DURBAN - IN AN effort to stave off the collapse of its electricity infrastructure, the embattled Msunduzi Municipality has resolved to make the unit independent and ringfence the money generated through the sale of electricity for maintenance.
The move is partly aimed at ensuring a more stable supply of electricity. Supply has been unreliable in the recent past, with frequent and long outages.
Municipal manager Madoda Khathide revealed the plans during a council meeting this week. He told The Mercury yesterday that the change would not be immediate, but would have serious implications going forward.
He said that a resolution was taken in February 2021 by council to establish a separate business unit. An organogram was approved in June 2021 for the electricity business unit.
The revelations come after Khathide told a council meeting that the municipality was in debt to the tune of R1.3 billion, and is struggling to pay key suppliers. It has entered into an arrangement to pay R320 million that it owes to Eskom. The municipality also owes close to R400m to Umgeni Water and is struggling to pay salaries.
Opposition councillors welcomed the move, but said the officials must clarify how the rest of the municipality would survive as it is reliant on the revenue generated by electricity.
Khathide detailed numerous steps that have been taken to ensure the success of the service as a business unit. He said while the surplus that would be generated by the unit in the time being still can be used to fund council activities, “other units like water, waste, traffic have been encouraged to start looking at their own financial models that can be replicated from the electricity model”.
“We are currently compiling new job descriptions for submission to Salga’s Job evaluation processes. A post for the GM Electricity is on its way to council for the appointment of a shortlisting/ interviewing panel,” he said.
He said the Development Bank of SA, which funds some of the municipality’s projects, has started its own processes for analysing the billing system issues in relation to electricity, meter auditing, cost reflective tariffs for budgetary processes in the outer years.
“The electricity business unit is currently developing a model for ring fencing of all revenues generated through electricity accounts so that it may be utilised for electricity infrastructure upgrade, maintenance and repairs.”
He said the finance business unit in partnership with the electricity business unit has managed to secure a service provider that would develop an app for electronic meter reading.
“This will not only ensure that efficiency is achieved since time delays between meter reading and billing compilation will be a thing of the past, but also consumer confidence will drastically improve as a result of an accurate billing system,” he said.
Khathide said through a partnership facilitated by mayor Mzimkhulu Thebolla with local technical training institutions, there had been a number of unemployed youth with qualifications in electrical engineering that have been roped in to assist the municipality.
He said the unit has managed to secure funding from council to upgrade the existing two major substations that were severely affected by a hailstorm and vandalised as a result of the fire.
Councillors said this was a good idea, but were worried about its impact on the rest of the municipality.
THE MERCURY