It’s almost become a drinking game in Africa’s richest city: identify which of the 13 city entities is named with the most apt oxymoron. While you might immediately be tempted to say “Dada Morero”, remember we’re looking for a specific moron archetype.
You could, of course, go with Joburg Water, which seems to operate as if its executives have a stake in Valpré. Or you could choose Pikitup, where the name is missing the implied second word of its title, being “yourself”.
Most people would probably pick City Power, Joburg’s highest revenue-generating arm.
You’ll know it from the call centres staffed by people bitter at being passed over by Boswell Wilkie, armed with an instruction to “check the website” when you call in to ask if their long-term strategy is to have traffic lights at intersections permanently manned by the city’s destitute.
More likely, you’ll have heard a horror story of someone living off the grid in a pothole who received a power bill for R400,000. Or you’ll have read the articles revealing how City Power keeps awarding contracts to pastor Witness Mazanga from Chosen World Ministries, even after the city flagged R335m in “deceptive invoices” from his firms.
In other words, it operates with the sort of fiscal discipline that made VBS Mutual Bank infamous and the aptitude for accountability you’d expect from the ANC’s election list submission team. And that’s before you speak about its actual business: there were 2.1-million power outages in the nine months to March as its unmaintained infrastructure crumbled.
Four steps to fix the beast
Yet a new report from Ann Bernstein’s Centre for Development & Enterprise (CDE) reckons City Power can be fixed. It identifies four steps: fix the leadership; ring-fence the money paid by customers so the funds can’t be raided by the city; improve revenue collection; and bring in technical expertise from the private sector.
The first part seems easy. Right now, City Power has a 12-person board, of which only one nonexecutive director is an engineer. And it only has an acting CEO, Charles Tlouane, who has a diploma in electrical engineering.
But in April, the city ignored the National Treasury’s requirement for the new CEO to have a postgraduate qualification in engineering, downgrading this to an “added advantage”. Morero said there were no qualified applicants, which “required us to do some relaxation”, News24 reported.
The CDE’s four fixes are obvious, yet the city hasn’t made them. What would change now?
Well, it all depends on the November 4 local government election, in which the DA’s candidate for mayor, Helen Zille, is ahead in the polls with 42%, compared with the 27% some expect the ANC to win. If Zille can stretch that to 47%, it’ll make forming a coalition easier.
But even with a capable mayor, rebuilding City Power seems almost impossible.
One problem is how Joburg distributes and bills for power. As electricity minister Kgosientsho Ramokgopa explains, for every R100 of electricity City Power buys from Eskom, it only properly distributes R70 to residents. “They’ve already lost R30, even before they can collect,” he says.
Another part is how City Power manages money. The entity needs R44.25bn to fix infrastructure, yet Joburg residents owe R13.3bn.
And each time it overbills people or fails to get its own house in order, trust among residents deteriorates. Which is only rational: why should a resident of Meyerton, for instance, pay their bill if the city itself owes Eskom R2.3bn?
The outcome, the CDE says, is that City Power is stuck in a doom loop, unable to generate enough cash to fix infrastructure. “As a result, maintenance is deferred and infrastructure deteriorates, contributing to further losses and service failures,” it says.
So can all this be fixed?
“I think it can, and we have to try,” Bernstein says. “Will it survive, even after everything has been fixed? That I don’t know: the entity, like everyone, is battling to survive the extremely high prices from Eskom, which is itself due to government failure.”
How to tackle a turnaround
The CDE, with help from business leaders, reckons there are 17 specific interventions that can be made in the first 100 days of a new city administration.
In the first phase, the CDE says, the new mayor should appoint a war room headed by someone with strong electricity distribution and turnaround experience. This person should “negotiate an Eskom enforcement standstill in exchange for full, on-time current account payment”, review the high-risk contracts and begin the process to hire a new full-time CEO.
In the second phase, City Power would launch a “staged smart-prepayment programme, starting in five high-loss areas”, and open the “grand bargain” by hosting town hall meetings in the three worst-affected areas, offering an “arrears normalisation” plan.
In the third phase, the new CEO would be appointed, and City Power should show measurable improvement in its high-risk zones and sign a “performance-linked debt relief deal” with the Treasury.
Ultimately, whether residents will trust it again is the central question. The CDE’s proposal recognises as much, saying City Power should immediately establish a “crisis communication centre to resolve historical billing disputes, manage outage communications and rebuild public trust with verified results”.
These are small steps, but you know what they say: the journey to a City of Joburg “service centre” begins with a single dose of antidepressant.
“There are big problems. Joburg’s population grew by 767,000 people over the past decade, yet it created just 30,000 jobs, which is South Africa in a microcosm,” says Bernstein. “Much of the city’s problems can and have to be fixed; if we can’t fix Joburg, can we really fix South Africa?”
