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 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

http://www.citypower.co.za/


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


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


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


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


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



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



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


CHAPTER 1: LEADERSHIP AND CORPORATE PROFILE

1.1. Foreword: Board Chairperson, Adv. Lindiwe Maseko


1.2. Foreword: Chief Executive Officer, Mr. Mongezi Ntsokolo


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.


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 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


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


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


2 of 2 0 1 of 1

Mr. P Kedama


2 of 2 1 of 1

Mr. N Kgope 4 of 4 - 1 of 1 1 of 1

Ms. K Lehloenya


2 of 2 - - 1 of 1


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


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


(Resigned: 16 Mar 2021)

2 of 2 1 of 1

Ms T Marah


2 of 2 1 of 2

Ms. L Mathabathe


2 of 2 1 of 1

Mr. K Mthembu 4 of 4 - 1 of 1

Mr. M Mello


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


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;


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



TOTAL 730

Table 6: Remuneration – Non-Executive Directors

Independent Audit Committee Members


Mr. C Lithole

Independent Audit Committee

Member 18

Mr. H Moolla


Member 18

Ms. D Mthimunye (appointed: 10 Feb 2021


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


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


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.


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.


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


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.


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.


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


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


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


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.


Risk

Ref

Risk Residual

Risk

Rating


KPI inked to

Risk

Risk

Achievement

Action to improve

management of risk



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.


Capex projects


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


Risk

Ref

Risk Residual

Risk

Rating


KPI inked to

Risk

Risk

Achievement

Action to improve

management of risk



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.


the PMS policy


the Group Contract

Management

Framework.

1.7. Develop Project

Tracking Tool and site

visit inspections

1.8. Monitor and report

on expenditure


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.


Risk

Ref

Risk Residual

Risk

Rating


KPI inked to

Risk

Risk

Achievement

Action to improve

management of risk



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


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


Risk

Ref

Risk Residual

Risk

Rating


KPI inked to

Risk

Risk

Achievement

Action to improve

management of risk



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


Risk Ref Risk

Description

Residual

Risk

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management of

risk

Due

date


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.


Risk Ref Risk

Description

Residual

Risk

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management of

risk

Due

date


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.


Risk Ref Risk

Description

Residual

Risk

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management of

risk

Due

date


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


Risk Ref Risk

Description

Residual

Risk

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management of

risk

Due

date


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


Risk Ref Risk

Description

Residual

Risk

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management of

risk

Due

date


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


Risk Ref Risk

Description

Residual

Risk

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management of

risk

Due

date


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


Risk Ref Risk

Description

Residual

Risk

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management of

risk

Due

date


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)


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.


Risk

Ref

Risk Residual

Risk Rating

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management

of risk


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


Risk

Ref

Risk Residual

Risk Rating

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management

of risk


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


Risk

Ref

Risk Residual

Risk Rating

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management

of risk


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


Risk

Ref

Risk Residual

Risk Rating

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management

of risk


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


Risk

Ref

Risk Residual

Risk Rating

KPI Linked to the

Risk

KPI

Achievemen

t

Action to

improve

management

of risk


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


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


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




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



Cnr Carse O’ Gowrie


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


Johannesburg, 2193

Tel: 011 442 9045

Fax: 011 788 0131


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


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


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




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


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



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


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



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


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


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


Act Name Scope Q3

2020/21


2. Companies Act

71, of 2008


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


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



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


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



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


Act Name Scope Q3

2020/21


5. Occupational

Health and

Safety Act,

No.85 of 1993


Scope Covered:

Section 17 & 19 that deals

with health and safety

representatives and

committees.

100% Compliant

6. National

Environmental

Management

Act, 107 of

1998


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


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 &


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


Act Name Scope Q3

2020/21


Report to include a

Statement of

remunerations and

benefit of the workforce

9. Municipal

Systems Act, 32

of 2000

Conducted in 2020/21

Scope Covered:

Declaration of Interests

Q1 - 526/1684 submissions

received


received *(Security officers –

283 have been added on the

list, hence the total number is

now 1966)


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.



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


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.



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


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


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


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 workforce

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


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


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


send for review

process.

Finance Group


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


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


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


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.


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


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


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.


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


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



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.


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



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.



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,


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


Risk

Ref.

Risk

Description

Residual

Risk

KPI linked to

the Risk

Action to Improve

Management of

Risk


Action Item as at


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


Risk

Ref.

Risk

Description

Residual

Risk

KPI linked to

the Risk

Action to Improve

Management of

Risk


Action Item as at


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


Risk

Ref.

Risk

Description

Residual

Risk

KPI linked to

the Risk

Action to Improve

Management of

Risk


Action Item as at


consultation with

the business. The

encryption of

removable

media will be

applied based

on the

developed

strategy

Table 14: ICT Strategic Risk


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.


ICT Projects/

Initiatives

Source

of funds

Expected

completion

date

ICT

Plan


Current Status


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


ICT Projects/

Initiatives

Source

of funds

Expected

completion

date

ICT

Plan


Current Status


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.


ICT Projects/

Initiatives

Source

of funds

Expected

completion

date

ICT

Plan


Current Status


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


ICT Projects/

Initiatives

Source

of funds

Expected

completion

date

ICT

Plan


Current Status


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



virtual office

In planning stage

HR Automation

/Employee Self

Service

OPEX 31.12.2020



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


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


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


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


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


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


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



Inner City

underground

tunnels

To prevent

security

incidents

resulting to loss

of supply at

major

substations

# of security


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



# 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’



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


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.


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


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


The detail performance of each KPI as per approved company scorecard is outline below:



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




KPI

Ref.

No.

Key Performance

Indicator

Reporting


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




KPI

Ref.

No.

Key Performance

Indicator

Reporting


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




KPI

Ref.

No.

Key Performance

Indicator

Reporting


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.)


supply after forced interruption within 7.5 hours)


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


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


KPI

Ref.

No.

Key Performance

Indicator

Reporting


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



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



Total No. of KPI's

Total No. of KPI's measured




KPI

Ref.

No.

Key Performance

Indicator

Reporting


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


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




KPI

Ref.

No.

Key Performance

Indicator

Reporting


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


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)




Year-to-

Date Hours 5.00 5.00 0.00

Table 23: Service Level Standard Detailed Performance


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




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




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



supply after logged forced

interruption within 3.5 hrs.)

e. Percentage Resolution

of power supple after



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




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)


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



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)


2,656,561.35


1,850,842.99


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


Of S Credit Balance

(12,686.33)

205991384 Dept Public Works&Land Affairs Arrears

574,930.72


44,489.25


37,101.13


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



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



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


61,742.90


298,134.92

221387003 National Dept Of Public Works Arrears

455,288.94


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

-



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


972,740.65


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



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


1,423,041.56

403307073 Republic Of South Africa Current Balance

21,698.26

500315432 Republic Of South Africa Credit balance

(256,424.01)


59,715.66


65,730.33

502211799 Republic Of South Africa Credit balance

(14,586.09)

403304403 Republic Of South Africa Move Out

79,169.69


59,692.57


264,480.03


306,118.39


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



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.


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


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


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.


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.


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


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.


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


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%)


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


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.


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


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


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)


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


-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%


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)


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.


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


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%


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)


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


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.


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)


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


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


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)


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


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


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.


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.


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.


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


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)


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)


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)


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


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


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


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


Budget for

Quarter 3

Actual for

Quarter 3

Var for the


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


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


Budget for

Quarter 3

Actual for

Quarter 3

Var for the


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


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


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


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


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%


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


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



No of Bids


and HV Voltage current

Transformers

2383S

Provision of specialised

cleaning services R4.8m Cancelled

2384G


MSS Stock 29-Jan-21 36 In Progress

2385G


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


2399GS

Mayfair Substation

Feederboard


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


Public Mast Steel Poles Stock 07-May-21 Not Started



No of Bids


2407S

Psychometric

Assessment/

Competency

Management On Hold

2408S

Meter Check and Final

Reading R49.8m 19-Apr-21 Not Started

2409G


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



Related

Fin-

Year


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)



Related

Fin-

Year


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



(Pulsemed)

Pulsemed

2017/18 R 123,121,000 Budget Overspent Not Applicable Condonation by

City Power Board



Related

Fin-

Year


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


contract Vodacom GSM Services


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



Related

Fin-

Year


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)



Related

Fin-

Year


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



Related

Fin-

Year


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



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



(Pulsemed)

PULSEMED EMERGENCY

SERVICES

2019/20 R 1,954,689

Extension of current

contract

Mobile Telephone

Networks Pty Ltd

2019/20 R 645,570


contract

VODACOM SERVICE

PROVIDER



Related

Fin-

Year


2019/20 R 5,236,265


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



Related

Fin-

Year


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


- 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


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


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


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


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



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:


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



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


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


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


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


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.



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.


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.


ineffective, as reasonable assurance was

not obtained that the risks are reduced to

an acceptable level.


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

city power johannesburg (state owned company) …

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