of the new banking
details. It was however later
discovered that the telephonic and
written requests did not come from the
employee concerned. Finance was
requested to make a special salary
payment to the employee concerned
on 31/1/2019.
A criminal case was
opened by Mr.
Sechemane (CASE
374/01/2019). A
case was also
opened by Ms.
Manoto (CASE
31/2/2019). A
preliminary
investigation was
done by City Power
and has been
referred to GFIS for
further investigation
2018/19 R 28,427,000 Setheo
Contract was
cancelled after it was
discovered that a
fraudulent
guarantee was
issued to City Power
2019/20 R 14,885,888 City Power has accrued for the interest
cost as a provision, however SARS
City Power Quarter 3 Final Report 152
management felt that it could not
regard the expense as fruitless and
wasteful since every effort is being
made to challenge the Receiver on
the tax status of City Power and no
payment has been made to SARS
2019/20 R 600,000
Interest on late payments relates to
Eskom invoices for streetlights. Invoices
are either received late from Eskom or
submitted to the finance department
after due date.
ESKOM
R 231,124,215
Table 36: Fruitless and Wasteful Expenditure
City Power Quarter 3 Final Report 153
CHAPTER 6: INTERNAL & EXTERNAL AUDIT FINDINGS
6.1. Constitution of the Internal Audit Function within City Power
The Board is ultimately responsible to oversee the establishment of effective systems of internal control in
order to provide reasonable assurance that the company’s financial and non-financial objectives are
achieved. Executing this responsibility includes the establishment of an Internal Audit function in line with
the provisions of Municipal Finance Management Act, 2003 and recommendations of King IV and in
accordance with the International Internal Audit Standards as published by the Institute of Internal Auditors.
Internal controls are the processes aimed at achieving reasonable assurance about the realisation of the
following objectives:
The accomplishment of established objectives and goals for operations and programs
The economical and efficient use of resources
The reliability and integrity of financial and non-financial information
Compliance with relevant policies, procedures, laws and regulations
Safeguarding of assets
Internal Audit is governed by a charter that is reviewed annually by the Audit and Risk Committee. The
purpose of this charter is to define the role, organisational status, authority, responsibilities and scope of
activities of the Internal Audit function as prescribed by Municipal Finance Management Act, 2004, section
165(1) and the guidelines of the King IV Report on Corporate Governance. It also includes the principles
underlying the realisation of the objectives of the function and the translation thereof.
The Internal Audit’s focus for the third (3rd) quarter of the 2020/2021 financial year was providing value
adding assurance within the following key business areas:
Review of 2nd Quarter Performance Report;
Refurbishment, Asset Renewal and Expansion;
Reduction of Non-Technical Losses;
Probity audits – SCM Compliance
6.2. Progress on Internal Audit Plan
Risk Based Audits
Internal Audit prepares a three year rolling Internal Audit plan. These are approved annually by the Audit
and Risk Committee.
As per the approved plan for the 2020/2021 financial year, the below-mentioned audits were approved for
execution in the third (3rd) quarter:
Risk name Notes Status
Review of 2nd Quarter
Performance Report
The objective of the audit was to evaluate:
the controls and systems to collect monitor
and report performance information.
To reflect an opinion relating to the
performance of the company against
predetermined objectives;
Completed
Refurbishment, Asset
Renewal and
Expansion
The purpose of the audit was to:
assess the adequacy, effectiveness and
efficiencies relating to the management of
refurbishment, asset renewal and expansion
by the entity;
Completed
Reduction of Non-
Technical Losses
The purpose of this is to
Completed
City Power Quarter 3 Final Report 154
Risk name Notes Status
review the processes, controls, effectiveness
and efficiencies relating to the reduction of
non-technical losses within City Power
Johannesburg;
Status on the approved quarter 3 audits
Planned vs Competed audits for quarter 3
Value Adding Audits – Probity Audit (SCM Compliance Audit):
During quarter 3, the following probity audit was conducted:
Risk name Notes Status
Maintenance of the
Telecommunication
Systems1
The objective of the probity audit was to assess
and determine whether all applicable
procurement and contract laws and regulations
were applied and followed when awarding the
tender.
Completed
Status on the probity audits concluded in Q3
During quarter 3, the following probity audits were started and subsequently retracted based on various
reasons provided:
3 3
00
0.5
1
1.5
2
2.5
3
3.5
Planned Completed In Progress
QUARTER 3 - PLANNED VS COMPLETED AUDIT
City Power Quarter 3 Final Report 155
Risk name Notes Status
Bid name -
Refurbishment,
Maintenance & Routine
Inspections of Metal
Structured Transmission
Lines & All Structures
The objective of the probity audit was to assess
and determine whether all applicable
procurement and contract laws and regulations
were applied and followed when awarding the
tender.
Retracted
Maintenance of SCADA Retracted
Probity audits retracted
6.3. Progress on Resolution of Internal Audit and External Audit Findings
The findings from both internal and external audit reports are tracked and followed up to confirm corrective
action by management, is in place. Internal Audit is continuously following up unresolved findings to verify
that root causes are addressed by management, thus preventing recurrence of the control deficiency. The
process of following up on resolution of both internal and external audit findings is performed on a weekly
and monthly basis.
In the third (3rd) quarter of the 2020/2021 financial year, there has been a minimal progress made in resolving
of both external and internal audit findings. The achieved reported quarter 3 performance was below the
quarterly target. Refer below breakdown of the resolved audit findings:
6.4. Progress on Resolution of Internal Audit Findings
The status on resolution of Internal Audit Findings is tabulated below.
Quarter 3 – 2020/2021
FY Opening
Balance
Findings
Raised Resolved Unresolved
%
Resolved
Q1 20 65 23 62 27%
Q2 62 - 5 57 6%
Q3 57 21 6 72 7%
Resolution of Internal Audit Findings
Financial Year Total Findings Resolved Unresolved/In Progress
2020/2021 21 - 21
2019/2020 66 29 37
2018/2019 12 2 10
2017/2018 4 2 2
2014/2015 1 - 1
2013/2014 2 1 1
TOTAL 106 34 72
City Power Quarter 3 Final Report 156
Resolution of Internal Audit Findings per year
Classification of unresolved Internal Audit findings per Group
There were a total of six (6) audit findings out of a total of unresolved audit findings of sixty-two (62)
unresolved audit findings which were followed up in the third (3rd) quarter ended 31 March 2021 with the
status as follows:
6 (100%) internal control deficiencies were resolved during the third (3rd) quarter ended 31 March
2021.
All unresolved audit findings were a various stages of implementation of the controls and measures
by management. Those unresolved audit findings will be followed up on a monthly basis in the and
fourth (4th) quarter.
There is a 40% year-to-date resolution rate on Internal Audit findings. There are a significant number of audit
findings that remain unresolved and require close scrutiny especially with reference those findings on
revenue and billing, information technology, human resources and performance monitoring, evaluation
and reporting.
6.5. Progress on Resolution of External Audit Finding (AGSA related audit findings)
The progress on external audit resolution is categorize between findings affecting and not affecting the
audit opinion.
As at 28th February 2021, the AGSA concluded their regulatory audit for the 2019/2020 financial statements,
audit of predetermined objectives and compliance audit. Included below, is the summary of the unresolved
audit findings, including the newly issued audit findings according to their classification or categorisation:
Matters affecting the audit report - 17 audit findings (2 were resolved)
Other important matters – 81 audit findings (15 were resolved)
Administrative matters – 4 audit finding (1 was resolved)
The tables below depict the progress made in resolving the AGSA audit findings, including the ageing of
the audit findings per year.
Finance17%
Metering Services14%
Engineering Operations22%
Engineering Services 6%
Enterprise Support22%
Human Resources10%
Office of the CEO1%
Business Sustainability8%
BREAKDOWN OF UNRESOLVED INTERNAL AUDIT FINDINGS PER GROUP
Finance Metering Services Engineering Operations Engineering Services
Enterprise Support Human Resources Office of the CEO Business Sustainability
City Power Quarter 3 Final Report 157
As depicted in the tables below, there were no AGSA audit findings that were resolved in the third (3rd) of
this financial year. The implementation of the controls and measures relating to the AGSA audit findings
were at various stages of implementation. We further assessed management commitments regarding the
resolution of the AGSA audit findings and noted that the majority of the audit findings were earmarked for
resolution in the fourth (4th) quarter. These commitments are tracked weekly and monthly by the internal
audit team.
Description Total Resolved –
Q3 Resolved – YTD Unresolved
Matters affecting the audit report 17 -
2 15
Matters not affecting the audit report 81 -
15 66
Administrative matters 4 -
1 3
Total 102 -
18 84
Resolution of AGSA Audit Findings
Financial Year Total Findings Resolved – Q3
Resolved - YTD Unresolved/In
Progress
2020/2021 61
- 61
2019/2020 30 14 16
2017/2018 4 1 3
2016/2017 7 3 4
TOTAL 102 18 84
Resolution of AGSA Audit Findings per year
The audit findings that remain unresolved relates to the following Groups:
Classification of unresolved AGSA findings per Group
Finance49%
Metering Services8%
Engineering Services 1%
Enterprise Support37%
Human Resources1%
Office of the CEO4%
BREAKDOWN OF UNRESOLVED AGSA FINDINGS PER GROUP
Finance Metering Services Engineering Services
Enterprise Support Human Resources Office of the CEO
City Power Quarter 3 Final Report 158
A total of eighteen (18) control deficiencies were resolved and 2 audit findings with respect to the findings
affecting the Auditor’s Report were addressed. The fifteen (15) audit finding relating to matters affecting
the auditor’s report still remain unresolved. The following are the applicable audit findings:
The reasons for the deviations as disclosed in the annual financial statements are not justifiable.
Revenue from sale of Electricity (Estimated for 12 months).
Prior year irregular expenditure not investigated.
Prior year fruitless and wasteful expenditure not investigated.
Reasonable steps were not taken to prevent irregular expenditure, fruitless and wasteful
expenditure.
Overspending on the budget resulting in irregular expenditure.
Property plant and equipment – non disclosure of halted projects/projects taking significantly longer
period of time to complete than expected
Property plant and equipment - Physical verification of non-network assets not performed.
Inaccuracies identified in the contracts as disclosed in the Commitments listing.
Contingent liabilities: Comparative information not disclosed for contingent liabilities.
Contingent liabilities disclosed in the annual financial statements is incomplete
Limitation of scope on the information requested for audit purposes.
Contract performance is not monitored on a monthly basis by the entity.
Extension of contract periods done after expiry date.
Understatement of allowance for impairment (note 7).
There are dependencies from the City of Johannesburg Metropolitan Municipality to assist with other
findings that are still outstanding. These findings relate to revenue management (billing and debtors)
amongst others.
6.6. Overall State of Internal Controls
The statement on Internal Controls is an expression of an opinion by the Internal Audit Department on the
status of the Internal Control system of City Power Johannesburg after it has evaluated such. Both King IV
and International Standards of Professional Practice of Internal Auditing (ISPPIA) requires the CAE to provide
a written assessment of the adequacy and effectiveness of the internal controls and issue a report reflecting
on any deficiencies which have been mitigated by Management.
During the third quarter, there has been a minimal improvement in addressing the AGSA related audit
findings, furthermore, there are still a significant number of matters affecting the Audit Report related audit
findings (15), which remain unresolved at the end of the third quarter. Majority of these issues relates to
material misstatements to the financial statements and other compliance related legislation. The resolution
of other audit findings depends on the City of Johannesburg to put in measures in place to mitigate against
those deficiencies. Those matters relate to amongst others, revenue billing and debtors’ management.
6.7. Conclusion
OVERALL CONTROL ASSESSMENT
CONTROL DESIGN CONTROL IMPLEMENTATION
Based on the above analysis, the systems of internal controls are partially adequate and ineffective as
reasonable assurance was not obtained that the risks are reduced to an acceptable level. This is also as a
result of the material, persistent and pervasive deficiencies in controls were noted as unresolved including
matters affecting the external audit report.
Internal Control Assessment Criteria
OVERALL CONTROL ASSESSMENT
LEGEND CONTROL DESIGN CONTROL IMPLEMENTATION
Control design found to be adequate, as
it has been planned and organised in a
manner that provides reasonable
assurance that the risks will be managed
and that the related goals and objectives
will be achieved efficiently.
Control implementation found to be
effective, as reasonable assurance was
obtained that the risks are reduced to an
acceptable level.
City Power Quarter 3 Final Report 159
OVERALL CONTROL ASSESSMENT
LEGEND CONTROL DESIGN CONTROL IMPLEMENTATION
Control design found to be adequate,
however a few specific weaknesses were
noted. It needs improvement in order to
be planned and organised in a manner
that provides reasonable assurance that
the risks will be managed and that the
related goals and objectives will be
achieved efficiently.
Control implementation found to be
effective, however a few specific
weaknesses were noted. Reasonable
assurance was however still obtained that
the risks are reduced to an acceptable
level.
Control design found to be inadequate,
as it has not been planned and organised
in a manner that provides reasonable
assurance that the risks will be managed
and that the related goals and objectives
will be achieved efficiently.
Control implementation found to be
ineffective, as reasonable assurance was
not obtained that the risks are reduced to
an acceptable level.
City Power Quarter 3 Final Report 160
ANNEXURE: SHAREHOLDER KPIS
GSPCR Performance Template
The table below outlines the Institutional KPIs as per GSPRC Template
Table 37: GSPCR performance
Capex Opex
No. 1Percentage spent on capital budget against
approved capital budget % 10.00 4.20 20.00 21.4030.00 11.40 R778m 0.00 R73m R31.5m R156m R158m R264m R98m
No. 2Percentage of the strategic risks’ management
action plans implemented. % 25.00 79.00 25.00 77.00 25.00 60.000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
No. 3 Percentage resolution of Audit findings: Internal Audit % 10.00 27.00 10.00 6.00 50.00 7.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
No. 4 Percentage resolution of Audit findings: AGSA % 10.00 41.00 10.00 3.00 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
No. 5Percentage spent on operating budget against
approved operating budget % 95.00 84.00 95.00 98.00 95.0084.69 0.00 3,372,488,284 842,989,318 709,268,693 843,160,578 686,614,900 857,920,530 726,627,097
No. 6Percentage reduction in unauthorized, irregular,
fruitless and wasteful (UIFW) expenditure incurred %0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 0
No. 7 Number of SMMEs supported by the City No. 30.00 145.00 30.00 156.00 30.00 186.00 0.00 0.00 0.00 0.00 0.00 0.00 0 0
No. 8Percentage spent on repairs and maintenance to
property, plant and equipment. % 1.76 1.56 1.76 1.24 1.79 1.470.00 1,084,208,575 271,052,144 238,044,249 271,052,145 180,711,366 273,552,059 224,334,987
No. 9 Number of substations upgraded/developed No. 0.00 0.00 0.00 1.00 0.00 0.00 R253m 0.00 R10m 0.00 R35m R22m R79m R7,5m
No. 10 Kilometers of electricity cables installed Km 4.00 0.00 6.00 15.59 6.00 12.00 R30m 0.00 R3m R2m R6m R7m R9m R5m
No. 11Number of dwellings provided with connections to
mains electricity supply by the municipality No. 200.00 0.00 550.00 0.00300.00 82.00 R98.3m 0.00 R9.8m 0.00 R29m R650k R39m R389k
No. 12Number units (structures) in informal settlements with
access to electricity No. 200.00 0.00 550.00 0.00300.00 82.00 R98.3m 0.00 R9.8m 0.00 R29m R650k R39m R389k
No. 13 Percentage of households with access to electricity % 92.30 92.30 92.30 92.30 KPI Removed KPI Removed R98.3m 0.00 R9.8m 0.00 R9.8m R0 KPI Removed KPI Removed
No. 14 Number public lights installed No. 70.00 0.00 150.00 398.00 180.00 345.00 R30m 0.00 R3m 0.00 R21m R25m R21m R20m
No. 15 EPWP job opportunities created No. 100.00 0.00 200.00 204.00 300.00 218.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Quarter 3
Target
Quarter 3
Actual
Total BudgetQuarter 1 Target Quarter 1 Actual Quarter 2 Target
GSPCR: City Power KPI and Buget Performance Quarter 3 FY2020/2021
No. of
KPIKPI Name: Measure
2020/2021 KPI Performance 2020/2021 Budget Performance
Quarter 1
Target
Quarter 1
Actual
Quarter 2
Target
Quarter 2
Actual Quarter 2 Actual Quarter 3 Target Quarter 3 Actual