EDITORIAL: City Power can light the way
Sorting out its bills will also elevate City Power to a role model
For Johannesburg residents, who have had to drive from work in dark streets to get to their equally dark homes in recent weeks, moves to get City Power into shape can only be a good thing.
To those customers, their lived experience probably feels far removed from the utility’s stated vision to be a "world-class utility". City Power’s mission statement is equally lofty, committing it to, among other things, providing a sustainable and reliable energy supply. To people who have been subjected to regular power interruptions, which City Power refers to as load rotation rather than the load shedding made famous by the bigger national utility, Eskom, this will also seem barely credible.
And if you ask anyone who’s had to dispute a bill, it’s more likely than not that they will also give the entity a fail on its promise to provide "efficient and effective" customer services.
It’s only fair to note that much of the inefficiency predates the current leadership, which has committed itself to getting the organisation into shape.
If there’s any doubt about why this is so crucial, the numbers speak for themselves. Johannesburg is the economic heartbeat of SA and accounts for about 16% of the nation’s GDP and 40% of Gauteng’s economy. And City Power is crucial to ensuring that engine keeps running, seeing that it accounts for about 40% of all revenue collected by the city.
With that in mind, we can only welcome City Power CEO Lerato Setshedi’s efforts to revive the organisation. Success here may well be a template for a future restructuring at Eskom, if management and unions ever resolve their disputes and succeed in pulling together for the greater good.
Of interest to Eskom CEO Phakamani Hadebe and his colleagues may be City Power’s aim to recover R3bn in unpaid tariffs. Getting this amount from residents would wipe out City Power’s deficit and leave it with almost R2bn to invest in its ageing infrastructure, which has been blamed for much of the power failures that have hobbled SA’s biggest city.
IT IS NOTORIOUSLY DIFFICULT TO COLLECT HISTORIC DEBT, AS ESKOM CAN ATTEST TO.
The outages, coming as winter temperatures dropped, have rightly caused outrage among communities. Nico de Jager‚ mayoral committee member for Environment and Infrastructure Services‚ recently put the city’s electrical infrastructure backlog at about R18bn, following the development of the R1bn Sebenza substation.
This huge number, which is more than twice that of the entire capital expenditure budget the city has for the 2018-19 period, highlights the challenges faced by the organisation as it seeks, in De Jager’s words, to ensure that Johannesburg is a city that "shines brightly at night once more and brings safety and security to the neighbourhoods in desperate need".
Getting R3bn back would help, but only a little. But how confident can the city’s residents be that this will be done anytime soon? Given the fact that the billing crisis is still very much a crisis that hampers efficient revenue collection, it’s easy to be sceptical that Setshedi’s goal will be met.
It is notoriously difficult to collect historic debt, as Eskom can attest to, especially in an area such as Soweto, which contributes to almost half of what municipalities owe the national utility. Eskom is owed about R30bn by municipalities, with Soweto accounting for about R14bn of that.
Given these facts, Eskom should be watching with interest.
Perhaps City Power can demonstrate what’s possible. Of course, it’s also possible that the difference in the nature of the clients that need to be chased for money — business for the Johannesburg utility and councils for Eskom — means the lessons might not be transferable.
If nothing else, a determined and successful City Power, in addition to its crucial role in keeping Africa’s premier economic hub on the move, might shame national government into moving with some urgency in sorting out Eskom and, more importantly, support its management when it makes the key decisions that might put it in conflict with unions. The current conflict over wages will seem trivial once the company starts acting on cutting its workforce, which it has admitted is too big by about a third.
As for City Power, it still has a long way to go before it can claim it has sorted out its bills, got residents on side and collected all of the money it is owed. That’s key to ensuring it escapes the ever-expanding financial black hole that is thwarting its attempts to keep the infrastructure from falling apart. Perhaps even more importantly, that will also elevate it into a role model and boost confidence that bigger problems can be tackled effectively.