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City Power: Mid-Year Report 2015/16 Final
CITY POWER JOHANNESBURG (STATE OWNED COMPANY) LIMITED
Registration No: 2000/030051/30
2015/16 Mid-Year Report
July-December
Final
City Power: Mid-Year Report 2015/16 Final Page 2
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 Auditors : Auditor-General
Vision
To be a world-class electricity distributor
Mission The mission of City Power is to meet the expectations of its customers and stakeholders by:
Providing a sustainable, affordable, safe and reliable electricity supply Providing prompt and efficient customer services Developing and incentivizing its employees Being the preferred equal opportunity employer Undertaking its business in an environmentally acceptable manner
Aspired values
City Power aspires to be:
Resourceful Resilient Reliable Respectful
And to always act with integrity.
City Power: Mid-Year Report 2015/16 Final Page 3
Approval Confirmation of receipt
City Power: Mid-Year Report 2015/16 Final Page 4
TABLE OF CONTENTS
CHAPTER ONE: LEADERSHIP & CORPORATE PROFILE ......................................................................................... 6
Section 1: Corporate Profile and Overview of the entity .................................................................................... 6
Section 2: Strategic Objectives ............................................................................................................................ 7
Section 3: Salient Features ................................................................................................................................ 10
Section 4: High-level organisational structure .................................................................................................. 11
Section 5: Foreword: Chairperson of the Board of City Power Rev. Frank Chikane ......................................... 12
Section 6: Foreword: Managing Director of City Power, Mr. Sicelo Xulu ........................................................ 14
CHAPTER TWO GOVERNANCE............................................................................................................................... 15
Section 1: Board of Directors ............................................................................................................................ 15
Section 2: Board Committees ........................................................................................................................... 16
Section 3: Director’s & Prescribed Officers Remuneration. .............................................................................. 18
Section 4: Company Secretarial Function ......................................................................................................... 21
Section 5: Risk Management (Including Strategic & Operational Risk Management ....................................... 21
Section 6: Internal Audit Function (Focus on Independence & Objectivity & Relations to Audit Committee) 22
Section 7: Corporate Ethics and Organisational Integrity ................................................................................. 22
Section 8: Sustainability Report ........................................................................................................................ 22
Section 9: Anticorruption and Fraud ................................................................................................................. 25
Section 10: ICT Governance .............................................................................................................................. 25
Section 11: Compliance with Laws & Regulations ............................................................................................ 26
CHAPTER THREE SERVICE DELIVERY PERFORMANCE ............................................................................................ 29
Section 1: Highlights and Achievements ........................................................................................................... 29
Section 2: Service Delivery Challenges .............................................................................................................. 29
Section 3: “Game Changers” Programmes ....................................................................................................... 29
Section 4: Capital Projects & Expenditure ........................................................................................................ 30
Section 5: Performance of Revenue Recovery Project – Milestone 2 .............................................................. 34
Section 6: Performance against Institutional IDP ............................................................................................. 38
Section 7: Supply Chain Management and Black Economic Empowerment .................................................... 43
Section 8: Statement on Amounts Owed By and To (-) Government Departments and Public Entities .......... 50
CHAPTER FOUR HUMAN RESOURCES & ORGANISATIONAL MANAGEMENT ....................................................... 56
Section 1: Human Resource Management ....................................................................................................... 56
Section 2: Employee Remuneration.................................................................................................................. 60
City Power: Mid-Year Report 2015/16 Final Page 5
Section 3: Key Vacancies ................................................................................................................................... 60
Section 4: Employment Equity .......................................................................................................................... 60
Section 5: Skills Development and Training ...................................................................................................... 61
Section 6: Performance Management & Succession Planning ......................................................................... 64
Section 7: Change Management ....................................................................................................................... 64
Section 8: Disciplinary Matters and Outcomes ................................................................................................. 65
Section 9: Leave & Productivity Management .................................................................................................. 65
Section 10: Employee Benefits ......................................................................................................................... 66
Section 11: Occupational Health & Safety Programmes................................................................................... 66
CHAPTER FIVE FINANCIAL PERFORMANCE & EXPOSURE ..................................................................................... 68
Section 1: Statement of Financial Performance and high-level notes .............................................................. 68
Section 3: Cash Flow Statement ....................................................................................................................... 75
Section 4: Ratio Analysis ................................................................................................................................... 75
Section 5: Report on Irregular, Fruitless and Wasteful Expenditure and Due Processes ................................. 75
Section 6: Pending Litigations and Possible Liabilities ...................................................................................... 75
Section 7: Insurance Claims against/to MOE .................................................................................................... 75
CHAPTER SIX INTERNAL & EXTERNAL AUDIT FINDINGS ........................................................................................ 76
Section 1: Results of Internal Audits ................................................................................................................. 76
Section 2: Progress on Resolution of Internal Audit Findings ........................................................................... 77
Section 3: Progress on Resolution of External Audit Findings .......................................................................... 79
Section 4: State of Internal Controls ................................................................................................................. 79
City Power: Mid-Year Report 2015/16 Final Page 6
CHAPTER ONE: LEADERSHIP & CORPORATE PROFILE
Section 1: Corporate Profile and Overview of the entity
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 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. Today, City Power has approximately 410 000 customers; ranging from domestic to commercial and industrial properties.
The City, 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 and distribution and sale of electricity
constructing networks
connecting customers
repair and maintenance of networks
installation and maintenance of public lighting. 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. 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 • 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: Mid-Year Report 2015/16 Final Page 7
Section 2: Strategic Objectives
THE FOCUS AREAS In the midterm review of the IDP 2011-16 the following Strategic focus areas until 2016 were agreed on:
The 5 year IDP is translated into one year plans which are called the Service Delivery Budget Implementation Plan (SDBIP). City Power’s is aligned to programmes that ensure attainment of the SDBIP.
City Power: Mid-Year Report 2015/16 Final Page 8
Focus Areas COJ Program City Power
Programme City Power Projects
Game Changer
Communications & Stakeholder Management
Stakeholder Engagement
City Power therefore needs to: 1.Communicate, promote and profile capital projects that the company is doing. 2.Communicate the value of smart meter projects in line with the development of a smart city 3.Inform customers about planned and unplanned power interruptions (through alerts) 4.Educate customers about the value of taking ownership of the electricity network within their communities. 5.Inform customers about the dates and times during which City Power will read or audit electricity meters. 6.Educate customers about the importance of paying for their services 7.Profile service delivery projects of the city within specific local areas. 8.Inform customer about community empowerment projects such as Jozi@work as well as community investment projects.
Flagship Programme
Corridors of Freedom
Infrastructure Plan & maintenance: COF
Hursthill Sub Station Upgrade Sandringham Sub Station Perth Empire Corridor Distribution Networks Phase 1 Turfontein Corridor Distribution Networks Phase 1 Wemmer and Industria Feeder Boards Replacement
Smart City Infrastructure Plan & maintenance: Smart Grid
Smart meter roll out ICT Network Upgrade to Telco Grade Last Mile Network Outage Management and Network Automation (ADMS) SAP HANA Upgrade with ISU
Green/ Blue economy
DSM Energy Management (Including DSM And SSM)
Core Mandate
Service Delivery Elevation
Revenue Recovery Project
Improve Service Charge Improve Meter Reading performance Reduce Non-Technical Losses
Outage Management
Network conditioning of Transmission networks, MV networks, LV networks and OHL’s, Street lighting and Secondary Plant Roll out of ABC
Electrification of informal settlement
Programme 1: Electrification of informal settlements 2014/15/16 Financial Year is in Setjwetla, Princess Transit Camp, Lawley Station, Northern Farm, Vukani Informal Settlement ( Near Helen Joseph Women Hostel), M1 Informal Settlement (near Madala Hostel), Elias Motsoaledi and Thembelihle.
Security of Supply Projects
Ripple Control
Smart Meter - Load limiting
Solar Water Heaters
Demand Response - Large Customer Participation
Domestic TOU Tariff
Virtual Power Station: Photovoltaic Generation (IPP), Photovoltaic Generation (Own), Stand-by Diesel Generators, Co/Tri-Generation, Waste to Energy, Solar Water Heating & Battery Storage
City Power: Mid-Year Report 2015/16 Final Page 9
BUSINESS MODEL REVIEW The City of Johannesburg has embarked upon journey to become a sustainable and smart City of the future in line with the principles of the Growth and Development Strategy 2040. Energy will be a critical component in realising this aspiration. Whilst energy is key to unlocking the economic and socio-economic development objectives, unchecked consumption of coal-based power will increase carbon and energy intensity, threaten economic and environmental sustainability and the quality of living within the City. The shareholder and the Board have mandated City Power to relook their business model and consider options with regard to a wider energy portfolio, particularly with regard to inclusion of renewables and gas. The table below shows the project progress:
Ref Deliverable/milestones Objective/ definition Completion Comment
1a Environmental scan Get an understanding of the current environment and possible industry direction
100 Automotive fuels have been added
1b. Energy plan Base on the above what are the possible energy requirements for COJ
100 Report has been shared with EISD
3 Business case review
Which energies are the best options for the COJ to get into? What is best for COJ citizens and viability?
100 Included in the report
2 Business Model options/ scenarios
Based on these energies what is the best way for the City to structure its energy business
100 Included in the report
Stakeholder engagement
Meet with different stakeholder to get inputs, buying and /or approval
70 Board and EISD approval done. Need to get political input
GO-NO-GO
Roadmap/implementation plan for the approved energies
Based on the approve energies and structure including predicted energy availability and constrains when is the best time for COJ to implement what, for cost effective value add to the citizens
95 To be finalised with stakeholder inputs
The report has been presented to the board and EISD STRATEGY MAP City Power strategic direction that is highlighted below is aligned to the GDS 2040 which is aligned to the National Development Plan (NDP) and the Gauteng 2055. The picture below shows the vision, mission, values, and business operating principles of City Power.
Vision
To be a world-class energy utility
Mission
The mission of City Power Johannesburg SOC is to meet the expectations of our customers and
stakeholders by:
• Providing a sustainable, affordable, safe and reliable energy supply
• Providing prompt and efficient customer services
• Being the preferred equal opportunity employer by developing and incentivising our employees
• Undertaking our business in an environmentally acceptable manner
What Business Are We In?
We are in the business of producing and distributing energy.
Business Operating Principles
• Customer-centric organisation
• Seamless value chain driven organisation
• Zero tolerance for poor performance
• Doing business in an ethical manner, zero tolerance for fraud and
corruption
Aspired Values
• Resourceful
• Resilient
• Reliable
• Respectful
• Always with
City Power: Mid-Year Report 2015/16 Final Page 10
Section 3: Salient Features
Below are some of the organisation’s major achievements for the mid-year.
Financial: See chapter five
Non-Financial: CP IDP
Programme KPI Unit Actual
2014/15 Plan Midyear 2015/16
Actual Midyear 2015/16
Active engaged citizenry:
Communication & Stakeholder Management
Communication & Stakeholder Management
Customer satisfaction survey
Index 66 70 47.7
Achievement of SLA % 80 53.96
Street lights TAT Days 20 2 12
Outage reduction MV (All)
Number 2 756 1 224 1 616
Outage reduction HV (All)
Number 173 64 85
HV Outages: NPR Number 72 36 21
NRS 048 Compliance % 98.90 95 98.89
NRS 047 Compliance: % 58.61 93 59.60
Restoration time: 1.5 hours
% 16.7 30 16.5
Restoration time: 3.5 hours
% 51.6 60 59.3
Restoration time: 7 hours
% 79.9 90 86.8
Restoration time: 24 hours
% 95.4 98 97.2
Expansion and strengthening of electricity
network
Provision of public Lights
Number 4 737 450 316
Flagship: Corridors of Freedom
Electrification Number 2 238 750 1 162
Flagship: Green/Blue Economy
Security of supply/Demand Side
Management
Reduction in GHG t CO2e/MWh Not measured 380 232
Energy Mix MWh Not measured 338 125 206 256
Solar water heaters Number 19 043 1 000 610
Ripple relay roll out Number Not measured 4 800 5 912
Flagship: Smart City Smart Grid Meter Rollout Number 72 858 20 435 26 293
Jozi@work
Jozi@work
R&M spent on J@W % 10 0
Capital spent on J@W % 5 6.76
Socioeconomic Development
EPWP Number 5 003 2 500 771
50% Black owned companies
% 14.58 12 38.19
30% women owned company
% 6.88 10 14.98
Payment Levels ( Current consumption)
% 95.66 98 95.01
Meter Reading performance
% 67.47 98 58.9
Losses
Technical
Non-Technical
% 23.83 13.5 27.27
% of ESP customers with FBE provided
% 100 97 100
Resource sustainability, safer
city, governance
Business efficiency and effectiveness
ISO accreditation Audit Report Unqualified audit with minor findings per accreditation
Clean audit report
Not started
Attainment of an unqualified audit report
Audit Report Unqualified with matter of emphasis
Clean audit report
Not started
DIFR Ratio 0,.45 <1 0.35
City Power: Mid-Year Report 2015/16 Final Page 11
Section 4: High-level organisational structure
BOARD
Sicelo XuluManaging Director
Lebo MaroaneExecutive PA
Mark SmithCompany Secretary
Stuart WebbActing Director: Engineering
Operations
Tshidiso NkgoediDirector: Retail Services
Quentin GreenDirector: Finance
Mdu NzimandeDirector: Engineering
Services
Felicia MsizaDirector: Risk Assurance &
Compliance
VacantDirector: Human Resources
Lungi MbewuGM: Strategy
Louis PieterseStrategic
Excecutive
Yumna Sheik
GM: Aide-de-Camp
Sol MasoloGM: Relationship
Management
City Power: Mid-Year Report 2015/16 Final Page 12
Section 5: Foreword: Chairperson of the Board of City Power Rev. Frank Chikane
____________________________________________________________________ Over the last the last six months or so City Power has focused on the Business Model Review and notable progress has been made. City Power will shortly be in a position to present proposals to the shareholder for implementation. The strategic priorities of the City of Johannesburg, as the sole shareholder of City Power, drive strategic plans of the Company and significant attention is given to ensure that these priorities are implemented in the form of measurable targets and deliverables. The strategic priorities of the City of Johannesburg are contained in the Growth and Development Strategy (GDS) and in the Integrated Development Plan (IDP) of the City of Johannesburg and have also been reduced to a signed Shareholder’s Compact. City Power has incorporated these performance measurements into this report. City Power has performed relatively well on its financial ratios, however, the mid-year of the 2015/16 financial year reflect a negative surplus before taxation. The reported level of Capital expenditure against target for the mid-year is below target, however it is anticipated that this will be “caught up” in the subsequent quarters as has happened in previous financial years. The Board remains concerned about the progress on revenue as well as the high level of losses. The Board is advised that the current spike in increase in the level of losses for the mid-year relates primarily to synchronisation issues between the billings received from ESKOM and the date at which City Power invoices its domestic customers. The Revenue Recovery project is continuing in its efforts to improve meter reading performance and have advised the Board that the second quarter of 2015/16 should reflect a substantial improvement in this regard with concomitant improvements in revenue and losses. The overall mid-year performance has been marked with several achievements on our sustainability journey. City Power has exceeded the percentage spend to Black Owned Companies and Black Woman Owned Companies, and the disabling injury frequency rate remains consistently below the acceptable target level of 1. In addition, it is also encouraging that HV NPR outages and maintenance of a high quality of supply (NRS 048) objectives have been met. The maintenance of street lighting remain a challenge, despite a small improvement in performance during the quarter. The Board and Management remain resolute to attaining continuous improvement in achieving strong financial and operational results and contributing to the vision of a world-class electricity distributor. The strategic priorities of the shareholder, as always, drive our tactical plans. City Power has regrettably, during the period under review, been confronted with a demand by the SAMWU Leadership for the suspension of the Managing Director. The Board, including the Board Chairperson, has given repeated undertakings to address any issues of corruption at every level within the Company, provided that such allegations are substantiated. The Board and the Chairperson invited SAMWU to present any evidence to substantiate its allegations and up to date no evidence was submitted. The Board had in the interim concluded its own investigation into the allegations. At a meeting held on 30 October 2015, a full report, which cleared the MD of corruption in any of the matters alleged by SAMWU, was tabled before Board and Board agreed that based on its own findings, there was no indication of corruption on the side of the MD as alleged by SAMWU. However in the interest of resolving the strained relationship between Management and SAMWU it was also agreed that a relationship facilitator be engaged to assist with smoothing out the relationship between the parties. That has been done and the Facilitator has already commenced with the process. City Power has a zero tolerance of any form of corruption and remains committed to addressing any substantiated issues of corruption in a transparent and fair manner.
City Power: Mid-Year Report 2015/16 Final Page 13
The governance processes of the Board are designed to ensure that the Board and its sub-committees carry out their responsibilities effectively. The attendance at Board and sub-committee meetings is a reflection of the strong commitment of the Members and the Chairperson is pleased with the robust participation of all the Members. The Board and Management are committed to ensuring good corporate governance, sound business practices and transparent compliance to legislation while delivering and improving, sustainable and reliable service. _____________________________________ Rev. Frank Chikane Chairperson of the Board City Power Johannesburg
City Power: Mid-Year Report 2015/16 Final Page 14
Section 6: Foreword: Managing Director of City Power, Mr. Sicelo Xulu The mid-year of 2015/16 financial year results of City Power shows an effort of the company to meet and exceed the expectations of our shareholder as reflected in the service delivery objectives in our company scorecard. City Power is currently reviewing its business model, in preparation for moving towards being an energy company. The drivers for the change are:
• Increasing and securing the supply of energy • Acquiring electricity from renewable and alternative sources • Reducing greenhouse gas emissions • Strategic use of a mix of technologies and energy sources to achieve goals
The strategic priorities of the City of Johannesburg, as the sole shareholder of City Power, drive strategic plans of the company and significant attention is given to ensure that these priorities are implemented in the form of measurable targets and deliverables. The strategic priorities of the City of Johannesburg are contained in the Growth and Development Strategy (GDS) and in the Integrated Development Plan (IDP) of the City of Johannesburg. In the midterm review of the IDP 2011-16, the following Strategic focus areas were agreed upon and the game changers are Communication and Stakeholder Management. Flagship programmes consist of Corridors of Freedom, Jozi@work, Green and blue economy and Smart City. Our core mandate continues to focus on elevating service delivery to meet new prescribed standards. The financial performance of City Power remains a challenge during the mid-year under review, however the team is working hard to turn the current situation around. South Africans are pressured by electricity price increases, which translate into lower electricity consumption by consumers. Whilst this results in reduced revenue for City Power, it is important for the country’s electricity supply stability and helps to meet the goals of a lower carbon economy. We have viewed lower consumption as a call to find more innovative and cost effective ways of achieving service delivery. The mid-year has been marked with only achieving 37% of the IDP key performance indicators An improvement in service delivery has been seen through the reduction of network performance related outages at the High Voltage level. This can be attributed to the preventative maintenance strategy which involves the purchase and utilisation of various types of test instruments, to detect early signs of equipment breakdown. Compliance to the NRS048 has been achieved as well. The number of households with access to basic electricity services is 469 073 – an increase on last year’s performance. The maintenance of street lighting however remain a challenge resulting in an average of 12 days to repair public lights against a target of 2 days. Expansion and strengthening of the network targets were not met due to the slow progress in building houses. Electrification and provision of public lights goes hand in hand with the building of houses. Management remain committed to continuous improvement in attaining strong financial and operational results and contributing to the vision of a world-class electricity distributor. The strategic priorities of the shareholder, as always, drive our tactical plans. _________________________ Mr. Sicelo Xulu Managing Director City Power Johannesburg
City Power: Mid-Year Report 2015/16 Final Page 15
CHAPTER TWO GOVERNANCE
Section 1: Board of Directors
City Power has a unitary Board, which consists of Executive and Non-Executive Directors. During the year under review one Non-Executive Directors and one Independent Audit Committee Member resigned. During the year under review, the Board was chaired by a Non-Executive Director, Rev Frank Chikane. 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, the MFMA and the MSA. Such reports are submitted within the stipulated timeframes. Non-Executive Directors contribute an independent view to matters under consideration and add to the depth of experience of the Board. The roles of Chairperson and Managing Director 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. A director and peer review as well as a Board evaluation are undertaken on an annual basis. The Memorandum of Incorporation provides that the Directors of the Company will be elected by the Shareholder and appointed by the Board of Directors. The Managing Director is appointed by the Board in consultation with the Shareholder. Attendance at meetings held during the year was as follows:
Directors Board HR Risk,
Assurance & Compliance
Social & Ethics
Quarterly Review
Audit Ad Hoc - RRP
NR OF MEETINGS HELD FOR THE FINANCIAL YEAR
7 3 3 2 2 4 5
Rev. F Chikane 6 - - 2 2 - 2
Mr. NE Galawe (resigned – 31 Oct ’15) 5 of 5 - - 1 of 1 2 of 2 - 4 of 4
Mr. QB Green
6 2 3 2 2 4 3
Mr. NSA Hlubi 6 - 2 - 1 4 -
Mr. VG Lukhele 6 3 3 1 - - -
Ms. SK Makotoko 5 2 2 - - - 4
Ms. NP Mohlala
7 3 - 2 2 - -
Mr. DR Mokhobo
5 - - - 1 2 5
Mr. D Naidu
7 - 3 - 2 - 5
Mr. TI Sithole
6 3 2 - - 3 -
Mr. SG Xulu 5 1 3 1 2 2 5
Independent Audit Committee
Ms. LJ Fosu (resigned 13 Jul 2015) - - - - - - -
Mr. W Hattingh 1 - - - - 4 -
Ms ML Shongwe - - - - - 1 -
DATES OF MEETINGS :
City Power: Mid-Year Report 2015/16 Final Page 16
Section 2: Board Committees
The Board has the following Committees and working groups to assist it in carrying out its responsibilities. Each committee is chaired by a Non-Executive Director.
Audit Committee
Human Resources Committee
Risk, Assurance & Compliance Committee
Social and Ethics Committee
Quarterly Review Committee
Special Ad Hoc Committee – Revenue Recovery Project 2.1 Audit Committee The Audit Committee consists of the following Non-Executive Directors and Independent Audit Committee Members:
Nhlanhla Hlubi (Chairperson)
Khati Mokhobo
Thulani Sithole
Linky Fosu (resigned – 13 Jul 2015)
Waldo Hattingh
Matseliso Shongwe The Committee met four times during the period under review. The role of the Audit Committee is to assist the Board by performing an objective and independent review of the functioning of the Company’s finance, accounting and risk control mechanisms. It exercises its functions through close liaison and communication with senior management and the internal and external auditors. The Audit Committee operates in accordance with a written Terms of Reference authorised by the Board, and provides assistance to the Board with regards to:
o Ensuring compliance with applicable legislation and the requirements of regulatory authorities o Matters relating to financial accounting, accounting policies, reporting and disclosures o Matters relating to risk management o Internal and external audit policy; o Activities, scope, adequacy and effectiveness of the internal audit function and audit plans o Reviewing and recommending the approval of external audit plans, findings, reports and fees o Reviewing and recommending the approval of strategic risks and mitigating strategies o Compliance with the Code of Corporate Practices and Conduct o Compliance with the Code of Ethics; and o Recommend and provide input into the multi-year Business Plan
The Audit Committee adequately addressed its responsibilities in terms of the Committee’s Terms of Reference during the period. 2.2 Human Resources Committee The Human Resources Committee consist of the following Non-Executive and Executive Directors:
Nomaswazi Mohlala (Chairperson)
Quentin Green
Vusi Lukhele
Shiva Makotoko
Thulani Sithole
Sicelo Xulu The Committee met three times during the period under review. The Human Resources Committee advises the Board on remuneration policies, remuneration packages and other terms of employment for employees including all Directors and senior Management. Its specific Terms of Reference also include recommendations to the Board on matters relating to general staff policy, remuneration, performance bonuses, executive remuneration, Director Remuneration, fees and service
City Power: Mid-Year Report 2015/16 Final Page 17
contracts, performance compact, and compliance with relevant legislation and strategic alignment with the objectives of the Company. 2.3 Risk, Assurance & Compliance Committee The Risk, Assurance & Compliance Committee consists of the following Non-Executive and Executive Directors:
Dayalan Naidu (Chairperson)
Nhlanhla Hlubi
Vusi Lukhele
Shiva Makotoko
Thulani Sithole
Sicelo Xulu
The Committee met three times during the period under review. The Committee assists the Board in exercising oversight over regulatory and legislative compliance. The Committee also maintains oversight over the implementation of the Company’s Supply Chain Management Policy in terms of the Local Government: Municipal Finance Management Act (56/2003): Municipal Supply Chain Management Regulations (Gazette no. 27636/ 30 May 2005), Section 6(a). The Risk, Assurance & Compliance Committee adequately addressed its responsibilities in terms of Enterprise Risk Management and Safety, Health & Quality Assurance as per the Committee’s Terms of Reference during the period. 2.4 Social and Ethics Committee The Social and Ethics Committee consists of the following Non-Executive and Executive Directors: Nceba Galawe (Chairperson) (resigned on 31 Oct 2015)
Frank Chikane
Quentin Green
Vusi Lukhele
Nomaswazi Mohlala
Sicelo Xulu The Committee met twice during the period under review. The Social and Ethics Committee advises the Board on the institutionalisation of ethics in the internal structures, systems and processes of the company. The Social and Ethics Committee ensures that there is strong emphasis on the responsibility of the Company towards the communities in which the company operates, social transformation within the workplace, and the protection of the safety, health and dignity of employees. The Social and Ethics Committee adequately addressed its responsibilities in terms of the Committee’s Terms of Reference during the period. 2.5 Quarterly Review Committee The Quarterly Review Committee consists of the following Non-Executive Directors:
Frank Chikane (Chairperson) Nceba Galawe (resigned on 31 Oct 2015)
Nhlanhla Hlubi
Nomaswazi Mohlala
Khati Mokhobo
Dayalan Naidu The Committee met twice during the period under review. The Committee exercised oversight over the Company’s performance on a quarterly basis and reviews the Quarterly Reports and Mid-year Report prior to submission to the MMC: Environment, Infrastructure and Services Delivery. These reports are used for the purpose of evaluating the performance of the Company
City Power: Mid-Year Report 2015/16 Final Page 18
on a quarterly basis by the Shareholder. The Performance of the Company is measured in terms of predetermined goals and strategies as set out in the Company’s Business Plan. 2.6 Special Ad Hoc Committee – Revenue Recovery Project
The Special Ad Hoc Committee – Revenue Recover Project consists of the following Non-Executive and Executive Directors:
Khati Mokhobo (Chairperson)
Nceba Galawe (resigned on 31 Oct 2015)
Dayalan Naidu
Shiva Makotoko Quentin Green Sicelo Xulu
The Committee met five times during the period under review.
The purpose of the Committee is to exercise effective oversight and monitoring of the Revenue Recovery Project. The main objectives of the Revenue Recovery Project are to reduce non-technical losses by accurately measuring and recording consumption of customers, ensure accurate monthly billing for customers, and to improve revenue performance and to recover losses. The main role of the Committee is to monitor City Power and the City of Johannesburg’s plan to manage Revenue in a sustainable manner and to report to the Board and the Shareholder on the performance of the Revenue Recovery Project.
Section 3: Director’s & Prescribed Officers Remuneration.
Non-Executive Directors' Remuneration 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 and annual retainer fees for Non-Executive Directors and Independent Audit Committee Members of City Power are determined by the Shareholder. The rates applicable for financial year was determined by the Mayoral Committee resolution passed on 05 March 2015, effective from 03 February 2015, and will remain in force until amended by Group Governance, or the Mayoral Committee, as the case may be. An annual retainer fee is payable to Non-Executive Directors and Independent Audit Committee Members, where they qualify for the retainer to be paid (e.g. 60% or more attendance of all required meetings). Non-Executive Directors’ and Independent Audit Committee Members’ fees are only paid in accordance with City Power’s approved budget.
Executive Director’s
Name Position TOTAL R'000
Mr. S Xulu Managing Director 1 584
Mr. Q B Green
Director: Finance 1 319
Total 2 903
City Power: Mid-Year Report 2015/16 Final Page 19
Non-Executive Directors: Current
Name Position TOTAL R'000
Rev. F Chikane Chairperson 264
Mr. NE Galawe (resigned – 31 Oct 2015) Board Member 132
Mr. NSA Hlubi Board Member 163
Ms. Z Hlatshwayo (retired –03 Feb 2015) Board Member 1*
Mr. VG Lukhele Board Member 116
Ms. SK Makotoko Board Member 115
Ms. NP Mohlala Board Member 155
Mr. DR Mokhobo Board Member 160
Mr. D Naidu Board Member 186
Dr. Y Ndema (Resigned – 30 Sep 2014) Board Member 7*
Mr. TI Sithole Board Member 150
Total
1 449
(*Note: The Annual Retainer Fee for 2014/2015 FY was paid to NEDs at end of Jul 2015.)
Independent Audit Committee Members
Name TOTAL R'000
Ms. L J Fosu (resigned – 13 Jul 2015) Independent Audit Committee Member 1*
Mr. W Hattingh Independent Audit Committee Member 71
Mr. H Moolla (Retired – 03 Feb 2015) Independent Audit Committee Member 17*
Ms. ML Shongwe Independent Audit Committee Member 22
Total 111
(*Note: The Annual Retain Fee for 2014/2015 FY was paid to IACs at end of Jul 2015.) (The vacancy left by Ms LJ Fosu has not been filled.)
Executive Committee Members (as at 31 December 2015)
Name Position TOTAL R'000
Ms. MS Mafora (Contract ended 31 Dec 2015) Director: Human Resources 501
Ms. NF Msiza Director: Risk, Assurance & Compliance 1 159
Mr. TG Nkgoedi Director: Retail Services 944
Mr. TM Nzimande Director: Engineering Services 978
Mr. DL Pieterse Strategic Executive 926
Mr. GS Webb (Acting from 10 Nov 2014) Acting Director: Engineering Operations 683
Mr. MJ Smith Company Secretary 655
Mr R Smith Project Director: RRP 877
Total 6 723
City Power: Quarterly Report 2015/16 Final Page 20
SENIOR MANAGEMENT REMUNERATION
SURN
AM
E
INIT
S
POSI
TIO
N
SALA
RY
RETI
REM
ENT
FUN
D
MED
AID
UIF
TRA
VEL
ALL
OW
AN
CES
REIM
-TRA
VEL
& S
UBS
IST
GLA
SDL
PERF
BO
NU
S
TOTA
L
Gamede SE General Manager: Field Services PP South 543 74 - 1 41 8 - 37 7 72 783
Golden RA General Manager: HR Business Support 531 80 22 1 51 8 - 41 8 128 869
Govender J General Manager: Engineering Workshop 535 82 43 1 74 8 - 42 8 129 922
Hlatshwayo TG General Manager: Nerve Centre 530 70 - 1 - 8 - 36 7 116 768
Hlongwa NP General Manager: Capital Programme Exec. 393 68 65 1 57 8 - 35 8 95 729
Hlubi NR General Manager: OE 521 83 29 1 77 8 - 42 8 138 906
Lembede XP General Manager: Infrastructure Planning 473 75 31 1 65 8 5 38 7 124 827
Magida LV General Manager: Energy Management 448 75 56 1 58 51 3 38 6 - 736
Maropefela K General Manager: Employee Relations 146 23 16 0 18 3 - 16 4 - 227
Masolo CS General Manager: Relationship Management 202 30 11 0 11 3 - 18 5 -25 254
Matsheketsheke LD General Manager: Bus. Financial Support 427 69 34 1 57 8 - 35 7 117 753
Mazibuko RHB General Manager: Field Serv. Sec Plant 427 63 - 1 45 8 - 32 6 67 648
Mbewu NS General Manager: Strategy 457 70 40 1 31 8 - 35 6 18 666
Mochela A General Manager: ICT 407 66 39 1 48 8 14 33 6 103 725
Mphahlele MP General Manager: Metering Field Services 512 74 - 1 42 8 - 37 7 73 754
Msomi NW General Manager: Field Services PP North 462 73 31 1 55 8 - 37 6 66 739
Nakeng B General Manager: Talent Management 455 73 31 1 60 8 - 37 7 117 789
Nsele NP General Manager: Assets Management 520 78 69 1 - 8 - 40 7 126 848
Pienaar N General Manager: Management Accounting 497 66 - 1 - 8 - 33 6 111 723
Pillay L General Manager: Financial Reporting 474 78 43 1 74 8 - 40 7 133 858
Ramagaga IM General Manager: Availability of Supply 451 62 15 1 - 8 - 31 6 61 634
Seabela RM General Manager: Data & Process Govern. 491 73 15 1 45 8 - 37 7 121 798
Setshedi L General Manager: Technology Services 471 73 21 1 55 8 - 37 7 101 774
Sheik Y General Manager: Aide-de-Camp 532 75 - 1 60 8 - 38 6 5 725
Tefu JL General Manager: SHEQ 352 63 73 1 47 8 - 32 6 97 678
Truter TL General Manager: Security Risk Mgmnt 398 58 - 1 49 8 - 30 6 90 639
Ngubane NN General Manager: RAC 584 81 - 1 24 22 - 41 8 108 868
TOTAL 12 239 1 854 683 23 1 143 265 21 945 175 2 291 19 640
City Power: Quarterly Report 2015/16 Final Page 21
Section 4: Company Secretarial Function
The Company Secretary is responsible for providing guidance to the Board collectively and to the Directors individually. The Directors have unlimited access to the Company Secretary who advises the Members, the Board and the Sub-Committees regarding their duties and responsibilities. The Company Secretary in conjunction with the Risk, Assurance and Compliance Group, is responsible for advising the Board of applicable legislation and regulations and ensuring the Board acts in compliance therewith including with the Company’s policies and procedures. The Company Secretary is also responsible for the proper administration and good corporate governance of the Board proceedings and all matters relating to the Board.
Section 5: Risk Management (Including Strategic & Operational Risk Management
Background
Enterprise Risk Management (ERM) is the holistic management of all risks. It is a structured, consistent and continuous process across the whole of City Power for risk identification, assessment, decision making and reporting. The Enterprise Risk Management Framework is the set of components for designing, implementing, monitoring, reviewing and continually improving risk management throughout City Power. ERM is a process, effected by City Power’s Board of Directors, management and other personnel, applied in strategy setting and across the business aimed at identifying potential events that may affect the company and manage risk to be within the approved Risk Appetite and to provide reasonable assurance regarding the achievement of City Power’s objectives. The Risk Management Policy, Strategy and Methodology were developed and approved by the Board in January 2014. The Policy, Strategy and Methodology are in line with:
Municipal Finance Management Act 56 of 2003;
ISO 31000:2009;
King III report on Corporate Governance;
Enterprise Risk Management and Control Framework – COSO;
CoJ Group Risk Management Framework;
City Power Leadership Charter; and
National Treasury Risk Management Framework.
STRATEGIC RISKS
Top 10 Risks The Revised Risk Register was developed with the Revised Top 10 risks are listed below and a brief summary of the Revised Top 10 risks. Risk 1: Excessive Non- Technical losses and declining revenues Risk 2: Inability of the Capital Programme to respond to the strategic requirements, further exacerbated by
poor execution or failure to deliver Risk 3: Inadequate network maintenance planning or execution Risk 4: Poor Project/Programme Management (New Risk) Risk 5: Fragmented and outdated ICT platforms which fail to support wither the strategic or operational
requirements Risk 6: Lack of capacity and capability (inadequate /insufficient skills) for both current and future business
needs Risk 7: Excessive use of Contractors (New Risk) Risk 8: Failure to modify the business model to changing environment and customer requirements Risk 9: Non-compliance to key legislation and regulations and in particular supply chain practices .
(Fraud and Corruption) Risk 10: Non-compliance to key legislation and regulations
City Power: Quarterly Report 2015/16 Final Page 22
Section 6: Internal Audit Function (Focus on Independence & Objectivity & Relations to Audit Committee)
The City Power’ internal audit function is mandated by the audit committee to provide independent, objective assurance and consulting services designed to add value and improve the organisation’s management, administration and operations. In accordance with the approval of the audit committee, the Internal Audit three year audit plan is based on the key company strategic risks to evaluate and improve the effectiveness of risk management, control and governance processes within the organisation. The annual plan covered various reviews across the company’s divisions and departments. This ensures that the audit coverage is focused on and identifies areas of high risk. The audit committee reviews the Internal Audit’s performance on a quarterly basis regarding the reviews conducted on the company’s system of internal control, risk management and governance processes. The Internal Audit authority is derived from the Internal Audit Charter which is reviewed on an annual basis and approved by the audit committee.
The Internal Audit function reports administratively to the Managing Director and functionally to the Audit Committee and has direct access to the chairperson of the audit committee.
Section 7: Corporate Ethics and Organisational Integrity
The Company has a Code of Conduct (‘the Code”) which has been fully endorsed by the Board and applies to all Directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism. In summary the Code requires that at all times, all company personnel act with utmost integrity and objectivity and in compliance with the letter and spirit of both the law and company policies. Failure by employees to act in terms of the Code results in disciplinary action. The Code is discussed with each new employee as part of his or her induction training and all employees are asked to sign an annual declaration confirming their compliance with the Code. A copy of the Code is available to interested parties upon request. A toll-free anonymous telephone facility exists for reporting of non-adherence to the Code or ethic related matters. Furthermore, any breach of the Code is considered a serious offence and is dealt with accordingly; as a result, this acts as a deterrent. The directors believe that ethical standards are being met and fully supported by the ethics programme.
Section 8: Sustainability Report
8.1 Safety and Quality
Employee Safety
The SHEQ department is the custodian of Integrated SHEQ Management System based on ISO Standard requirements comprising of ISO 9001 (Quality Management), 14001 (Environmental Management) and OHSAS 18001 (Health and Safety Management) Systems has proven record for continuously improvement regarding Safety, Health, Environment and Quality. The DIFR has continued to remain below the international threshold of <1. Disabling Injury Frequency Rate (DIFR) is currently at 0.58. During this period under review City Power did not experience any employee fatality. Public Safety
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 there has been 3 public fatalities recorded (Controllable - 1 and Non-Controllable 2). The Public Fatalities: Controllable KPI refers to the number of public fatalities due to electricity related incidents caused by City Power. In an effort to maintain low controllable public fatalities, Public Fatalities: Non-controllable KPI refers to the number of public fatalities that are mainly due to electrocution as a result of various factors such as customer negligence, tampering with electricity installations, attempted theft and vandalism of infrastructure, etc.
City Power: Quarterly Report 2015/16 Final Page 23
Intervention measures
In an endeavour to educate our customers and communities, City Power conducts staff and contractor training and awareness campaigns to ensure greater awareness within communities of the danger of electricity.
Joint operations on illegal connections conducted by City Power, Transnet, JMPD forms an integral part of an effective safety campaigns.
Our integrated program ensures compliance to the relevant legal, regulatory and standard requirement.
City Power continuously monitors the effectiveness of its safety programs to protect and safe guard against all risks and impact related to its activities.
8.2 Environmental Management (ISO 14001:2004)
City Power is certified by the South African Bureau of Standards (SABS) in addressing all environmental management challenges. In ensuring that the business remains committed to undertaking its processes in an environmentally acceptable manner without compromising quality. The system is effectively monitored and managed. For the period under review, City Power and other key stakeholders is in the process of reviewing the impact of the Ferndalespruit whereby sleeve pipes were installed below the stream. This activity normally triggers the Environmental Impact Assessment (EIA) and the Basic Assessment Process (BA) in terms of 2010 Regulations. Based on this section, City Power is in the process of addressing the non-conformance with the relevant governmental institutions (Gauteng Department of Agriculture and Rural Development, Water Affairs, CoJ, Environmental Affairs) to rehabilitate the Ferndalespruit and get the authorisation as stipulated by the National Environmental National Act (NEMA). Conceited 8.3 Occupational Health (OHSAS 18001:2007)
City Power considers its employees, customers, contractors and members of the public to be its most valuable assets. The Occupational Health Department continues to periodically assess the health of exposed population. For the period under review in line with the CoJ’s 2040 GDS, a number of activities and programs were successfully achieved:
Cancer Awareness Campaign was conducted on the 13th October 2015. This was in partnership
with the Department of Health (Region F), Wits Health Institute and Moso consultants. Out of
20% uptake of employees 76% were male participants and 24% female participants. All
abnormal results were referred to external Practitioners by the company Doctor. The prevalence
of cancer amongst City Power employees remain a concern.
Successful procurement of services of a Gym Instructor (freelancers) as part of the gym
turnaround strategy.
COID Process:
o Noticeable improvement in terms of the late reporting of COID claims which carries a fine of
R700.00 per late claim.
o Successful rehabilitation and reintegration of an employee who sustained severe burn
injuries whilst working on the network.
o Maintained reportable work related diseases at zero (0)
8.4 Employee Assistance Program (EAP)
EAP is designed to timeously identify and assist with the recovery of those employees whose personal
problems may adversely affect their job performance to the detriment of business productivity.
For this reporting period the following programs were provided and implemented:
8.4.1 Therapeutic Program
Professional counselling
Crisis intervention
City Power: Quarterly Report 2015/16 Final Page 24
Critical incidence stress debriefing
Personal debt and financial management
Substance abuse and addiction
Stress and psychological disorder
Marital, family relationships and domestic violence
8.4.2 Preventative and Awareness Program
EAP creates awareness and empowers employees regarding work and personal challenges that
impairs employee’s performance. Below are the programs that EAP embarked on:
A successful 16 Days of Activism against Gender Based Violence program was conducted for
City Power female and male employees respectively on the 4th and 8th December 2015.
Donated 100 blankets and snacks at Soweto Old Age Home.
Donated 60 blankets and snacks at Carl Sithole Childrens Home at Pimville, Soweto.
Participated on World AIDS Day Commemoration which was held on the 1st December 2015
8.5 HIV Management
HIV/AIDS continues to be a major contributor of the burden of disease in South Africa. The main aim of this health profile is to highlight the impact of the HIV epidemic on the organization and continue with the mitigating interventions that are in place. City Power aligns itself with the South African National AIDS Council (SANAC), the National Health Policy, HIV risk management programme, chronic health management programme, and it associates with HIV experienced interventionists, pharmaceutical expects and others thus :
Improving the quality of life
Increasing individual life expectancy
Improving and increasing ART compliance and adherence
Reduce opportunistic infections and co- infections
Reduce absenteeism
Increase productivity
Improve the general wellbeing of clients and employees
The in house HIV programme registered eighty six (86) clients who are on the Disease Management
Programme
Seventy one (71) are on ART
Fifteen (15) are on pre ART or prophylactic therapy
Family members on supportive therapy ten - (10)
Contractors on supportive therapy – ten (10)
Clinic transfers – two(2) due to retirement
Deaths - two (2) due to complicated diabetes and pneumonia respectively
The World AIDS Day Commemoration (01 December 2015)
Three hundred and seventy (370) clients were tested for HIV and six (6) tested POSITIVE.
Further pathological investigations are conducted on the six
Other screening which were available included – blood grouping and iron levels
The massage therapist recorded 400 clients who participated on that day.
Sustainability risks The Board acknowledges its overall accountability for ensuring an effective results-driven integrated risk management process. Exco has implemented a risk control system to enable management to respond appropriately to significant risks that could impact negatively or positively on business objectives. Risk reviews are conducted with input from divisional and functional areas. Risks are identified and ranked by
City Power: Quarterly Report 2015/16 Final Page 25
divisions and groups, reviewed, and then assessed by Exco, the Audit Committee, and the Board to determine the major operational, strategic and business continuity risks. The ratings of the risks are finalized after considering the mitigation plans, and executive accountability is assigned for each of the risks.
Section 9: Anticorruption and Fraud
The company has adopted a zero tolerance towards fraud and corruption. The Anticorruption and fraud policy is reviewed on an annual basis and is approved by the Audit Committee. Various anti-corruption and fraud campaigns have been conducted during the period under review, which focused on preventative measures pertaining to fraud and corruption as well as the importance of whistle blowing. On the 9th of December 2015, a very successful commemoration of the annual World Anti-Corruption day was held at City Power where more than 300 employees attended. Key members of management took to the podium to share with fellow colleagues challenges that corruption and fraud possess to City Power and South Africa as a whole. A whistle blow policy is also in place to encourage both employees and members of the public to report any fraud and corrupt activity to an independent dedicated tip off anonymous communication channel. Quarterly reports have been made to the Audit Committee regarding issues pertaining to fraud and corruption as well as resolution thereof. Reports indicating quarterly resolution of tip offs are presented to the Audit Committee on a quarterly basis.
Section 10: ICT Governance
ICT Governance is defined as 'specifying the decision rights and accountability framework to encourage desirable behaviour in the use of Information Communications Technology (ICT). Corporate Governance of ICT (CGICT) encompasses two levels of decision-making, authority and accountability to satisfy the expectations of all stakeholders:
(a) Facilitating the achievement of a department’s strategic goals - CGICT; and (b) The efficient and effective management of ICT service delivery - Governance of ICT (GICT).
In order to align ICT with its direct and indirect customers, Engineering Services: ICT embarked on a project to establish the ICT strategy which encompassed two main facets:
1) ICT Governance Framework 2) ICT Policy Landscape
The project addressed each of the above facets individually while capturing the logical interface / interaction points between them.
This is intended to ensure that the ICT direction is in alignment with the City Power’s Core Business road map and to effectively support the Enterprise Architecture. The aforementioned will set the tone to expand the ICT capability to support future business requirements and will serve as a platform for planning and envisioning future projects.
The Department of Public Service and Administration (DPSA) has developed a Corporate Governance of Information Communications Technology Policy Framework (CGICTPF) for all government departments and state owned companies (SOC). Over and above the DPSA CGICTPF, South African Local Government Association (SALGA) has also developed the “Municipal Guide / Roadmap to Successful ICT Governance” which incorporates the DPSA CGICTPF.
City Power: Quarterly Report 2015/16 Final Page 26
10.1 Value Realisation
Investment Investm
ent
Benefit ROI
1. SAP Mobility R5mil Ability to transact faster and reduce long turnaround
times in releasing Service Requests, POs, and Service Entries. Work Force management and staff location for
improved service delivery and efficiency by
electronically capturing work orders and locating the position of the engineer
Project is still in
rollout phase but
we expect this to
increase image of
City Power on
turnaround times
2. SharePoint R5mil Reduction of disk space due to duplication, security of
files and ability to search enabling corporate knowledge
management. Re-use of existing information saving on consulting cost.
R 10 mil and more
3. Microsoft
Infrastructure
R5mil Stabilisation of the ICT platform result in availability of
email, and other systems dependent on the platform R 10 mil and more
4. Datacentre R1mil Stabilisation of the power and air-conditioning to avoid
disaster and also comply to audit requirements R 10 mil and more
5. Force Link R5mil Replacement of eResponse which was unstable and problematic resulting in incorrect stats thereby impact
image of City Power
R 10 mil and more
6. Enterprise
Service
Management
R3mil Accountability from all business units, ICT and Service Providers resulting in value for money and improved
service delivery internally and externally
R 10 mil and more
7. ICT Governance R5mil Creating a stable and world class digital City Power
company with Enterprise Architecture standards and
related governance artefacts resulting in City Power good performance services that are predictable and repeatable
R 10 mil and more
10.2 ICT Business Cases
Business Area Business Case Required
Status Indicator
Top management laptops compiled
A Business Case has been prepared
Approved
Electronic Board
system. A Business Case has
been prepared
Approved
Infrastructure
Optimisation A Business Case has
been prepared
Approved
Enterprise Project
Management A Business Case has
been prepared
Approved
LoadShedding
Mobile App A Business Case has
been prepared
Approved
SharePoint
(LoadShedding Enhancement)
A Business Case has been prepared
Approved
Business Process Automation
A Business Case has been prepared
Approved
City Power: Quarterly Report 2015/16 Final Page 27
10.3 ICT Strategy (Status on Implementation of the Strategy)
Strategy Item ICT Area Initiative Milestone Indicator
Project Status
ICT Governance Institutionalization
Governance Enhancement of governance structure and reporting;
Review ICT Governance framework to ensure that it complies to DPSA and SALGA terms of reference regarding Governance of ICT - Review the Alignment of Corporate Governance of ICT Policies Framework to City Power
81%
Infrastructure Optimisation; SAP Optimisation & Institutionalisation
Operations Active Directory, Exchange, SharePoint, System Centre VM Manager, SQL, Skype, Security, Software
95%
Active Directory Penetration Test & Vulnerability Assessment and APN Penetration Test & Vulnerability Assessment
95%
AP Workforce Design, SAP ABAP, SAP EHB Upgrade, SAP HCM Design & Blueprint, SAP Institutionalisation Resources
10%
SharePoint – Load shedding Enhancement, Change Management, SharePoint Support Services
90%
Enterprise Architecture
Architecture Review ICT Architecture and provide in-depth analysis & mapping, as well as provide
85%
City Power: Quarterly Report 2015/16 Final Page 28
the final enterprise architecture plan covering:
o Strategic applications;
o Selected core applications (Metering, Outage Management/ADMS, Integrated Smart Grid Security); and
o Collaboration applications (VoIP, Lync, SharePoint, Programme / Project / Activity Management from collaboration perspective)
Enterprise Service Management
ICT Service Management
Implementation of Service Management Solution
0%
10.4 ICT Governance, Audit, Risk & Compliance ICT Governance
Development of Governance Framework Good
Development of proposed policies
Development of the ICT Charter
Development of the ICT Steering Committee through NACVC
Development of the ICT Strategy
Implementation of Risk Management
Development of ICT Continuity Plan
Implementation of Information Security Management
Section 11: Compliance with Laws & Regulations
As a first level assurance to the board our intervention in monitoring compliance has increased the level of awareness and importance of compliance within City Power. Our intervention is done through conducting compliance audits. During the mid-year we have conducted audits in the Engineering Operations and Retail Services Departments.
City Power: Quarterly Report 2015/16 Final Page 29
CHAPTER THREE SERVICE DELIVERY PERFORMANCE
Section 1: Highlights and Achievements
Joint operations with other law enforcement agencies(SAPS/HAWKS) and the operation has led to the arrest and closure of one big syndicate group which was operating in the Midrand area
6 high risk areas on theft and vandalism of electrical network infrastructure has been neutralised by intelligence teams and other interventions implemented.
The number of HV (NPR) outages were below the target threshold of 36, with an actual of 21 outages.
The Workplace Skills Plan was approved by the EWSETA on 18 August 2015
76% of learners registered for Electrician’s trade tests have been declared competent
Graduates, Technicians and Engineers-in-training who have been trained through City Power Learning programs were interviewed and are ready to be appointed through the normal recruitment process.
Load Limiting: Implementation of Load Limiting has improved the service delivery and reduced impact of Load Shedding during the winter period and was positively accepted.
Procurement spend on companies that are 50% black owned exceeded. 33.47% against a target of 12%.
Procurement spend on companies that are 30% black woman owned has been achieved. 11.8% against a target of 10%.
Payment of creditors within 15 days
The successful implementation of Pay Progression in October 2015, for the second year in a row without major hassles. A total of 1276 eligible employees benefitted from this exercise.
A total of 59 positions have been advertised from July 2015 to December 2015 (interviews are on-going).
The finalisation of the City Power Strategic Workforce Plan for 2015 – 2019.
A successful two-day LLF workshop was held on 18/19 November 2015 to review the Rules of Engagement which governs the relationship between Management and Organised Labour.
The approval of the TASK Grades report by the HR Committee on 3 November 2015.
First organization in South Africa to receive SABS ISO 31000:2009 compliance.
Section 2: Service Delivery Challenges
The previous method of measuring the meter disconnections and reconnection performance was imprecise. A new system, using the Forcelink suite, is in the process of being implemented which will provide accurate performance data in future.
Section 3: “Game Changers” Programmes
Progress on stakeholder engagement plan The 2015/16 tariff books were designed, printed and distributed to City Power depots, COJ regional centres and published on City Power internet. 62 planned outages affecting 128 761 customers were communicated through electronic screens. Participated at the hostels forum meeting in region F, the purpose of this meeting was to debrief on education the residence of the services offered by the MoE’s, as championed by Department of Human Settlement. Customer educational campaigns focussing on topic such as load shedding, electricity safety, saving energy, illegal connections and vandalism, how to use prepaid meters, pre-paid tariffs, ESP and other energy matters were held in the following areas:
Freedom Park,
Narens Farm
Lehae
Leratong
Alexandra
Lufhereng
Tshepisong
City Power: Quarterly Report 2015/16 Final Page 30
Devland A community education workshop were held in Jeppe and George Goch hostels educating the community on safety of electricity and how to stop illegal connections. Key customer Golf day was also held to improve customer relations.
Section 4: Capital Projects & Expenditure
The approved City Power Capital budget for the 2015/16 financial year is R 1.7 billion. This approved budget is inclusive of loans, own funding, DSM funding, and grants and public contributions The expenditure for year to date is R670m, as outlined on the table below.
City Power: Quarterly Report 2015/16 Final Page 31
ACTUAL VS PROJECTIONS:
All projects have forecasts for expenditure and progress. These will be used to report and track progress in
order to ensure successful execution of the capital programme. The graph below depicts the recovery path in
expenditure. The figures shown are based on individual projects which are then rolled up to categories. The
graph below indicates actual spend against the base projections, including the variance between Actual and
Budget:
City Power: Quarterly Report 2015/16 Final Page 32
City Power: Quarterly Report 2015/16 Final Page 33
CAPITAL EXPENDITURE DETAILS
CONTROLLABLE CAPEX The expenditure for the financial year on Controllable capital projects, which are projects funded from COJ
loans, DSM levy, Grant funding, Own cash and Adopt a light funding amounted to R635 m year to date.
Table on Controllable Capex
NON CONTROLLABLE CAPEX The non-controllable capital projects are projects which are funded by public contributions. The expenditure for the mid-year amounted to R35m year to date, against a mid-year budget of R30m.
City Power: Quarterly Report 2015/16 Final Page 34
Table on Non – Controllable Capex
Section 5: Performance of Revenue Recovery Project – Milestone 2
All initiatives, projects and programmes that directly relate to completing AMR conversions, including replacement of obsolete AMR meters, ensuring that all AMR installations are functional, ensuring all meter readings are delivered by means of AMR technology to SAP ISU and ensuring that mission critical Operating Unit Enablers are build, operationalise and transferred to normal business. Other in-scope elements are:
Resolving AG Audit findings;
Post-paid AMR conversion to Prepaid AMR (same Smart Meter)
AMR Conversion query resolution;
SAP Fixit;
Ghost finding; and
Protective structures as part of the conversion process.
5.1 Out of Scope
The following is out of scope of the RRP and Milestone 2:
New connections and upgrades;
Disconnections and reconnections;
Prepaid non-technical losses recovery;
Pre-paid customer data improvement;
NRS Reporting;
Invoice reconciliation and tracking; and
Invoice calculations.
City Power: Quarterly Report 2015/16 Final Page 35
5.2 Milestone 2 Business Case
Strategy Business Case
1. Resolve all AG Issues.
2. Fix all meter reading upload fails.
3. Complete AMR conversions.
By executing this strategy the following will be prevented:
Fruitless and wasteful expenditure.
Audit Findings.
Non-compliance with regulations.
Increasing customer queries.
Shareholder dissatisfaction.
Survival of City Power
4. Set-up interim capabilities to sustain
AMI performance.
By executing this strategy the following benefits will be derived:
Issues fixed will be sustained.
Meter performance monitoring will pro-actively take place.
Work dispatch will be coordinated, optimised and
measured.
Escalated customer queries resolution time will decrease.
Customer satisfaction will increase.
Revenue recovery will continue.
Improved quality control on new LPU installations.
5. Develop and establish the future
state Smart Meter Operating Model.
By executing this strategy the following benefits will be derived:
Business goals will be achieved.
Maximizing the return on the value proposition offered by
the introduction of Smart Metering Technology.
Benefits realisation as per the investment business case.
6. Improve Meter-to-Cash business
processes
By executing this strategy the following benefits will be derived:
Improved end-to-end device management process.
Improve effectiveness in organisation to execute on end-to-
end processes.
Improved Master Data.
Improves segregation of duties.
Updated systems and technology.
Business Case
5.3 Stakeholder Expectations: Milestone 2
The following Stakeholder requirements are to be met:
Put ‘business as usual functions’ currently residing in RPP back in line as soon as possible.
Diligently apply the lessons learned during Milestone 1.
Use accredited OEM service providers for installations and maintenance.
Take into account City of Johannesburg’s political intent.
“Cannot fail” on Milestone 2.
Address competency gaps identified during Milestone 1.
City Power: Quarterly Report 2015/16 Final Page 36
5.4 Milestone 2 Progress as at 30 November 2015.
AG Issues - Unread
Meters
30 September
2015
31 December
2015%
4 to 6 months 11 021 14 440 31%
7 to 9 months 5 176 6 890 33%
10 to 12 months 3 361 3 257 -3%
>3<12 months 19 558 24 587 26%
13 to 18 months 3 502 3 633 4%
19 to 24 months 1 788 486 -73%
25 to 36 months 1 530 491 -68%
37 to 48 months 266 117 -56%
49 to 60 months 169 55 -67%
61 to 72 months 480 141 -71%
73 months and longer 476 131 -72%
AG >12 Months 8 211 5 054 -38%
Total 27 769 29 641 7%
City Power: Quarterly Report 2015/16 Final Page 37
Smart meter conversion and maintenance of smart meters has stopped due to expiry of the contract and
insufficient capital and operational budgets.
Losses
The total losses amounted to 27.27% due to the following, the total purchases are below budget by 2% due to reduction in demand and though the losses are budgeted to be at 13.5% but City Power has reviewed this target to 22% as part of mid-year budget review due to the budget constraints. The reporting of the losses in the short term also need to be reviewed to 12 months moving average due to the industry standard, if the 12 months moving average is implemented in the current performance quarter 2 losses would amount to 22,75%. Though the losses remain stable but the 22% total losses remain high and there is a high need to fast track the revenue recovery project so as to reduce the losses.
By applying a 12 month moving average the effect of reversals and out-of-synch issues are smoothed out.
Smart Meter - Data
Mismatches
Percentage
Change
Total FDM/x 6%
Total Meters Not on MDC/x
113%
Total Meters not on MDM 13%
Total Meters not on SAP ISU
-12%
11386 10119
16194 18474
Dec-15 Oct-15
112020 105825
6032 2828
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
12 months Moving Average Losses
City Power: Quarterly Report 2015/16 Final Page 38
Section 6: Performance against Institutional IDP
Within the strategy map, value propositions are linked to key balanced scorecard perspectives. This section outlines these value propositions, key performance areas, indicators and actual performance for the financial year 2015/16 from financial, customer, internal and learning and growth perspectives.
The report analyses the performance of the entity in terms of the SDBIP scorecard, measuring performance in terms of both the entity’s impact and its financial and resource management. Performance that met or exceeded target is highlighted green and below target performance is highlighted in red.
High voltage (HV) outages refer to the number of outages experience on the high voltage network, which is at voltages about 33kV. Outages on these networks generally affect large areas. Medium voltage (MV) outages are outages experienced on the medium voltage network, which is at voltages between 1kV and 33kV. Outages on this network are more localised, and therefore generally affect smaller areas. And as a result are less severe than HV outages. The number of HV outages and MV outages exceeded the target. There has been a significant increase in HV and MV (all) outages as a result of escalating theft and vandalism of copper components, particularly cables that have a negative effect on this KPI. Damage by third parties has also contributed to the increased number. Improving security measures are being rolled out to manage this situation.
Restoration times form part of the NRS 047 standard. The restoration times refer to the amount of time it takes for customers to have their power restored after an outage occurs. Although there has been an improvement in
Target Actual Target Actual Target Actual
Customer Satisfaction
SurveyIndex 67 47.70 67.00 47.70 67.00 47.70
Achievement of SLA % 80 53.96 80 53.96 80 53.96
Street Lights TAT Days 2.00 8.60 2.00 7.70 2.00 12.00
Outage reduction MV
(All)Number 612.00 738.00 612.00 869.00 1 224.00 1 616.00
Outage reduction HV
(All)Number 32.00 34.00 32.00 49.00 64.00 85.00
HV Outages: NPR Number 18 8.00 18 11.00 36.00 21.00
Restoration time: 1.5
hours% 30.00 20.74 30.00 13.62 30.00 16.53
Restoration time: 3.5
hours% 60.00 54.83 60.00 62.67 60.00 59.31
Restoration time: 7
hours% 90.00 81.26 90.00 85.74 90.00 86.88
Restoration time: 24
hours% 98.00 97.32 98.00 97.15 98.00 97.24
NRS 047 Compliance % 93.00 64.27 93.00 62.04 93.00 59.60
NRS 048 Compliance % 95.00 98.51 95.00 99.07 95.00 98.89
PIPImpact on
CommunityKPI Unit
CP IDP
Programme
Core Mandate:
Sustainable
Human
Settlement
Service Delivery
Improvement
Improved
Service Delivery
Quarter 1 Quarter 2 YTD
Active engaged
citizenry:
Communication
& Stakeholder
Management
Communication
& Stakeholder
Management
Improve
customer and
stakeholder
experience
City Power: Quarterly Report 2015/16 Final Page 39
performance when compared to mid-year in 2014/15, the targets were not met during the mid-year. City Power is currently introducing newer and enhanced outage dispatching protocol to replace the existing obsolete system. The obsolete outage management system has now been discontinued and a new modern system, including MDT communication, will be introduced in the 3rd quarter. A gradual improvement in outage times is expected as a result. Furthermore, the training of resources to undertake network switching is at an advanced stage and the authorisation of additional Operators will be completed in the next few months.
Public lighting turnaround time refers to the time it takes for a street light to be repaired after it has been reported to City Power by the public. The turnaround time target was originally 10 days, but was subsequently reduced to 2 days. The Street Lighting Policy is currently under review and improvement initiatives will be identified and implemented. There is also a Street lighting Maintenance Strategy in the process of being formulated based on best practice. This will be introduced in the early part of 2016. NRS047 is a regulatory standard used for the monitoring of quality of service in the South African electricity industry. Meeting and reporting on these targets is imperative for the well-being of City Power’s license. The following KPI’s are managed by RSSC as an agent for City Power and have not been met for mid-year performance:
Call Centre related KPI’s,
Query resolution related KPI’s. Poor meter reading performance also contribute to low performance on NRS 047. City Power is working closely with RSSC to attain performance improvement on these KPIS. NRS048 is a regulatory standard used for the monitoring of quality of supply in the South African electricity industry. This standard acknowledges that quality of supply requirements differ between customer categories and per network type. City Power has attained these KPIs.
Electrification target for the mid-year has been exceeded as electrification was done as houses were completed.
Public Lighting target for the mid-year was not achieved because bulk of the lighting installation are done hand in hand with the housing development and electrification projects. Any delay there will impact on the roll-out of public lighting. Ripple Control Relays installation contractors have been appointed and installation exceeded the target. Solar Water Heaters’ budget for the mid-year was 1 000, with a total of 20 000 planned for the year. The project is still in planning and will commence once all the internal processes have been completed and installation contractor appointed. The total of 610 that was installed relates to the contracts from the previous financial year, and was installed early July. Energy mix’ target was not met due to less solar water heaters against plan. This also affect the reduction in greenhouse emissions.
Target Actual Target Actual Target Actual
Electrification Number 750 347 250 815 1 000 1 162
Provision of public
LightsNumber 450 213 450 451 900 664
Reduction in GHG t CO2e/MWh - 0.00 380 232 380 232
Improve Energy Mix
(MW)MWh 2 704 0 2 704 0.00 2 704 0
Ripple relay roll out Number 2 400 0.00 2 400 5 912 4 800 5 912
Solar Water Heaters Number - 610 1 000 - 1 000 610
Expansion and
Strengthening
of Network
More people
with access to
electricity,
Economic
growth
Flagship:
Green/Blue
Economy
Security of
supply/Demand
side
management
Improved
security of
supply
Quarter 1 Quarter 2 YTD KPI Unit
Impact on
CommunityPIP
CP IDP
Programme
City Power: Quarterly Report 2015/16 Final Page 40
Non-Technical Losses Refer to page 49 above on losses. Meter Reading performance
- Manual Meter Reading – Performance has been around 59%. - AMR Performance – 19% drop of AMR performance was due to audit files for manually read that could
not be uploaded as the MRQC system was not available. Smart Meter Roll-Out The number for meter roll-out is based on meters successfully uploaded on SAP for billing in the quarter. 53% of the meters updated during the mid-year on SAP are collecting readings as intended. Payment Level Contract at RSSC for delivery of notices expired in August 2015, as a result there were no pre-termination notices issued affecting cut-offs and collection levels.
Job opportunities created as per EPWP (Expanded Public Works Program) have not been exceeded. The company has a plan in place to ensure the attainment of an unqualified audit report. The creation of jobs in this category is directly linked to the project that are being rolled out, and that impacts on the rate at which jobs are being created. Targets for J@W R&M spent for the mid-year was 10%, and the Capital Spent of J@W quarterly target is 5 %, the reason for slow performance on this is that the YTD Expenditure on the projects is very low, and that impacts on % spent on these initiatives. The company has not attained the targets on all of the KPIs that are information technology related, (except DIFR), Contact with electrical network often results in serious incidents, resulting in permanent and or partial and temporary disability, sometimes into fatalities. For the period under review there has been no employee fatality and 11 public fatalities recorded (Controllable - 0 and Non-Controllable 11). The Public Fatalities: Controllable KPI refers to the number of public fatalities due to electricity related incidents caused by City Power. In an effort to maintain low controllable public fatalities, City Power conducts staff and contractor training and awareness campaigns. On the 29th April 2014 the business celebrated the Worker`s Day event as an integral part of the awareness campaign, supported by EXCO, Department of Labour and all relevant departments. Public
Target Actual Target Actual Target Actual
Flagship:
Smart CitySmart Grid
Improved
customer and
stakeholder
experience
Meter Roll Out Number 10 535 17 183 9 900 9 110 20 435 26 293
Payment Levels
(Current consumption)% 98.00 96.09 98.00 93.83 98.00 95.01
Meter Reading
performance% 98 66.08 98 58.90 98 58.90
Losses (Technical/ &
Non-Technical)% 13.50 27.58 14.26 26.48 14.26 27.27
KPI UnitPIPCP IDP
Programme
Impact on
Community
YTD Quarter 1 Quarter 2
Core Mandate:
Financial
resikience and
sustainability
Revenue
Revenue
Recovery
Program
Improved
customer and
stakeholder
experience
Target Actual Target Actual Target Actual
R&M spent on J@W % 10 0.00 10 0.00 10 0.00
Capital spent on J@W % 5 0.00 5 6.76 5 6.76
EPWP Number 1 250 771 1 250 204 2 500 771
50% black owned
companies% 12 68.54 12 44.13 12 38.19
30% black woman
owned company% 10 26.89 10 18.99 10 14.98
DIFR Ratio 1 0.63 1 0.35 1 0.35
ISO accreditation Audit report3 = Unqualif ied
Audit reportNot Started
3 =
Unqualif ied
Audit report
Not Started
3 =
Unqualif ied
Audit report
Not Started
Attainment of an Clean
audit reportAudit report 3 Pending 3
3 =
Unqualif ied
audit w ith
matters of
emphasis
3
3 =
Unqualif ied
audit w ith
matters of
emphasis
PIPCP IDP
Programme
Impact on
CommunityKPI Unit
YTD Quarter 1 Quarter 2
Resource
sustainability,
safer city,
governance
Job creation,
Poverty
reduction
Jozi@work
Socioeconomic
Development
Jozi@work
Business
efficiency and
effectiveness
City Power: Quarterly Report 2015/16 Final Page 41
Fatalities: Non-controllable KPI refers to the number of public fatalities that are mainly due to electrocution as a result of various factors such as customer negligence, tampering with electricity installations, attempted theft and vandalism of infrastructure, etc. In an endeavour to educate our customers and communities, City Power is conducting awareness campaigns to ensure greater within communities of the danger of electricity. Joint operations on illegal connections conducted by City Power, Transnet, JMPD forms an integral part of an effective safety campaigns. KPI’s for monitoring purposes
BOARD BALANCED SCORECARD WITH KEY PERFORMANCE AREAS AND INDICATORS
Target Actual Target Actual Target Actual
Core Mandate:
Sustainable
Human
Settlement
Service Delivery
Improvement
Improved
Service Delivery
Number of households
with access to basic
electricity
Number 415 518 469 073 418 326 469 073 418 326 469 073
Flagship:
Corridors of
Freedom
Refurbishment
of ageing
infrastructure
Improved
network
performance and
quality of supply
Average age of
infrastructure (HV)Years 39 37 39 37 39 37
Number of prepaid
customers Number 252 893 255 081 255 701 258 620 255 701 258 620
% of ESP customers
with FBE provided % 97.00 100.00 97.00 100.00 97.00 100.00
YTD
Core Mandate:
Financial
resikience and
sustainability
Revenue
Revenue
Recovery
Program
Improved
customer and
stakeholder
experience
Quarter 1 Quarter 2PIP
CP IDP
Programme
Impact on
CommunityKPI Unit
City Power: Quarterly Report 2015/16 Final Page 42
Financial Perspective
Customer Perspective
Internal Perspective
Target Actual Target Actual Target Actual
Revenue step
change
programme
Reduce Losses Total Losses %Reduce Total
Losses% 13.50 27.58 13.50 26.48 13.50 27.27
Optimise Capex
Spend
Total Capex
Spend as % of
Targeted Capex
Spend
Total Capex Spend
as % of Targeted
Capex Spend
% 100 154.64 100.00 122.89 100 77.32
PIP Align-ment CP IDP
Programme
Value Propositions Key Performance
Area
Unit
Financial
Resilience and
Sustainability
Key Performance
Indicator
Quarter 1 Quarter 2 Year to Date
Target Actual Target Actual Target Actual
Street Lights TAT Days2 9 2 8 2 12
Outage reduction
MV (All)
Number612 738 612 869 1224 1 616
Outage reduction
HV (All)
Number32 34 32 49 64 85
Restoration time:
1.5 hours
%30 20.74 17.5 13.62 36 16.53
Restoration time:
3.5 hours
%60 54.83 60.00 62.67 60.00 59.31
Restoration time: 7
hours
%90 81.26 90.00 81.26 90.00 81.26
Restoration time: 24
hours
%98 97.32 98.00 97.32 98.00 97.32
Promote Energy
Efficiency
Reduction in
Green House
Gases
GHG % 0 0.0 380 231.6 380 231.6
Green
Economy
Demand Side
Management
Promote Energy
Efficiency
Improve Energy
Mix (MW)
Improve Energy Mix
(MW)MW 0 206 256.3 338 125 0.0 338 125 206 256.3
Active Engaged
Citizenry
Improve
Customer
Centricity and
people
development
Improved Customer
/ Stakeholder
Experience
Improve
Customer /
Stakeholder
Satisfaction
Satisfaction Index
%% 75 60.52 75 59.35 75 59.94
NRS 047
Compliance% 93.00 64.27 93.00 62.04 93.00 59.60
NRS 048
Compliance% 95.00 98.51 95.00 99.07 95.00 98.89
SMME &
Entrepreneur
Development &
Support
Improve
Customer
Centricity and
people
development
Socioeconomic
Development
Socioeconomic
Development
Socioeconomic
Development Index# 56 69.47 56 27.54 56 37.75
Maintain High
Quality of Service
Levels
Quality Supply and
Availability
Sustainable
Human
Settlements
Improve Network
performance and
quality of supply
Year to DateKey Performance
Indicator
Value Propositions Key Performance
Area
Quarter 1 Quarter 2UnitPIP Align-ment CP IDP
Programme
Target Actual Target Actual Target Actual
Resource
Sustainability
Continuous
Improvement of
the business
Manage Core Value
Chains
Monitor and
Improve
Compliance and
Assurance
Compliance and
Assurance Index Status 3.0 3.0 3.0 2.0 3.0 5.0
Key Performance
Area
PIP Align-ment CP IDP
Programme
Unit Year to DateQuarter 1 Quarter 2Key Performance
Indicator
Value Propositions
City Power: Quarterly Report 2015/16 Final Page 43
Learning & Growth Perspective
Section 7: Supply Chain Management and Black Economic Empowerment
On the 1st October 2005, City Power Johannesburg adopted Supply Chain Management systems in compliance with the provisions of the MFMA and the National Treasury: Municipal Supply Chain Management Regulations. The entity fully complies with the provisions of SCM Policy, MFMA, B-BBEE, CIDB, PPPFA and all other related regulations. The SCM Unit continuously monitors the implementation of SCM policies and provides quarterly reports to the relevant governing structures. The Supply Chain Policy is amended annually and all updated National Treasury’s Practice Notes are incorporated into the updated SCM Policy to align the entity with the best practices of the industry. During the 1st quarter the SCM revised Policy was approved by the Board. The entity has implemented the three–stage bidding processes with separate Bid specification, Bid evaluation and Bid Adjudication committees. During the financial year 2014/15 the entity made 102 awards to the value of approximately R4,6 billion in value. Out of the 102 awards, 55 of them went to Black Owned Companies and 32 went to Black Women Owned companies. All awards in excess of R40 million, are referred to an independent external review panel at the discretion of the Accounting Officer, to review the validity of the entire Bid process for assurance. All other awards made through Regulation 36 of the MFMA, are continuously reported to the relevant governing structures for notification. No unsolicited bids were approved by the entity during this period. Accreditation of Black Economic Empowerment in respect to both the supplier and contractor
Accreditation of suppliers and contractors is completed on an on-going basis by the BEE unit and reviewed
regularly to ensure validity and correctness of information on the database. Suppliers and contractors are
required to submit BEE certificates which will show their contribution levels, thus enabling reporting on BEE
spend.
BEE spend in respect of suppliers and contractors
The mid-year spend on 50% Black Owned companies amounted to R1 504m which is 38.19% of the procurement spend and is above the set target of 12%. Procurement spend on 30% Black Women Owned companies amounted to R610m which equates to 14.98% of the total procurement spend and is above the set target of 10%.
Below is the table that indicates the expenditure and BEE representations for the entity during the mid-year of the financial year 2015/16.
Target Actual Target Actual Target Actual
Resource
Sustainability0
High Performing
Teams
Improve Team
Performance
High Performance
Team Index% 70 72.5 70 52.7 70 55.5
CP IDP
Programme
Key Performance
Area
PIP Align-ment Unit Year to DateQuarter 1 Quarter 2Key Performance
Indicator
Value Propositions
City Power: Quarterly Report 2015/16 Final Page 44
City Power was compliant with all relevant legislation pertaining to procurement and is aligned with City of Johannesburg Supply Chain Management policy.
Contract Management during the mid-year Contracts are monitored on a regular basis by both the end user and supply chain in order to ensure that there is full compliance with the scope of work and that spend is within the approved budget. This ensures that supplier performance is closely monitored in order to identify areas of poor performance or non-performance so that corrective measures can be put in place and implemented as early as possible.
Enforced penalties on contractors
None for the mid-year. Reports on unsatisfactory work
None reported for the mid-year.
Target Quarter 1 Quarter 2 YTD
Procurement spend from suppliers
that are 50% black ownedR000's 10% 995 217 509 164 1 504 382
% Spend % 68.5 44.1 38.19
Procurement spend from suppliers
that are 30% black women ownedR000's 8% 390 433 219 144 609 577
% Spend % 26.9 19.0 14.98
City Power: Quarterly Report 2015/16 Final Page 45
Bid Status Report at Mid-year
No. Bid description Tender Bulletin Number
Date of Advertisemen
t
Closing date
Status Budget CAPEX/
R’000 OPEX
1
(Re-advert) Maintenance of fire-fighting equipment
2099GS 17/07/2015 21/08/2015 Awarded
R 1 000 OPEX
2
Repairs and maintenance of Ripple Control Transmitter Equipment
2135S 03/07/2015 17/07/2015 Awarded
R 3 000 OPEX
3
Supply and delivery of cleaning detergents
2136G 07/08/2015 21/08/2015 Evaluation Stage
Stock item
STORES
4 Provision of Physical Security to City Power
2144S 17/07/2015 21/08/2015 Evaluation Stage
R 148 000
R50 m (CAPEX) R98m (OPEX)
5
Provision of crime Intelligence services to City Power
2145S 17/07/2015 21/08/2015 Evaluation Stage
R 150 000
OPEX
6
Provision of Physical Security to City Power (National Key Point)
2146S 17/07/2015 21/08/2015 Evaluation stage
R 16 000
OPEX
7 Repairs and Calibration of Equipment
2147S 10/07/2015 14/08/2015 Evaluation Stage
R 18 000
OPEX
8 (Re-advert) Internet and VPNS Solution
2149S 14/08/2015 04/09/2015 Awarded
R 7 200 OPEX
9
RFP on Generation Solution for City Power (Gas Turbines)
2150S 30/10/2015 29/01/2015 Still advertised
RFP CAPEX / OPEX
10 Provision of gym Freelancers
2151S 24/07/2015 07/08/2015 Awarded
R 792 OPEX
11 Supply and delivery of LV and MV Fuses
2152G 21/08/2015 22/09/2015 Evaluation Stage
Stock item
STORES
City Power: Quarterly Report 2015/16 Final Page 46
No. Bid description Tender Bulletin Number
Date of Advertisemen
t
Closing date
Status Budget CAPEX/
R’000 OPEX
12 Supply and delivery of discharge Lamps
2154G 21/08/2015 23/09/2015 Evaluation Stage
Stock item
STORES
13 Public Lighting Steel Masts
2156G 13/11/2015 14/12/2015 Bid Closed
Stock item
STORES
14
Repairs, Maintenance, Transportation and Installation of Transformers
2157S 14/08/2015 25/09/2015 Evaluation Stage
R 300 000
R150 m (CAPEX) R150m (OPEX
15 Provision of Last Mile Communication
2158S 18/09/2015 02/11/2015 Bid Closed
RFP OPEX
16
Provision of Advanced Data Management Systems
2159S 18/09/2015 30/10/2015 Bid Closed
RFP OPEX
17 Cable Fault Location
2161S 23/10/2015 23/11/2015 Bid Closed
R 30 000
18 Provision of printing solution to City Power
2162S 30/10/2015 04/12/2015 Bid Closed
R 18 000
OPEX
19
Supply, Installation and Commissioning of Substation Battery Charger
2163GS 28/09/2015 09/10/2015 BEC Stage
R 7 000 CAPEX
20 Final and Check Meter Reading
2164S 02/11/2015 02/12/2015 BEC Stage
R 42 116
OPEX
21 Painting of Bolck E&F
2166S 13/11/2015 27/11/2015 Bid Closed
R 1 200 OPEX
22 Transformer and Switchgear Testing
2168S 23/10/2015 23/11/2015 BEC Stage
R 54 000
OPEX
23 Contact Centre 2173S 13/11/2015 27/11/2015 Bid Closed
R 9 000 OPEX
24 Secondary Plant Testing
2175S 16/10/2015 20/11/2015 BEC Stage
R 60 000
OPEX
25 Supply and delivery of PPE
2176G 07/12/2015 29/01/2015 Bid still advertised
Stock item
STORES
26 Roosevelt Park Substation
2179GS 30/11/2015 22/01/2016 Bid still advertised
R 65 000
CAPEX
27 Waterval SWS Feeder board Replacement
2180GS 30/11/2015 22/01/2016 Bid still advertised
R 25 000
CAPEX
City Power: Quarterly Report 2015/16 Final Page 47
No. Bid description Tender Bulletin Number
Date of Advertisemen
t
Closing date
Status Budget CAPEX/
R’000 OPEX
28 Hopefield Substation
2181GS 30/11/2015 22/01/2016 Bid still advertised
R 35 000
CAPEX
29 Upgrade of Hursthill Substation
2182GS 30/11/2015 22/01/2016 Bid still advertised
R 40 000
CAPEX
Bids/Contracts approved during the mid-year
Tender Number
Contractor Name Description Period Budget Vote R’000
Award Value R’000
2121G Mndhabazi Trading Cc Miye Pattie Trading Enterprise
Supply and Delivery of Canteen Groceries and Perishables
2 Years R14 000 R7 669 R6 331 R14 000
2108G Nothani Engineering Supply and Delivery of Concrete Plinths
3 Years R10 000 R10 000
2111G Imbawula Supply and Delivery of Concrete Poles for LV & MV Overhead Distribution Systems
3 Years R20 000 R20 000
2112G Intelligence Electric Solution
24/7 Specialised Office Chairs
Once-off purchase
R1 400 R1 350
2116G Dodwana Construction cc Supply and Delivery of 25kV Pressure Test Sets
Once-off purchase
R2 000 R1 926
2100GS Shorts Lifts (Pty) Ltd Platform Lifts for Disabled people
Once-off service
R3 000 R1 550
2135S Farad (Pty) Ltd Repair and Maintenance of Ripple Control Transmitter Equipment
3 Years
R3 000
R3 000
2113GS Phola Airconditioning Air – Conditioning Maintenance
3 Years R2 985 R2 985
2088S Wolters Kluwer Mindex Agilebridge Landis & Gyr (SUPTALK) Landis & Gyr (SUPRIMA)
Annual Software Licences for City Power
3 Years R8 016 R 330 R 392 R3 255 R1 350 R2 689 R8 016
2151S Inside Active Gym Freelancers (Locums) Services
12 Months R300 R300
2149S Vodacom Internet and VPNS 3 Years R7 200 R3 676
2099GS Phola Airconditioning Fire Fighting Equipment Maintenance
3 Years R1 000 R1 000
2126S EOH Symantec Netbackup Support
12 Months R2 100 R2 058
2093G CBI: African Cables M-Tec
Supply and Delivery of Various
3 Years R1 200 000 R736 670 R349 330
City Power: Quarterly Report 2015/16 Final Page 48
Tender Number
Contractor Name Description Period Budget Vote R’000
Award Value R’000
Aberdare Electrical Cables to City Power
R114 000 R1 200 000
2101S Ampcor Khanyisa Jolobe Trading Maziya general services Powerminster Pty Bash Electrical Tshepang electrical F + J electrical Devinity trading Nothani engineering Canaan electrical contractors Karliff Designs CC W N S Projects Mandewo Inv Projects TNJ Project Solutions K Mphaks Electrical Construction Twoline Trading 135 Pty t/a Marang corporation BBP Project cc Forsai electrical Pty Lefhumo Lwa Barema Trading Enterprise Leoka investments CC Lengwati electrical Umbutho civil + electrical CC Zizwe general services Schick services CC Lephata La Basha Trading + Projects QT Electrical Zero defact trading Infinite blue trading 29 CC Enliven electrical solutions Machite engineering George Stott + company Pty Musi electrical engineering Soccer scene t/a scene electrical Amaya group holdings Cambridge energy efficiency solutions Kent electrical services LNL electrical Pty Isidingo Electrical Nkateko business enterprise Imbawula electrical services + suppliers group Colsta projets Felo-Finance + projects Wandies technical services Mveledziso Engineering Tamibuzz
Labour Contracts for the Installation and Maintenance of Medium and Low Voltage infrastructure including Public Lighting and Major Capex Projects
3 Years R1 960 000 R1 960 000
City Power: Quarterly Report 2015/16 Final Page 49
Tender Number
Contractor Name Description Period Budget Vote R’000
Award Value R’000
Sinotho Electrical + Civil engineering services 115 electrical solutions PSK construction GMHM construction + projects Sunrise electrical wholesalers Deep Blue Investments Philcorn Business Enterprises Sopityo Engineering & Civils Ndidzulaphi Projects Lermat construction + projects Setheo investments
TOTAL R3 235 001 R3 229 861
City Power: Quarterly Report 2015/16 Final Page 50
Deviation/exception procurement for the period
Item Procurement Type
Date Description Amount R’000
1 Emergency Procurement
21/08/2015 Emergency upgrade of Oil Circuit Breakers at Kelvin 88kV switchyard
R8 500
TOTAL R8 500
Section 8: Statement on Amounts Owed By and To (-) Government Departments and Public Entities
Account Number
Name Balance
220092430 7TH DIV HEADQUARTERS PWD 110 824.87
220093794 ALEXANDRIA POLICE STATION 3 013.98
220048689 ASTERI PRIMARY SCHOOL 196 988.09
220065035 ATHLONE BOYS HIGH SCHOOL 36 681.15
220028474 BARAGWANATH HOSPITAL 11 479 298.36
400735708 BATHO PELE PROJECTS CC -179.00
220088177 BEREA PRIMARY SCHOOL 22 859.11
220002412 BRAMLEY POLICE STATION
-
201001221 CARTER HP SCHOOL 93 483.61
501603722 CAVENDISH STR PRIMARY SCHOOL 20 424.11
403313542 CENTRAL GOVERNMENT 39 761.58
400713849 CENTRAL GOVERNMENT 49 871.59
205570695 CENTRAL GOVERNMENT 14 680.07
220056947 CENTRAL GOVERNMENT
179.00
220062250 CLEVELAND POLICE STATION 100 022.97
220065596 CYRILDENE PRIMARY SCHOOL 6 301.00
220055541 DAXINA PRIMARY 340 335.24
501428284 DELRADO PRIMARY SCHOOL 3 373.46
221211024 DEPT OF ROADS AND TRANSPORT 1 126 965.05
221211031 DEPT OF ROADS AND TRANSPORT 2 743 337.27
221283101 DEPT OF ROADS AND TRANSPORT 177 002.20
221211017 DEPT OF ROADS AND TRANSPORT 972 421.78
221207123 DEPT OF ROADS AND TRANSPORT 662 767.76
220027079 DEPT OF COMM DEV. 6109/2461/1
0.39
500107866 DEPT OF COMMUNITY DEV 183 822.06
205957376 DEPT OF COMMUNITY DEV
0.89
220008118 DEPT OF JUSTICE 1 478.34
205103222 DEPT OF PUBLIC WORKS -6 106.00
900010629 DEPT OPENBARE WERKE 30 112.87
206126649 DEPT PUB WORKS & LAND AFFAIRS -25 161.00
City Power: Quarterly Report 2015/16 Final Page 51
Account Number
Name Balance
206218656 DEPT PUBLIC WORKS -25 639.00
500143335 DEPT PUBLIC WORKS
59.41
206116288 DEPT PUBLIC WORKS AND LAND AFF -29 369.00
403305774 DEPT PUBLIC WORKS&LAND AFFAIRS 2 572.30
403305580 DEPT PUBLIC WORKS&LAND AFFAIRS -2.57
207069464 DEPT PUBLIC WORKS&LAND AFFAIRS -93.75
205991673 DEPT PUBLIC WORKS&LAND AFFAIRS 37 146.28
205991426 DEPT PUBLIC WORKS&LAND AFFAIRS 60 682.84
403305580 DEPT PUBLIC WORKS&LAND AFFAIRS -2.57
205991465 DEPT PUBLIC WORKS&LAND AFFAIRS 96 374.04
207080718 DEPT PUBLIC WORKS&LAND AFFAIRS 2 200.47
205991426 DEPT PUBLIC WORKS&LAND AFFAIRS 60 682.84
205991384 DEPT PUBLIC WORKS&LAND AFFAIRS 67 520.50
400902370 DEPT VAN PLAASLIKE BESTUUR 152 380.93
221167015 DEPT. OF PUBLIC TRANSPORT/ ROADS & WORKS
170 203.20
220003751 DEPT. PUBLIC WORKS & LAND AFFAIRS
25.30
220903752 DEPT. PUBLIC WORKS & LAND AFFAIRS
13.62
220061009 DEPT.HOUSING AND LOCAL GOVT. 1 927 310.23
220008816 DIE HOOFDIREKTEUR/ Stella 49 855.15
220022970 DIE STREEKSVERTEENWOORDIGER 58 906.00
220009104 DIE STREEKSVERTEENWOORDIGER 72 893.38
220028410 DIEPKLOOF MILITARY CAMP
0.01
220028442 DIEPKLOOF PRISON P W D 198 362.00
220030804 DISCOVERERS CHC-A 368 380.60
206153177 EASTGATE PRIMARY SCHOOL 8 346.81
221038725 EDENVALE HOSPITAL 2 797 323.77
220010501 EDUCATION MODEL C SCHOOLS 87369371
1 117 010.76
201001283 EKUKHANYISWENI LP SCHOOL -92 018.05
501518851 ELDRIDGE PRIMARY 30 116.96
206564794 FAIRSAND PRIMARY SCHOOL 28 575.40
220024991 FOREST HIGH SCHOOL 37 920.54
220032569 GAUTENG LEGISLATURE -20 102.00
501683132 GAUTENG PROV HOUSING ADV BOARD 69 809.42
220032583 GAUTENG PROV. LEGISLATOR
255.48
501236783 GAUTENG PROVINCE-HOUSING DEV BRD 267 381.70
505717061 GAUTENG PROVINCIAL GOVERMENT 260 526.96
221276007 GAUTENG PROVINCIAL GOVERMENT 234 286.67
221192163 GAUTENG PROVINCIAL GOVERNMENT 168 369.85
City Power: Quarterly Report 2015/16 Final Page 52
Account Number
Name Balance
221283117 GAUTENG PROVINCIAL GOVERNMENT 12 164.47
502046030 GAUTENG PROVINCIAL HOUSING ADV BOARD
7.99
500306004 GAUTENG PROVINCIAL HOUSING ADV BOARD
405.48
220032576 GAUTENG PROVINCIAL LEGISLATURE 766 416.24
221087497 Gauteng Shared Service Centre 1 163 396.00
220078676 GEN.CHRISTIAAN DE WET SKOOL 24 083.49
220057299 GREYVILLE PRIMARY SCHOOL 57 819.77
220052090 HIGHLANDS NORTH BOYS HIGH 20 337.33
221087257 HILLBROW HOSP.(OLD GENERAL) 1 855 177.56
220025000 HOERSKOOL DIE FAKKEL 577 710.94
220056954 HOSPITAL HILL POLICE STATION -200 215.73
205336033 HOUGHTON SCHOOL 226 464.44
205758275 I H HARRIS PRIMARY SCHOOL 50 001.60
221141121 IGUGULETHU PRIMARY SCHOOL 24 446.36
220058944 IMPALA CRESCENT PRIMARY -140 624.00
201001325 ITHUTE PRIMARY SCHOOL -6 567.00
206609716 JEPPE HIGH SCHOOL FOR BOYS
377.96
205597123 JEPPE HIGH SCHOOL FOR BOYS -930.24
206693447 JEPPE HIGH SCHOOL FOR BOYS ORIBI 21 594.41
205766396 JEPPE HIGH SCHOOL-SABLE HOUSE 6 038.55
220069512 JEPPE POLICE STATION 127 710.00
206059255 JHB GIRLS PREP GIRLS 8 265.36
206152550 JHB GIRLS PREPARATORY SCHOOL 20 857.81
220068100 JHB HOSPITAL 362 179.26
220067096 JOHN MITCHELL SCHOOL 3 193.87
400417818 KAMMALAND KLEUTERSKOOL -18 990.77
220091356 KENSINGTON SECONDARY SCHOOL 87 005.77
220048713 KING EDWARD VII SCHOOL 63 094.00
220048706 KING EDWARD VII SCHOOL 10 163.00
501725641 KLIPTOWN HIGH 26 236.57
220061954 KLIPTOWN REGIONAL COURT PWD
87.18
206152494 LAERSKOOL KENSINGTON 22 367.54
221085179 LAERSKOOL PIET VAN VUUREN -1 551.00
220055559 LANCASTER PRIMARY 51 521.15
501669836 LANCEAVALE SEKONDERE SKOOL 19 375.51
220055245 LIBRA PRIMARY SCHOOL -4 995.28
220056986 LS MODISE 1 336.40
220092173 MALVERN HIGH SCHOOL 131 476.07
206042195 MALVERN LAERSKOOL DISTR 3 2 250.92
City Power: Quarterly Report 2015/16 Final Page 53
Account Number
Name Balance
201001702 MC WEILER PRIMARY SCHOOL 221 782.58
220086395 MELPARK PRIMARY
0.14
220058479 MYNTERING BURO PWD
885.16
221317084 National Department of Public Works
16.03
221515061 NATIONAL DEPARTMENT OF PUBLIC WORKS
63 682.02
221442060 NATIONAL DEPARTMENT OF PUBLIC WORKS
329 463.22
221019218 NATIONAL DEPARTMENT OF PUBLIC WORKS
29 363.00
221387003 NATIONAL DEPT OF PUBLIC WORKS 177 902.61
501727439 NATIONAL GOVERNMENT OF THE REPUBLIC OF S
276 783.10
220078034 NORTHCLIFF PRIMARY SCHOOL -3 878.00
205276975 NORWOOD PRIMARY SCHOOL -18 059.08
220004811 NUWE LANDROS GEBOU 30 646.83
220017433 NUWE REKENINGS GEBOU-SARS
96.01
500439460 OAKDALE SECONDARY -28 478.00
205772914 OBSERVATORY GIRLS PRIM SCHOOL 6 511.66
205494155 OBSERVATORY GIRLS PRIM SCHOOL
0.34
501995519 ONDERWYS HULP SENTRUM SUIDRAND -18 543.44
220093787 OPENBARE WERKE EN GRONDSAKE 24 592.00
220006865 P W D WERKSWINKEL & STORE -60 005.00
502245364 PARKDALE LAERSKOOL -2 580.46
220028700 PHILIP KUSHLICK SCHOOL 20 129.09
220058550 PNEUMOCONIOSIS RESEARCH PWD 196 686.16
220025018 PREPRIMERE SKOOL DIE MOSSIE -7 876.67
300084594 PRIMERE SKOOL ROODEPOORT 60 501.67
400358552 PROVINCIAL GOVERNMENT 18 168.91
551735058 PROVINCIAL GOVERNMENT OF THE PROVINCE OF
199 653.87
551874407 PROVINCIAL GOVERNMENT OF THE PROVINCE OF
767.27
550374313 PROVINCIAL GOVERNMENT OF THE PROVINCE OF
474 600.29
550851301 PROVINCIAL GOVERNMENT OF THE PROVINCE OF
49 841.61
205226111 PUBLIC WORKS DEPARTMENT 22 320.94
207068076 PUBLIC WORKS DEPARTMENT 190 173.13
220004970 PWD
800.80
220069777 QUEENS HIGH SCHOOL HOSTEL 23 060.63
201079836 R S A -4 165.00
220079334 R S A DEPT OF PUBLIC ROADS ATT: STELLA 56 545.18
401917933 R S A HOOFDIREKTORAAT WERKE 23 543.16
City Power: Quarterly Report 2015/16 Final Page 54
Account Number
Name Balance
403314458 R S A HOOFDIREKTORAAT WERKE 80 546.63
403314345 R S A HOOFDIREKTORAAT WERKE
60.94
403314306 R S A HOOFDIREKTORAAT WERKE 106 468.05
403337173 R S A HOOFDIREKTORAAT WERKE 189 771.28
403314352 R S A OPENBAREWERKE&GRONDSAKE
616.67
220078845 R S A OPENBAREWERKE&GRONDSAKE 268 951.00
220042510 R S A PUBLIC WORKS 669 867.18
220035859 R S A PUBLIC WORKS & LAND
7.88
401808758 R S A PUBLIC WORKS & LAND 32 729.83
401886160 R S A PUBLIC WORKS & LAND 280 078.56
221085411 R S A TOD SENTRAAL RAND STRE 1 020 047.25
500279826 RAAD VAN VERTEENWOORDIGERS 60 566.07
220079398 Randburg Home Affairs 36 497.39
403304386 REPUBLIC OF SOUTH AFRICA 38 565.41
502211654 REPUBLIC OF SOUTH AFRICA 19 860.61
205627875 REPUBLIC OF SOUTH AFRICA 196 440.41
403307073 REPUBLIC OF SOUTH AFRICA 341 216.80
504812717 REPUBLIC OF SOUTH AFRICA 385 693.17
207069714 REPUBLIC OF SOUTH AFRICA 175 547.57
504845159 REPUBLIC OF SOUTH AFRICA 18 699.39
502211799 REPUBLIC OF SOUTH AFRICA
112.18
403304403 REPUBLIC OF SOUTH AFRICA 36 157.59
400692451 REPUBLIC OF SOUTH AFRICA 86 457.66
403304315 REPUBLIC OF SOUTH AFRICA 19 236.53
500315432 REPUBLIC OF SOUTH AFRICA 195 958.51
205595052 REPUBLIC OF SOUTH AFRICA 69 554.14
400183327 REPUBLIC OF SOUTH AFRICA 181 172.90
403304308 REPUBLIC OF SOUTH AFRICA 20 092.19
403304361 REPUBLIC OF SOUTH AFRICA 42 858.67
401762454 REPUBLIEK VAN SUID-AFRIKA 49 570.07
401762921 REPUBLIEK VAN SUID-AFRIKA 12 186.65
401762976 REPUBLIEK VAN SUID-AFRIKA 8 691.23
206530918 ROSEBANK PRIMARY SCHOOL 89 389.49
220028957 S A POLICE STATION HONEYDEW
0.23
220091388 SA DEFENCE QUEENS HIGH
46.08
220057098 SA NEVHUHULWI 1 615.53
220080386 SA POLICE FLATS (TRIOMF)
15.34
221087401 SA.POLICE ELDORADO PARK
17.67
City Power: Quarterly Report 2015/16 Final Page 55
Account Number
Name Balance
220007153 SAP BARRAKKE MAINWEG 1 061 837.00
220072040 SAP BRIXTON (MOORD / ROOF AFD) 11 391.00
220062242 SAP CLEVELAND P W D 13 266.98
220059120 SAP DODEHUIS EN KWARTIERE PWD 18 808.36
220059151 SAP DODEHUIS EN KWARTIERE PWD 477 958.26
501416419 SAP MONDEOR 5 472.34
220028435 SAP MOTOR WERKWINKEL
256.15
220078806 SAP RADIO STATION
12.08
206516039 SAP ROSEBANK 13 445.41
220057010 SAP SAM HANCOCK
823.57
220057027 SAP SAM HANCOCK
3.05
220057002 SAP SAM HANCOCK STR -779.00
220056993 SAP SAM HANCOCK STR
672.50
220057066 SAP SAM HANCOCK STR (PWD) 1 076.80
220057080 SAP SAM HANCOCK STR (PWD) 368 322.23
220033682 SAP STATION BOOYSENS 136 234.00
220933683 SAP STATION BOOYSENS -76.02
220093804 SAP WYNBERG 35 422.90
206037653 SAP YEOVILLE 83 764.34
205950853 SAPS -65 730.76
206379784 SAPS -21 699.48
900204430 SAPS SATELIET STASIE 4 129.04
206152254 SIR EDMUND HILLARY PRIM SCHOOL -15 912.00
221092105 SIZWE TROPICAL DISEASE HOSPITAL 1 243 526.51
201001212 SKEEN LP SCHOOL 1 626.60
505294698 SOMELUWAZI PRIMARY SCHOOL -40 771.00
220079197 SOPHIATOWN S.A.P.S
77.80
220017137 SOUTH RAND HOSPITAL 2 939 755.34
220055421 SOUTHVIEW SECONDARY SCHOOL 1 355 749.03
500315344 SPEKTRUM LAERSKOOL X 5 65 220.99
220052276 ST MARYS SCHOOL FOR GIRLS 73 402.00
220044959 TANDHEELKUNDIGEDIENS -27 881.00
220058937 TRINITY SECONDARY SCHOOL 4 256 135.02
301121811 UNIFIED PRIMARY SCHOOL 34 735.26
501918419 WEMMER PAN COMMANDO PWD 330 631.06
400605890 WILHELMINA HOSKINS LAERSKOOL 11 985.63
220061023 WILLOW CRESCENT HOERSKOOL 16 991.92
51 412 696.68
City Power: Quarterly Report 2015/16 Final Page 56
CHAPTER FOUR HUMAN RESOURCES & ORGANISATIONAL MANAGEMENT
Section 1: Human Resource Management
Human Resources’ overall objective as set out in its policies is to ensure that the Company’s employment practices and remuneration policies motivate and retain talented employees and create an attractive environment for all employees. The Human Resources policies are periodically reviewed to ensure that it remains relevant and practical for the changing needs of current and potential employees. Resulting from strategic introspection sessions and the recognition that City Power is at a strategic inflection point, several bold decisions were made by the business which culminated in the decision to re-design the business in its entirety. This was a purposeful effort to align the organisational structure and processes so as to make City Power more effective. This initiative is referred to as the Structural Alignment Programme. The Structural Alignment Programme is a planned change from a deliberate decision to alter the current state, improve business performance and enhance service delivery. The organization re-design initiative (structural alignment) which began to be visible with effect from 1 December 2012 broadly covered the following key aspects as depicted in the framework below:
During the 2012/2013 financial year, the strategic partner role of HR was to focus on aligning the organisation structure to the organisation strategy as outlined in the following action plan which was put in place.
City Power: Quarterly Report 2015/16 Final Page 57
During the 2013/2014 financial year, the Company’s Local Labour Forum adopted an agreement entered into between Management and Samwu, as the majority Union. This agreement entailed the following matters:
Travel Allowance
Cell phone Allowance
Data Card Allowance
Hot Skills Allowance
Structural Re-Alignment
Acting Allowance
50th Percentile / Pay Progression
Essential Services / Rules of Engagement
Shift Policy / Overtime
Annual Leave
Gratuity / Performance Management
The Local Labour Forum Agreement sought to address the inconsistencies and unfairness that existed in the Company with regard to the implementation of benefits, allowances and compliance with Conditions of Service and related legislation.
As is status within City Power :
Issue Status
Allowances (Travel, Cell phone, Data Card, Hot Skills) Resolved
Structural Re-Alignment Resolved
Acting Allowance Resolved
City Power: Quarterly Report 2015/16 Final Page 58
Issue Status
50th Percentile / Pay Progression Resolved
Shift Policy / Overtime
Resolved
Gratuity / Performance Management Resolved
Annual Leave Resolved. A decision was taken to extend the grace period to utilize accumulated leave up to 30 June 2016, after which date, any accumulated leave not taken will be forfeited.
Essential Services / Rules of Engagement A decision was taken at the LLF and HR Steercom that the Rules of Engagement and the Essential Services Agreement be signed in tandem. In respect of the Essential Services agreement, discussions with Organised Labour to look at the revised documents (and numbers) will be resumed in due course. The Rules of Engagement document was reviewed by the LLF (Management and Organised Labour) at a LLF Workshop held on 18 – 19 November 2015. The LLF resolved to refer one section, dealing with representation, for mediation.
HR Policies HR commits to ensure that all HR related policies are regularly reviewed and approved by the Board thus ensuring fairness, compliance and consistent application. All approved policies are available on City Power’s Sharepoint / Intranet. The following policies / processes are currently under review and / or in the development stage:
NO POLICY / PROCESS WHEN
APPROVED
REVIEW PROCESS
1 Integrated Performance
Management Policy (IPMP)
Board -
24/2/2014
Reviewed by HR as part of annual
review process. To be presented to
Organised Labour
2 Training & Development of
Engineers-in-training and
Engineering Technicians-in-
training Policy
Board -
24/2/2014
To be reviewed as part of annual
review process
3 Talent Acquisition Policy Board -
24/2/2014
Reviewed by HR as part of annual
review process. To be presented to
Organised Labour
4 Apprenticeship,
Experiential Learning, Internship
and Learnership Policy &
Procedural Guidelines
Board -
24/2/2014
To be reviewed as part of annual
review process
5 Employee Educational
Assistance Policy and Procedure
for Under- and Post Graduate
HR Committee -
20/5/2014 –
mandated by
Reviewed by HR as part of annual
review process. To be presented to
Organised Labour
City Power: Quarterly Report 2015/16 Final Page 59
NO POLICY / PROCESS WHEN
APPROVED
REVIEW PROCESS
Studies and Scholarships Board of
24/2/2014
6 Bursary Policy Board -
27/6/2014
Reviewed by HR as part of annual
review process. Presented to
Organised Labour on 20/8/2015
7 Sexual Harassment Policy Board -
27/6/2014
To be reviewed as part of annual
review process
8 Mentoring Planning Policy Board -
27/6/2014
To be reviewed as part of annual
review process
9 Employee Re-assignment Policy Board -
27/6/2014
Reviewed by HR as part of annual
review process. Presented to
Organised Labour on 20/8/2015
10 Travel, Accommodation and
Subsistence Policy
Board -
27/6/2014
To be reviewed as part of annual
review process
11 Remuneration, Benefits and
Recognition Policy
Board –
19/9/2014
Reviewed by HR as part of annual
review process. To be presented to
Organised Labour
12 Employment Equity Policy Board –
19/9/2014
Due for review as part of annual
review process
13 Knowledge Management Policy Board –
19/9/2014
Due for review as part of annual
review process
14 Incapacity Policy Board - 2002 Reviewed by HR as part of annual
review process. To be presented to
Organised Labour
15 Special Dispensation Sick Leave
Policy
Board - 2003 To be reviewed as part of annual
review process
16 Community Social Responsibility
Policy
Proposed New
Policy
Presented to
EXCO - referred
back
Developed by HR. Require input from
Relationship Management. To be
presented to Organised Labour
17 Organisational Structure and
Maintenance Policy
Proposed New
Policy
Developed by HR. To be presented to
Organised Labour
18 AET Policy (Adult Education) Proposed New
Policy
Developed by HR. To be presented to
Organised Labour
19 Training, Learning and
development
Proposed New
Policy
Presented to
EXCO – referred
back
Reviewed by HR. Presented to
Organised Labour on 20/8/2015
City Power: Quarterly Report 2015/16 Final Page 60
NO POLICY / PROCESS WHEN
APPROVED
REVIEW PROCESS
20 Records and Archives Policy Proposed New
Policy
Developed by HR. To be presented to
Organised Labour
In the event that there is a need for additional policies in future due to strategic changes within the Business, HR will develop the policy accordingly and follow the required approval process.
Section 2: Employee Remuneration
A total of 1276 eligible employees benefitted from the Pay Progression exercise that was successfully implemented in October 2015.
Section 3: Key Vacancies
Three Executive positions were vacated during the reporting period, namely:
GM: Employee Relations. The position will not be filled in the current financial year. The functions of this position has temporarily been split between the GM: Organisational Effectiveness (Discipline, grievance and suspension matters) and the GM: Talent Management (Employer/Employee relationships)
GM: Relations Management. The GM: Aide-de-Camp was appointed to act in this position.
Director: Human Resources. The Director: Finance was appointed to act in this position.
Progress on recruitment process:
GM: Supply Chain Management. Interviews have been scheduled for 19/20 January 2016.
GM: Learning Academy. Position advertised and interviews conducted.
Director: Engineering Operations. Position advertised and shortlisting in progress.
GM: Legal and Compliance. Position advertised and interviews conducted.
GM: Enterprise Risk Management. Position advertised and interviews conducted.
GM: Stakeholder Management. Position advertised.
GM: Revenue Management. Position advertised and interviews conducted.
Section 4: Employment Equity
HR endorses the four key areas of employment equity identified by the Employment Equity Act:
elimination of discrimination in decision-making;
promotion of employee diversity;
reduction of barriers to advancement of the disadvantaged; and
introduction of measures and procedures for transformation.
The Employment Equity Committee is currently in the process of reviewing the Employment Equity Report for the 2014/15 financial year which is due for electronic submission to the Department of Labour on 15 January 2016.
Statistics :
The staff complement for the reporting period is 1 795 which includes permanent and contract employees.
The Company’s target for Affirmative Action is 85%. The Company achieved 91.25% for all levels and 82.17% for Supervisory and above levels.
The Company’s target for Gender Equity is 26%. The Company achieved 25.85% for all levels and 32.62% for Supervisory and above levels.
The Company’s target for People with Disabilities is 2%. 42 employees have voluntarily declared their disability. This amounts to 2.34% of the total workforce. This compares favourably to the Government and Private Sector figures of 0.6% and 1% respectively according to the DOL report. City Power Staff Complement
City Power: Quarterly Report 2015/16 Final Page 61
City Power fosters effective human resources practices with a view to contributing to the organisation’s goals. The Company’s staff complement is 1 795 which includes permanent and contract employees.
Section 5: Skills Development and Training
The entity is committed to the maintenance of standards by supporting and training staff through its world-class skills development programme. This programme aims to develop both technical and people skills required for the company to conduct its business on an effective basis. Our skills development programmes are in line with the requirements of the Skills Development Act and our workplace plan (WSP) is aligned to our business plan and focus is placed on occupational specific programmes, management development and legally required training.
Bursars
City Power currently has 37 bursars, as detailed below:
No. Race Gender Field of Study Background info : Area/School
1 African Male BSc Electrical Engineering Pro Arte Alphen Park (Menlo Park)
2 African Male BSc Electrical Engineering Dendron High School (Limpopo)
3 African Male B Eng (Electrical & Electronic) Florida Park (Florida)
4 African Male B Eng (Electrical & Electronic)
Vaal Reefs Technical High School
(Orkney)
5 African Male National Diploma Electrical Engineering
St Martin De Porres High School
(Orlando Soweto)
6 African Female Bachelor of Accounting Sciences
Bhukulani Secondary School
(Soweto Zondi)
7 African Male B Eng Electrical Engineering The Hill High School (Rosettenville)
8 African Male B Eng Electrical Engineering
Fons Luminis Secondary School
(Diepkloof)
9 African Female
Advance Diploma Financial
Management
Northmead Secondary School
(Phoenix Durban)
10 African Male National Diploma Electrical Engineering
Diamona Secondary School
(Limpopo)
11 African Male National Diploma Electrical Engineering Julius Secondary School (Hasani
African Coloured Indian White African Coloured Indian White
Top Management
(Executives)3 - - 3 6 1 - - - 1 7
Senior Management 13 1 2 3 19 6 - 1 1 8 27
Professionally qualified
and experienced
specialists and mid-
management Managers
and Professionals
167 10 4 64 245 123 3 - 10 136 381
Skilled technical and
academically qualified
workers, junior
management, supervisors
and Technicians
61 16 1 30 108 26 2 2 8 38 146
Artisans (All types) 279 15 3 53 350 47 1 - - 48 398
Administrative 57 1 1 1 60 103 6 - 16 125 185
Semi-skilled and
discretionary decision
making
517 8 - 3 528 62 - - 1 63 591
Elementary positions 15 - - - 15 43 2 - - 45 60
Total (Permanent and
Contract)1 112 51 11 157 1 331 411 14 3 36 464 1 795
Categories Male Male
Total
Female Female
Total
TOTAL
City Power: Quarterly Report 2015/16 Final Page 62
No. Race Gender Field of Study Background info : Area/School
Dakari, Malamulele)
12 African Male B Eng Electrical Engineering
Bokamoso Secondary School
(Makhulong Tembisa)
13 African Female BCom in Financial Accountancy
Sediba-Thuto Secondary School
(Free State)
14 African Male National Diploma Electrical Engineering Xolani High School (Newcastle)
15 African Male National Diploma Electrical Engineering
Randfontein High School
(Randfontein JHB)
16 African Male BSc Electrical Engineering
Fons Luminis Secondary School
(Diepkloof)
17 African Male BSc Electrical Engineering
Kensington Secondary School
(Kensington East JHB)
18 African Male National Diploma Electrical Engineering
Forte Secondary School
(Dobsonville)
19 African Female BCom Accounting
Pietermaritzburg Girls High School
(Scottsville KZN)
20 Indian Male
Computer Science and Information
Technology Degree
Northmead Secondary School
(Phoenix Durban)
21 African Male National Diploma Electrical Engineering Lwamondo High School (Limpopo)
22 African Male National Diploma Electrical Engineering Zonkizizwe Secondary School
23 African Male National Diploma Electrical Engineering
SJ Van der Merve THS.
(Lebowakgomo)
24 African Female National Diploma Electrical Engineering Thengwe High School (Limpopo)
25 African Female BTech Logistic Management
Tshehlo Secondary School (Ga-
Chuene Marulaneng Limpopo)
26 African Male
National Diploma Information
Technology
Qoqolosing Private High School(
Leribe Kingdom Lesotho)
27 African Male B Eng (Electrical & Electronic) Waterval High School (Elim)
28 African Male National Diploma Electrical Engineering Forte High School (Dobsonville)
29 African Male National Diploma Electrical Engineering
Executive High School (Idutywa
Eastern Cape
30 African Female National Diploma Electrical Engineering
Khatisa High School (Gumbani
Village, Malamulele)
31 African Female National Diploma Electrical Engineering
Mahashe Secondary School
(Bushbuckridge Mpumalanga)
32 African Female Bachelor of Accounting
Erasmus Monareng High School
(Vosloorus)
33 African Female BSc Electrical Engineering
Orlando West Secondary School
(Soweto)
34 African Female BCom Accounting
Sir John Adamson High School
(Winchester Hill)
35 African Female BSc Electrical Engineering Greenside High School
36 African Male National Diploma Electrical Engineering Forte High School (Soweto)
37 African Female National Diploma Electrical Engineering
St Martin De Porres High School
(Soweto)
City Power: Quarterly Report 2015/16 Final Page 63
Integrated Skills Development Grant
During the mid-year, HR submitted a business case to the Department of National Treasury to access their funds to enable the Company to train interns (already qualified academically) on a full time basis in City Power. The Department of National Treasury subsequently awarded a R7.7 million grant to City Power.
City Power is currently mentoring 4 Engineering Technicians on a three year contract to be mentored towards professional registration with ECSA (Engineering Council of SA).
A successful mentorship rotational program is currently in place.
City Power In-house Apprenticeship training Centre
Upon completion of the renovation of the Training Centre and with the appointment of Technical Instructors, City Power will be in a position to start a training program for apprentices.
The long-term plan is to have a Training Centre with at least 15 electrical apprentices per year appointed and being trained in the Centre and on the job until they pass their trade test.
There should be on average 45 electrical apprentices being trained at any given time.
The apprentice training center is currently still being occupied by the Revenue Recovery Project (RRP) team which is delaying training.
EWSETA (Energy and Water Sector Education and Training Authority) Accreditation
City Power currently has two accredited training facilities, namely the (Medium Voltage) Simulator in Roodepoort and the Cable School at Reuven.
Training in Electrical Safety, Safe Operating Procedures and Electrical Switching is done on a continuous basis for internal staff and external companies at the Roodepoort Training Centre.
Training in cable terminations and cable jointing is done at the Cable School at Reuven.
The plan is to also build a HV (High Voltage) simulator at Roodepoort.
A draft HV simulator design has been developed. Work Place Skills Plan (WSP)
An application for the WSP grant was finally approved by the EWSETA on 18 August 2015. Mentorship-ECSA registration
HR has applied to SAIEE (South African Institute for Electrical Engineers) and SAICE (South African Institute for Civil Engineers) for a mentorship program to enable the Company’s Bursars and Diploma
students to become professionally registered with ECSA (Engineering Council of South Africa). Ten candidates were approved to take part in the Mentorship Program and are being mentored
by the South African Institute for Electrical Engineers (SAIEE). This program will enable them to register as Professional Engineers, Technicians and Technologists.
These candidates were visited by SAIEE mentors in September 2015 to monitor their progress and the submission on their quarterly reports.
Two candidates have subsequently withdrawn from the program.
The Learning Academy is in the process of introducing a rotational programme to ensure maximum exposure to benefit the learners.
ELCONOP and Workshop Practice
During the mid-year, fourteen employees attended the Workshop Practice in relation to RPL (Recognition of Prior Learning) and ELCONOP (Electrician Construction Operator) Level 3 with an external contracted training service provider. Four employees were declared competent.
The remaining 10 employees are still in the process of gaining the relevant knowledge in order to prepare them for Trade Test Preparation and Assessment.
In the 2nd Quarter an additional six learners joined the ELCONOP training and an additional twelve learners joined the Workshop Practice training.
Trade Test Preparation and Assessment
A total of 13 learners completed their trade test preparation and were declared competent and have received their Electricians Trade Test Certificates.
No additional learners completed this training during the 2nd Quarter.
Amount spent on Training
City Power: Quarterly Report 2015/16 Final Page 64
To date a total amount of R3 409 866.14 was spent on Technical, Non-Technical and Mandatory Training.
Amount spent on Employee Educational Assistance
To date a total amount of R722 712.40 was spent on Employee Educational Assistance.
Amount spent on Bursaries
To date a total amount of R681 344.15 was spent on Bursaries.
Section 6: Performance Management & Succession Planning
In preparation for the submission of the December 2015 performance scores, the following deliverables took place:
Briefing session done with the Business Performance Managers (BPMs) to clarify the RACI between HR, Strategy & Performance Monitoring departments / value chain.
Company-wide communication and reminders on Performance Management cycles in relation to Performance Management.
Input into Pay Progression automation requirement (for Performance Management Scores & Grades).
Section 7: Change Management
Continuous support given to identified Management who planned to get authorization to change their organizational structures.
Company-wide communication on acting appointments procedure.
City Power: Quarterly Report 2015/16 Final Page 65
Section 8: Disciplinary Matters and Outcomes
As at the end of December 2015, 11 disciplinary matters had been finalised:
Month Group Charges / Nature of Offences Outcome / Sanction
July 2015 RAC Insubordination Dismissal 23/09/2015
RAC Insubordination Found not guilty/ matter dismissed
OPS Failure to obey lawful instruction Written Warning
Aug 2015 OPS Unlawful misappropriation of company property
Charges Withdrawn
Sept 2015 OPS Unlawful misappropriation of company property
Dismissal
RAC Theft and dishonesty Resigned
HR Gross insubordination, Dereliction of duty and bringing the Company’s name into disrepute
Settlement
OMD Failure to obey lawful instruction Dismissed
Oct 2015
OPS Alleged misappropriation of company property, Insubordination, Harassment, Negligence
Written Warning
HR Alleged fraud Final Written Warning, Reduction of Rank and Recovery of Losses
Nov 2015 None
Dec 2015 OPS Fraud Dismissal
As at the end of December 2015, there are 7 employees on precautionary suspensions (with full pay):
Group Number of suspensions
Date of Suspension
Engineering Operations
1 14/8/2014
1 14/8/2014
1 4/5/2015
RAC
1 12/8/2015
1 5/11/2015
Finance 1 8/4/2015
1 25/6/2015
Total 7
Section 9: Leave & Productivity Management
The LLF Agreement of 30 May 2013, inter alia, included a two year grace period in which all employees with accumulated leave were to utilize accumulated leave by 30 June 2015. If employees, for valid reasons which were to be properly motivated, were unable to reduce the level of their accumulated leave, the encashment thereof would be under exceptional circumstances be permitted. The original grace period expired on 30 June 2015.
Line managers are continually urged to have leave plans in place for all employees and manage the normalization of leave balances.
A report is released each month to the business, giving the status of the utilization of accumulated leave and the balances remaining.
A decision was taken to extend the grace period to utilize accumulated leave up to 30 June 2016, after which date, any accumulated leave not taken will be forfeited.
City Power: Quarterly Report 2015/16 Final Page 66
Based on the leave report received from Payroll as at 31 December 2015, it is becoming unlikely that employees with accumulated leave will have exhausted this type of leave by 30 June 2016. However, more accurate information will be confirmed after all December 2015 / January 2016 leave has been processed.
Section 10: Employee Benefits
The Company is a participating employer in the various retirement benefit schemes through which the City of Johannesburg Metropolitan Municipality and its associated Utilities, Agencies and Companies (UACs) provide employment benefits to all their permanent employees through the following four (4) Defined Contribution Funds and one (1) Defined Benefit Fund:
E-Joburg Retirement Fund
City Power Retirement Fund
Municipal Gratuity Fund
City of Johannesburg Pension Fund
Municipal Employees Pension Fund
Each of these funds utilises the services of actuaries to give credibility to the information and to assess the levels of funding as required.
City Power employees can also belong to any of the following five (5) company-approved medical aids:
Bonitas
Discovery
LA Health
Key Health
SAMWUMED
Section 11: Occupational Health & Safety Programmes
HIV/AIDS on the Workplace The management of HIV epidemic is a challenge facing every organisation in our country. City Power is aligning itself with the National Strategic Plan NSP 2014 – 2019, health protocols and it is in the process of implementing SANS 16001: 2013. The entity has determined that HIV will have an impact on the following risk areas: operations, target market risk, supplier risk, legal risk and health risk. Whilst all these risks are under further investigation, and has adopted the following core principles as a basis for its HIV policy:
COMPREHENSIVE DISEASE MANAGEMENT PROGRAMME
HIV Diagnosis Rapid test done at the Wellness Centre.
Efficient provision of ARV’s Most of the employees are registered on the medical aid for chronic disease management.
Reduce the number of new infections and their partners
Health education and Awareness done on a continuous basis and during one on one consultation.
Reduce and monitor HIV co-infections e.g. TB
Employees who presents with co-infections gets referred to the local clinic and to the specialist for further management.
Employee is continuously made aware of the HIV rights and that their rights are respected and protected.
Currently during consultations employee is informed about the HIV rights.
Challenge: Currently the policy has not been reviewed. Interventions:
Review of the HIV policy and communicate to the CP employees.
City Power: Quarterly Report 2015/16 Final Page 67
Counseling is provided for employees and their nuclear families
During case management (HIV Coordinator, OH team and EAP consultants) on employees and their nuclear families counseling services is provided.
INFORMATION, EDUCATION and COMMUNICATION.
Prevention programmes,
health campaigns and
screening are conducted
according to the
International and National
Health calendar e.g.
WORLD AIDS DAY
commemoration.
On annual basis the WORLD AIDS DAY is commemorated
and awareness is conducted. During health campaigns such as
cancers awareness, employees with co-infections are followed
up and managed accordingly as part of the HIV programme.
Employees are kept abreast
with the latest health matters
Health talks are communicated on a monthly basis which may
be associated with HIV and other lifestyle diseases.
Employees are encouraged
to conduct their lifestyle
audit e.g. KABP analysis
Employees are given health education about opportunistic
infections and encouraged to disclose to their partners.
Including supportive counselling.
Communication is done via
the internal communications
department targeting all
employees
Education and information is communicated during one-on –
one consultation, case management and also via internal
communications department targeting all employees
EVALUATION and MONITORING
Identification of gaps is done for continual improvement.
Operational plans, targets, objectives and indicators are evaluated on quarterly basis or as and when.
City Power: Quarterly Report 2015/16 Final Page 68
CHAPTER FIVE FINANCIAL PERFORMANCE & EXPOSURE
Section 1: Statement of Financial Performance and high-level notes
Surplus The surplus before tax translates a negative variance of R382m for the quarter and negative variance of R617m against the budget for YTD. However there is a improvement on the performance of the second quarter against the first quarter. During the first quarter the variance against the surplus was a negative 207%, while the negative variance in the second quarter is 56%. The reasons for the variances are set out below:
Service Charges Service charge for mid-year is less than budget by R1 097m YTD due to a decrease in purchases volumes, unbilled customers, and bypasses prepaid meters.
Figures in Rand thousand Variance Variance Variance Variance Variance
Actual Budget % Actual Budget % Forecast Budget %
Revenue 3 185 751 3 902 536 -716 785 -18% 7 388 660 8 507 981 -1 119 321 -13% 14 521 115 16 548 278 -12%
Service charges 2 845 963 3 521 927 -675 964 -19% 6 643 494 7 740 827 -1 097 333 -14% 12 887 116 15 015 735 -14%
Sales to Eskom 218 111 247 125 -29 014 -12% 493 272 494 250 -978 0% 1 132 245 988 500 15%
Other income 73 917 50 253 23 664 47% 122 737 106 441 16 296 15% 243 439 211 116 15%
Government grants 7 800 43 954 -36 154 -82% 49 675 87 908 -38 233 -43% 99 349 175 815 -43%
Interest revenue 40 032 35 997 4 035 11% 77 671 71 993 5 678 8% 155 341 143 986 8%
Fees earned -119 3 191 -3 309 -104% 1 719 6 381 -4 662 -73% 3 438 12 762 -73%
Rental income 47 91 -44 100% 93 182 -89 -49% 187 364 -49%
Expenditure 2 883 247 3 218 225 -334 978 -10% 7 434 458 7 937 264 -502 806 -6% 13 994 666 14 961 969 -6%
Bulk purchases Eskom 1 790 608 1 869 022 -78 414 -4% 4 933 793 5 168 369 -234 575 -5% 9 066 152 9 497 198 -5%
Bulk purchases Kelvin 252 677 209 033 43 644 21% 622 971 554 520 68 452 12% 1 238 017 1 101 985 12%
Debt impairment 4 144 125 156 -121 012 -97% 250 311 250 311 -0 0% 500 621 500 622 0%
General expenses 172 334 306 921 -134 587 -44% 322 728 611 092 -288 363 -47% 646 909 1 224 933 -47%
Personnel costs 236 299 275 973 -39 675 -14% 468 852 485 982 -17 130 -4% 874 065 906 000 -4%
Finance costs 89 991 87 914 2 077 2% 179 156 175 828 3 329 2% 358 313 351 655 2%
Repairs & maintenance 190 013 204 958 -14 945 -7% 362 123 409 915 -47 792 -12% 724 247 819 830 -12%
Administration 42 707 42 211 496 1% 85 653 87 172 -1 519 -2% 168 605 171 594 -2%
Depreciation & amortisation 104 476 97 038 7 438 8% 208 869 194 076 14 793 8% 417 738 388 152 8%
Surplus before taxation 302 504 684 311 -381 808 -56% -45 798 570 717 -616 516 -108% 526 449 1 586 308 -67%
YTD Jun '16Quarter 2
City Power: Quarterly Report 2015/16 Final Page 69
Quantification of R1 097m is as follows:
- Decrease in purchases volumes impact R160m - Prepaid not buying R203m (Only considered 40% of the total population due to data discrepancies.) - Other R682m
o Decline in billable customers o Unknown customers
Variance increase from R421m in quarter 1 to R676m in quarter 2.
Sales to Eskom: Sales to Eskom are less than budget by R29m for the quarter and R1m against the budget for YTD.
Other Income Other Income for the quarter is R24m more against the budget and R16m more against the budget for YTD due to the following:
DSM Levy is more than R29m against the budget for the quarter and R40m against the budget for YTD. The DSM Levy was reviewed from 1c/kWh to 2c/kWh in the financial year 2015/2016 and the review will be done during mid-term budget review.
Service Charges: 2014/15 and 2015/16 comparative performance (R'000)
Description Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 YTD
Actual 1 140 311 1 272 412 1 384 807 1 095 916 741 283 1 008 764 6 643 494
Budget 1 457 244 1 473 059 1 288 597 1 211 362 1 196 767 1 113 797 7 740 827
Description Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 YTD
Actual 1 145 433 1 151 532 926 881 1 051 659 917 097 964 248 6 156 849
Budget 1 240 629 1 521 603 1 117 109 1 035 667 1 018 022 1 003 091 6 936 120
Sales to Eskom: 2014/15 and 2015/16 comparative performance (R'000)
Description Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 YTD
Actual 86 106 93 617 95 438 96 556 80 267 41 288 493 272
Budget 82 375 82 375 82 375 82 375 82 375 82 375 494 250
Description Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 YTD
Actual 110 832 146 916 133 209 106 643 72 644 120 652 690 896
Budget - - - - - - -
City Power: Quarterly Report 2015/16 Final Page 70
This was partially offset by: New Connections that are less than the budget by R10m for YTD respectively due to the increases in request by customers for new connections and
upgrades. 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.
Street pole ads is less than the budget by R2m for the quarter and R5m for YTD as revenue has been re directed to JPC.
Sundry revenue is less than budget by R2m for the quarter and R7m less than budget for YTD due to the decrease in insurance claims.
Government Grants Grants are less than the budget by R36m for the quarter and R38m for YTD as less grants were received for the period July to December than budgeted. Interest revenue is more than the budget by R4m for the quarter and R6m for YTD. This is mainly due to the interest on debtors that exceeds the budget as a result of the debtors outstanding are higher than budget, this is offset by the interest on cash being less as the cash balance being less than the budgeted cash balance by for the period July to December. OPERATING OVERHEADS: ARE LESS THAN BUDGET BY R168M FOR THE QUARTER AND R336M FOR YTD. The reasons for the variances are set out below: Bulk Purchases
Bulk purchases from Eskom is R78m less than budget for the quarter and R235m less for YTD, Kelvin is R44m more than the budget for the quarter and R68m more for YTD. Eskom is less than budget as a result of a decrease in units purchased. Kelvin bulk purchases exceed the budget due to the Eskom agreement and contract.
Eskom Purchases: 2014/15 and 2015/16 comparative performance (R'000)
Description Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 YTD
Actual 1 201 541 1 165 540 776 105 565 567 641 305 583 736 4 933 793
Budget 1 251 786 1 253 080 794 481 661 837 644 507 562 677 5 168 369
Description Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 YTD
Actual 1 202 030 1 062 070 733 611 520 492 577 685 503 732 4 599 621
Budget 1 052 032 1 090 994 685 009 620 072 581 178 579 595 4 608 881
City Power: Quarterly Report 2015/16 Final Page 71
General Expenses are R135m less than budget for the quarter and R288m less than the budget for YTD:
Stores and materials are R55m less than budget for the quarter and R106m less than the YTD budget due the delay in the installation of solar water heaters during the period.
Telecommunications is R28m less than the budget for the quarter and R56m less than the YTD budget due to a software licenses not paid yet. Software licences are only paid annually.
Professional fees and Consultant fees are less than the budget by R33m for the quarter and R71m less than the YTD budget. There were less consultants utilized during the period under revision.
Staff cost is R8m less than the budget for the quarter and R16m less than the YTD budget as a result of training and subsidised education being underspent.
Final readings & cut off fees are R6m less than the budget for the quarter and R11m less against the YTD budget due to the implementation of smart meters.
Security cost is R2m less than budget for the quarter and R7m less against the YTD budget due to less guards being utilised during the mid-year.
Advertising is also R3m less than the budget for the quarter and R7m less than the YTD budget due to less adverts being placed in the newspapers than expected.
This was been partially offset by:
Fleet costs exceed the budget by R39m for the quarter and R86m for YTD due to an increase in additional vehicles utilised and additional vehicles (generators) that were needed.
Personnel cost Personnel cost is R40m less than the budget for the quarter and R17m less against the YTD budget due to the following:
Incentive bonus are less than the budget for the quarter by R37m and R28m less than the YTD budget as the budget for the payment of bonuses were made in October, however the actual provision is spread on a monthly basis.
Basic Salaries are less than the budget by R6m for the quarter and R15m against the YTD budget due to the slow filling of vacancies
Kelvin Purchases: 2014/15 and 2015/16 comparative performance (R'000)
Description Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 YTD
Actual 139 261 133 035 97 999 92 850 77 104 82 723 622 971
Budget 130 839 131 163 83 484 81 339 62 671 65 023 554 520
Description Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 YTD
Actual 126 377 94 660 79 481 66 847 6 570 21 822 395 758
Budget 145 920 151 447 77 716 43 088 40 042 38 413 496 625
City Power: Quarterly Report 2015/16 Final Page 72
Offset by:
Overtime exceed the budget by R3m for the quarter and R9m for YTD due to high number of vacancies that results in employees working overtime.
Salary recoveries of R14m against capex has not been re-allocated for the quarter and R27m for YTD. Repairs and Maintenance Repairs and Maintenance is less than the budget by R15m for the quarter and R48m less than YTD budget. This is as a result of the slow start of the Jozi@work project, as well as a saving on tree pruning of R20m and Streetlight maintenance of R12m for the half-year. Up keep of yard has also been underspent by R10m, as well as maintenance on software, system integration and data capture. Depreciation & amortisation Depreciation is more than the budget for the quarter by R7m and R15m for YTD due to the capitalization of assets.
City Power: Quarterly Report 2015/16 Final Page 73
Section 2: Statement of Financial Position and high-level notes
Inventories Inventories are less than budget due the decrease in stock levels. Loans to Shareholder Loans to shareholder are less than the budget due to the following:
The amount for post-retirement benefits is less than the budget due to actuarial valuation being less than the budget.
Trade and other receivables Trade and other receivables exceed the budget by R323m predominately due to the contract with Eskom.
Figures in Rand thousand Jun '15 YTD Jun '16
Actual Actual Budget Budget
Current assets 5 195 183 3 703 474 4 283 642 5 569 583
Inventories 142 209 73 046 106 717 86 717
Loan to shareholder - 113 251 152 628 181 542
Trade and other receivables 885 994 441 970 118 223 121 390
Consumer receivables 2 309 778 1 793 212 1 447 867 1 447 867
Cash and cash equivalents 1 857 202 1 281 995 2 458 208 3 732 066
Non-current assets 11 745 277 12 354 987 11 735 282 12 762 418
Property, plant and equipment 11 455 567 12 087 330 11 588 287 12 618 951
Intangible assets 289 710 267 657 146 995 143 468
Total Assets 16 940 460 16 058 461 16 018 925 18 332 001
Current liabilities 4 295 029 3 800 111 2 452 693 3 615 265
Loans from shareholders (ST) 419 062 1 372 567 496 603 496 603
Trade and other payables 3 678 170 2 212 968 1 539 723 2 704 571
VAT payable 144 454 90 492 237 450 256 607
Provisions 53 343 124 085 178 918 157 484
Non-current liabilities 4 875 349 4 627 284 4 519 696 4 345 649
Loans from shareholders 2 697 165 2 482 632 2 707 331 2 479 358
Retirement benefit obligation 12 818 12 818 0 27 595
Deferred income 25 596 28 320 0 -
Deferred tax 1 737 732 1 701 476 1 472 094 1 472 094
Consumer deposits 402 038 402 038 340 271 366 602
Total Liabililties 9 170 378 8 427 395 6 972 389 7 960 915
Share capital and premium 112 466 112 466 112 466 112 466
Accumulated surplus 7 657 616 7 518 599 8 934 069 10 258 620
Total Net Assets 7 770 082 7 631 065 9 046 535 10 371 086
Total Liabilities and Net Assets 16 940 460 16 058 461 16 018 925 18 332 001
City Power: Quarterly Report 2015/16 Final Page 74
Cash and Cash Equivalents Less cash was received during the period under review as the payment levels are less than budget.
Loans from Shareholders (Short term) The amount is more than budget due to cash owned to COJ to an amount of R954m. Trade and other payables are more than budget due to more supplier invoices being outstanding than budgeted. Accrual for Eskom is more than budget due to the increase in demand and unit price. Vat Payable Due to the decrease in revenue vat payable is less than budget. City Power pays VAT on a cash basis; therefore VAT is only paid over to SARS if the cash is actually received from the customers. Provisions Provisions are less than the budget due to a decrease in the performance bonus and leave liability provision. Loans from Shareholders (Long term) The decrease is due to a delay in loan repayments from the City. Deferred income Deferred income relates to connection fees received. The fees are recognised as deferred income until such time as the connection is made, at which stage the income is recognised in the statement of financial performance. The budget is based on the principle that all connections have been completed at period end. Deferred Tax The increase in deferred tax is due to an increase in the temporary differences on fixed assets and the provision for bad debts.
Cash: 2014/15 and 2015/16 comparative performance (R'000)
Description Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 YTD
Actual 2 030 343 1 699 935 1 165 749 1 285 684 1 437 206 1 281 995 1 281 995
Budget 2 763 012 2 643 964 2 221 442 2 311 327 2 482 902 2 458 208 2 458 208
Description Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 YTD
Actual 1 913 848 1 316 537 512 551 1 075 229 1 420 122 1 553 389 1 553 389
Budget 2 157 360 2 261 543 1 652 697 1 619 980 1 686 259 1 538 314 1 538 314
City Power: Quarterly Report 2015/16 Final Page 75
Section 3: Cash Flow Statement
Section 4: Ratio Analysis
Section 5: Report on Irregular, Fruitless and Wasteful Expenditure and Due Processes
None
Section 6: Pending Litigations and Possible Liabilities
There are 2 summons relating to fibre cable damaged by our contractor received during the mid-year which are having settlement negotiation relating to quantum with the plaintiff. There are 6 application for relating to Billing that the City Of Johannesburg is attending to on our behalf as they
are responsible for billing matters in terms of our Agency Agreement.
Section 7: Insurance Claims against/to MOE
There are 12 assets insurance claim which in total amount to R1 044m received during the mid-year. None of these claims has been settled as we are still attending to them together with the loss adjusters.
Sources of funding
Loss after tax -45 787
Less Depreciation 208 869
Cash deficit from trading 163 082
Increase in shareholder loans 625 721
Decrease in trade receivables 444 024
Decrease in intangible assets -
Decrease in consumer receivable 387 126
Decrease in inventory 69 163
Decrease in cash 572 904
Increase in deferred tax
2 262 020
Application of funding
Decrease in trade payables 1 392 212
Increase in fixed assets 840 630
Decrease in other liabilities 29 178
2 262 020
RATIOS Jun '15 Dec'15 Dec'15 Jun '15
Actual Actual Budget Budget Benchmark
Current ratio (times) 1.21 0.97 1.75 1.54 1.00
Solvency ratio (times) 1.85 1.91 2.30 2.30 2.00
Debt:Revenue (%) 24% 27% 19% 17% 45%
Remuneration:Expenditure (%) 20% 25% 22% 23% 30%
Maintenance:Net assets (%) 5% 3% 4% 5% 7%
Interest:Expenditure (%) 3% 2% 2% 2% 5%
Net operating margin (%) 5% -1% 5% 10% 10%
Cash cover (days) 55 66 119 96 50
Creditors days 10 15 30 30 30
Debt impairment as % of revenue (%) 5% 4% 3% 4% 3.5%
Debtors days (days) 63 47 33 33 55
City Power: Quarterly Report 2015/16 Final Page 76
CHAPTER SIX INTERNAL & EXTERNAL AUDIT FINDINGS
Section 1: Results of Internal Audits
Internal Audit commenced the audits listed below during the second quarter. These audits are still in progress and therefore no conclusions are being reported:
RISK DESCRIPTION RISK RATING
AUDIT PROJECT AUDIT SCOPE
Inability of the Capital Programme to respond to the strategic requirements, further exacerbated by poor execution or failure to deliver, resulting in: Inadequate capacity, Service delivery failure, Increased unplanned outages and Operational failure.
Medium 1. Performance Audit for the Capital Programme and related processed.
1. Performance audit for the capital programme including the execution thereof which will provide a conclusion on effectiveness, efficiency and economics of the programme.
Network deterioration resulting in increasing unplanned outages, reputation failure and financial loss.
High 1. Performance Audit for the Maintenance and related processed. 2. Determination of completeness of network database (GIS) and the network maintenance plan.
1.1 Performance audit for network maintenance and related processes (including the execution thereof) which will provide a conclusion on effectiveness, efficiency and economics of the programme. 1.2 Technical review of adequately of the maintenance plan strategy vs. best practice. 2.1 Verify completeness of network on GIS and maintenance planning systems.
Poor Project/programme management resulting in failure to deliver agreed Project outcomes/benefits at the agreed quality or within the timeframe, resulting in excessive costs (financial losses), perception of management failure, and failure to implement sustainable solutions.
High 1. Review/Advisory on project/programme management underway in 2015/16. 2. Performance audits for key projects/programmes.
1. Review/Advisory on project management methodology, project monitoring and reporting. 2. Performance audit on some key projects in order to determine efficiency, effectiveness and the economics of the project.
Excessive use and dependence on contractors diminishes the ability of CP to deliver on its mandate, and results in loss of intellectual knowledge and skills, resulting in the inability to build a sustainable business.
High 1. Review of management’s strategy to limit consultants reliance going forward as well monitoring of verifiable skills transfer.
2. Performance Audits on use of consultants.
1. Review the projects/programmes performed by consultants and ascertain the following: 1.1 Reasons for inability to perform the tasks
in-house.
1.2 Skills transfer during the project.
1.3 Future plans to limit reliance on consultants for same or similar projects in the future. 2. Perform performance audits to determine effectiveness, efficiency and economics for projects where consultants we engaged.
City Power: Quarterly Report 2015/16 Final Page 77
Section 2: Progress on Resolution of Internal Audit Findings
Progress with regards to resolution of findings as at 31 December 2015 is as follows:
Matters raised in financial year 2013/14
Internal Audit Findings for 2013/14
Internal Audit
Assessment
Rating of unresolved findings
Number of
items to be
resolved
Currently
being
reviewed
Reviewed by Internal Audit
Unresolved High Medium
Low
Finance 24 2 19 3 2 3 0
Human
Resources 13 1
10
2 3 0
0
Retail 9 3 4 2 4 1 0
Engineering
Services 31 9
20 2 6 5
0
RAC 0 0 0 0 0 0 0
Engineering
Operations 10 2
3 5 5 2
0
Total IA Findings 87 17** 56 14 20 11 0
City Power: Quarterly Report 2015/16 Final Page 78
Matters raised in financial year 2014/15
EXCO is receiving continuous feedback with regards to resolution of both internal and external audit findings. Internal Audit has been given a mandate to follow up all matters resolved by management within the second quarter of the 2015/16 financial year. Retail Services acknowledges 13 items on 2014/15 Internal Audit however 8 items should be under review and 2 items be removed from Retail Services. The remaining 3 items are still unresolved as they relate to estimations, revenue and call centre performance.
Internal Audit Findings for 2014/15
Internal Audit
Assessment
Rating of unresolved findings
Number of
items to be
resolved
Currently
being
reviewed
Reviewed by Internal Audit
Unresolved High Medium
Low
Finance 13 5 4 9 7 2 0
Human
Resources 14 1
3 10 8 2
0
Retail 13 6 0 13 9 3 1
Engineering
Services 20 5
11
9 7 2
0
RAC 17 8 4 13 9 2 2
Engineering
Operations 12 1
2 9 6 3
0
OMD 8 1
0 7 5 1
1
Various 6 2
0 4 2 1
1
Total IA Findings 103* 29** 24 74 53 16 5
City Power: Quarterly Report 2015/16 Final Page 79
Section 3: Progress on Resolution of External Audit Findings
Management Self-Assessment
Detail to unresolved
Number of items
to be resolved
Resolved Unresolved In Agreement Under review
Finance 25 24 1 23 1
Human Resources 7 7 0 7 0
Retail (1 old finding)
2 0 2 0 0
Engineering Services
7 5 2 5 0
RAC 2 2 0 2 0
Company secretary 1 1 0 1 0
Engineering Operations
0 0 0 0 0
Total AG Findings 44 39 5 38 1
Section 4: State of Internal Controls
As audits that were commenced during the first half of the year are still in progress, there is no opinion on the state of controls for the period under review.