Recent figures from the Nelson Mandela Bay Municipality show that the municipality sold R2.9 Billion of electricity. The acquisition cost of that electricity was R1.8 Billion.
The big question is; “How did the Municipality employ/spend the gross profit of R1.1 Billion and was it in terms of the legislation?”
The Electricity Regulation Act 2006 (Act No. 4 of 2006) as amended by the Electricity Regulation Amendment Act 2007 (Act No. 28 0f 2007) states, in Section 27, the Duties of Municipalities.
Each municipality must exercise its executive authority and perform its duty by:
- complying with all the technical and operational requirements for electricity networks determined by the Regulator;
- integrating its reticulation services with its integrated development plans;
- preparing, implementing and requiring relevant plans and budgets;
- progressively ensuring access to at least basic reticulation services through appropriate investments in its electricity infrastructure;
- providing basic reticulation services free of charge or at a minimum cost to certain classes of end users within its available resources;
- ensuring sustainable reticulation services through effective and efficient management and adherence to the national norms and standards contemplated in section 35;
- regularly reporting and providing information to the Department of Provincial and Local Government, the National Treasury, the Regulator and customers;
- executing its reticulation function in accordance with relevant national energy policies; and
- keeping separate financial statements, including a balance sheet of the reticulation business.
According to various local lobby groups they are unable to / are being prevented from viewing the separate financial statements, including a balance sheet of the reticulation business of the Nelson Mandela Bay Municipality.
Worrying to myself is the ‘street talk’ sating that our Municipality is:
- Not adhering to maintenance schedules
- Not replacing aging infrastructure
- Not attracting sufficiently qualified persons
- Using the gross profit from electricity sales in a manner NOT contemplated in the above act
NERSA’s task is to ensure uniformity in pricing structures across the country – a task made all the more difficult by ‘secretive’ municipalities who are struggling to make ends meet through traditional revenue collection streams.
Related Articles:
- 548% markup on electricity component by Nelson Mandela Bay Municipality
- Eskom tariff request a necessity
- Chamber opposes Eskom tariff increase
Alan Straton
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