KwaDukuza municipality’s electricity losses escalate

KwaDukuza’s electricity crisis continues to deepen year-on-year, with the municipality having recorded R148-million in losses at the mid-year point.

If current trends continue, it will reach R296-million at the end of the 2022/2023 financial year, almost R60-million more than the already staggering R237-million lost in 2021/2022.

The R237-million was itself R56-million more than that lost in 2020/2021, casting concerns on the ability of KwaDukuza municipality’s (KDM) electricity department to manage the crisis.

For context, the mid-year losses equate to more than 26% of the electricity purchased by KDM. The national average is between 8 and 12%.

This despite an update to the electrical department’s organogram last year, which was designed to improve use of human resources to curb the losses.

The electrical figures emerged in KDM’s mid-year performance report, tabled in council last Thursday.

“We are going backwards. It is very concerning to see repeat findings, and with NERSA hikes coming, electrical instability could well see us in a financially unstable position,” said Democratic Alliance caucus leader, Tammy Colley.

ActionSA caucus leader Nel Sewraj cited illegal connections as the main culprit.

“We need raids. We need to empower the revenue protection unit and energy loss task teams to make a difference, otherwise the department will continue operating at a loss,” he said.

In her mid-year address, KDM mayor Lindile Nhaca vowed to challenge the proposed 18.65% nationwide electricity hike expected on April 1.

She called the hike an injustice and instructed municipal manager Nhlanhla Mdakane to seek legal advice and take action as warranted going forward.

Nhaca further promised to try and ease the burden on low-income households, potentially by increasing indigent free electricity by 10 kilowatts to an annual 85 kilowatts in the next financial year.

Elsewhere in the mid-year budget, the municipality’s main revenue generators, electricity rates, property rates and refuse revenue reached R454-million, R286-million and R44-million respectively.

The total revenue collected was R1.03-billion, an under-collection of R38-million compared to the annual budget.

Year-to-date expenditure showed a material underspend of R106-million, although when accounting for billing that only reflects after the budget is compiled, KDM has overspent by just over R5-million.

There was, however, a significant capital underspend, as the municipality only used R185-million (30%) of its capital budget.

Accompanying this were questions raised by councillors about the R109-million in disaster funding received by KDM after the April floods.

Colley queried why only R13-million had been spent to date when significant infrastructure damage was still to be repaired.

KDM said it hoped to reach between 70 and 80% capital expenditure by the end of the financial year.

“This should be done with speed given that the council at the special meeting dated January 19, 2023 approved the preferential procurement policy,” said Nhaca.

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