http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.34Change: -0.01
R/$ = 10.68Change: 0.03
Au 1294.21 $/ozChange: -0.38
Pt 1463.50 $/ozChange: 3.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 26, 2012

Municipalities inadequate – official

Back
Energy|Eskom|Roads|System|Water|Electricity|Electricity Distribution|Electricity Distributors|Energy|Energy Distribution Industry|Unpaid Electricity Bills|Ongama Mhalawe|Terence Nombembe|Thembani Bukula|Water
Eskom|Roads|System|Water|Energy||Water
energy-company|eskom|roads|system|water-company|electricity|electricity-distribution|electricity-distributors|energy|energy-distribution-industry|unpaid-electricity-bills|ongama-mhalawe|terence-nombembe|thembani-bukula|water



Municipalities are too poorly managed at the moment to be reliable electricity distributors, MPs heard on Wednesday.

There was no clear strategy to solve the problem, co-operative governance deputy director Ongama Mhalawe told Parliament's portfolio committees on energy and co-operative governance.

He said municipalities were plagued by a lack of technical capacity, funding gaps, and poor revenue management.

Evidence of this was a collective municipal debt of R76 billion, of which R12.7 billion consisted of unpaid electricity bills.

Mhalawe was speaking on the first day of public hearings on energy distribution industry (EDI) problems.

He said: "If we don't deal with the issues, including governance, we won't be able to deal with electricity distribution."

According to figures from the energy department, municipalities provide electricity to roughly 54 percent of the country's users and had an asset maintenance backlog of R27.4 billion in 2008. The figure has been increasing by R2.5 billion a year and now stood at R35 billion.

National Energy Regulator of SA (Nersa) member Thembani Bukula said municipal distribution chain woes, including licensing breaches, were a function of wider mismanagement.

The regulator proposed ring-fencing funding for asset maintenance.

"They're not very good at building roads or supplying water either," Bukula said.

"There is no reason in principle why municipalities should not distribute electricity, but in the current situation it is not ideal."

Auditor General Terence Nombembe's annual report last week revealed that only 13 of the country's 343 municipalities received clean audits in the past financial year.

Nombembe also faulted municipalities for R11 billion in unauthorised and irregular expenditure.

Eskom's executive head of distribution Ayanda Noah said it was lamentable that wasted state funds could have paid for a third of the maintenance backlog.

"It shows that the money to deal with the backlog is in the system."

She said Eskom believed direct transfers to local government to fix the problem were "a last resort measure only".

Noah called for a "pragmatic approach" to transforming the distribution industry, and commented that after two decades in which dominant thinking demanded it be completely overhauled, this had failed to happen.

"History probably tells us that we don't have the appetite for large-scale restructuring," she concluded.

Presenters made the point that stripping municipalities of their distribution capacity was not a viable option, as proven by the shelving of the regional electricity distributors programme.

It was halted because municipalities would lose a vital revenue stream, often used to cross-subside other services.

Academics from the Cape Peninsula University of Technology said it appeared the energy department was languishing in "analysis mode" when it needed to tackle the problem.

They proposed that Nersa administer the necessary funds for asset maintenance as part of its licensing functions.

The hearings continue until Friday.

Edited by: Sapa
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Electricity News
Article contains comments
An aloe plant in the foreground as construction gets under way at the Amakhala Emoyeni wind farm project site
Work has officially started at Cennergi’s R3.5-billion Amakhala Emoyeni wind farm, located near Bedford, in the Eastern Cape. The 138 MW project was among the 19 renewable-energy and seven wind projects selected following the second bid window under the South...
Article contains comments
Article contains comments
Article contains comments
More
 
 
Latest News
While the global economy continues to battle growth headwinds as it slowly emerges from a lingering post-recessionary phase, the greatest inhibitors to South African economic development are largely domestic and within government’s control, Finance Minister...
Building materials firm Infrasors said on Friday that FD Marius Potgieter, who had occupied the position since July 1, 2009, had tendered his resignation and would leave the company with immediate effect.  Construction supplies manufacturer Afrimat FD and Infrasors...
Telecommunications group Telkom on Friday announced that, following extensive facilitated consultations and deliberations, management and organised labour had reached consensus that the company’s current restructuring process would proceed.  “The parties have...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
SINGLE EXPERIMENT An artist’s impression of OCO-2 in orbit
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
RICE TAG The real costs of operating Rea Vaya have become clear
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks