For the first time in KwaDukuza municipality’s (KDM) history, the electrical engineering business unit will operate at a loss this year.
The shocking revelation emerged from the municipality’s mid-year adjustment budget, which saw electricity revenue decreased by R74-million.
This is the result of consistent energy losses from cable theft and illegal connections – equal to a value of R150.31-million (105 787 777 kwh) at the end of January, 7 months into the current financial year.
R18-million was lost in January alone, and with the financial year-end looming in June, the municipality is trending towards overtaking the already staggering R181-million lost in 2020/2021 (23%).
“Energy losses are at 26% in KwaDukuza, far exceeding standard rates of losses countrywide which are between 6 and 12%.
“This is a serious threat to the ability of the municipality to function effectively,” said KDM chief financial officer Shamir Rajcoomar when addressing council last Thursday.
Electricity income comfortably represents KDM’s biggest source of revenue, with the figure expected to reach R1.063-billion after the mid-year adjustment.
If energy losses remain consistent until financial year-end, the number will hit R257-million.
If proper measures were taken to bring losses within the upper-end of the national average (12%), KDM would increase its revenue by at least R130-million.
That still leaves the question as to why losses were so high in the first place.
KDM’s electrical engineering business unit is operating with a vacancy rate of 41%.
That means 66 positions out of a staff complement of 162 are not filled, which places a huge obstacle in the ability of the business unit to effectively monitor and protect its infrastructure.
This includes all employees, from directors to artisans and cleaners in the unit.
While agreeing the high vacancy rate hamstrings the unit’s effectiveness, KDM spokesperson Sipho Mkhize said filling the posts had not been prioritised by council.
“Vacancies exists at all levels. All posts are important and it is therefore irrelevant whether these posts are junior or senior in nature as each post has an important role to play,” he said.
When the initial budget was in its approval stage, the municipality estimated 11 000 prepaid meters had been “illegally connected, bypassed or tampered with”.
A comprehensive meter audit and replacement programme was initiated as a result, but had failed in its mandate.
“The electricity department was not successful in replacing the 11 000 meters scheduled in the year under review,” said Rajcoomar.
Independent Alliance councillor, Ebrahim Kolia, said he was gravely concerned.
“It is clear that our revenue is declining. That our largest revenue generating unit is operating at a loss is worrying,” he said.
Also raised as an issue in council was the ongoing maintenance of KwaDukuza’s 7 000 streetlights.
This is a problem throughout the municipality, with 494 streetlights out of order between Salt Rock’s Ward 22 and Ballito’s Ward 30 alone.
Ward 6 councillor, Tammy Colley, said capital input had not matched the results on the ground.
“The maintenance budget has had an increase of R6.4-million for streetlight maintenance, potholes as well as storm water maintenance.
“This is appreciated as these are service delivery issues directly affecting our residents.
“We must see an increased budget in the maintenance of existing assets in the new budget. If the work carried out was of the required standard, would there be this need?” she asked.
The municipality has already embarked on a mission of disconnecting homes with outstanding electricity bills.
Supply was cut off to a house in Ballito and two cottages in Etete last Friday as the homeowners collectively owe the municipality R600 000.
Acting on tip-offs, the municipal electricity department will continue investigating and where necessary disconnect homes, Mkhize said.
He stressed the municipality did not need to warn people who stole electricity as the council has had amnesty drives for electricity theft.
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