midyear report july to december 2012 final reports... · 2014. 9. 12. · city power midyear report...

Midyear Report

July to December 2012

Final

City Power Midyear Report – July - December 2012

Final Page 2

Table of Contents

ABBREVIATIONS/ACRONYMS ......................................................................................................................... 4

CHAIRPERSON’S REPORT ................................................................................................................................ 5

COMPANY PERFORMANCE REPORT ................................................................................................................ 6

1.1 ACHIEVEMENTS ........................................................................................................................................ 6 1.2 CHALLENGES ............................................................................................................................................ 6 1.3 TRENDS .................................................................................................................................................. 7 1.4 INTERVENTIONS ........................................................................................................................................ 7 1.5 RISKS AND MITIGATIONS ............................................................................................................................ 9 1.6 DIVISION PERFORMANCE OVERVIEW .......................................................................................................... 11

2 SERVICE DELIVERY MONITORING ......................................................................................................... 18

2.1 CITY POWER GDS AND IDP SCORECARD WITH KEY PERFORMANCE AREAS AND INDICATORS ................................. 18 2.2 CITY POWER BALANCED SCORECARD WITH KEY PERFORMANCE AREAS AND INDICATORS ...................................... 19

3 PROJECT/INFRASTRUCTURE REPORT ................................................................................................... 26

3.1 ANALYSIS OF THE MASTER CAPITAL PROGRAMME ......................................................................................... 26 3.2 CAPITAL EXPENDITURE DETAILS ................................................................................................................. 26 3.3 FUNDING CLAIMS .................................................................................................................................... 29 3.4 FUNDING SOURCE................................................................................................................................... 29

4 HUMAN RESOURCES ............................................................................................................................ 30

4.1 STAFF COMPLEMENT ............................................................................................................................... 30 4.2 STAFF MOVEMENTS ................................................................................................................................. 30 4.3 EMPLOYMENT EQUITY AND AFFIRMATIVE ACTION PLANS AND PROGRAMMES ...................................................... 30 4.4 SKILLS DEVELOPMENT PLANS .................................................................................................................... 31 4.5 STAFF VERSUS COST OF STAFF TO TOTAL OPEX .............................................................................................. 32 4.6 EMPLOYEES WELLNESS PROGRAMME ......................................................................................................... 32 4.7 THE MANAGEMENT OF HIV/AIDS IN THE WORKPLACE ................................................................................... 33

5 PROCUREMENT POLICIES AND PRACTICES ........................................................................................... 33

5.1 BROAD BASED BLACK ECONOMIC EMPOWERMENT ....................................................................................... 33 5.2 EXPANDED PUBLIC WORKS PROGRAMME .................................................................................................... 34

6 FINANCIAL REVIEW .............................................................................................................................. 35

6.1 INCOME STATEMENT ............................................................................................................................... 35 6.2 STATEMENT OF FINANCIAL POSITION .......................................................................................................... 39

6.3 CASH FLOW STATEMENT ..................................................................................................................... 42

7 RISK MANAGEMENT ............................................................................................................................ 43

7.1 BACKGROUND ........................................................................................................................................ 43 7.2 UPDATE ON RISK MANAGEMENT PROCESS .................................................................................................. 43 7.3 MONITORING AND REPORTING .................................................................................................................. 43 7.4 AUDITING ............................................................................................................................................. 43

8 FLEET ................................................................................................................................................... 46

8.1 THE UTILISATION OF VEHICLES ................................................................................................................... 46 8.2 THE SIZE OF THE CITY POWER FLEET............................................................................................................ 46 8.3 FLEET CONTROLS .................................................................................................................................... 46 8.4 HIRING OF FLEET FROM PRIVATE SECTOR COMPANIES (AVIS & EQSTRA) .......................................................... 46


Final Page 3

8.5 FRAUD AND THEFT IN RESPECT OF FUEL ....................................................................................................... 46

9 GOVERNANCE ...................................................................................................................................... 47

9.1 BOARD MEETINGS .................................................................................................................................. 47 9.2 DIRECTORS AND TOP MANAGEMENT REMUNERATION ................................................................................... 47 9.3 BOARD FUNCTIONING AND FINANCIAL MANAGEMENT ................................................................................... 49

10 LEGISLATIVE ......................................................................................................................................... 50

10.1 NERSA ................................................................................................................................................ 50 10.2 COMPLIANCE WITH NRS 047 ................................................................................................................... 50 10.3 COMPLIANCE WITH NRS 048 ................................................................................................................... 50

11 KEY ISSUES WITH RESPECT TO THE AUDIT COMMITTEE ....................................................................... 51

11.1 STATUS OF FIXED ASSET REGISTER ............................................................................................................... 51 11.2 MATTERS AFFECTING THE AUDIT REPORT ..................................................................................................... 51 11.3 OTHER IMPORTANT MATTERS .................................................................................................................... 52

1. ANALYSIS OF INTERNAL BUSINESS PROCESSES .................................................................................... 54

12.1 CUSTOMER RELATIONS MANAGEMENT (IF APPLICABLE) .................................................................................. 54 12.2 SAFETY AND SECURITY STRATEGY ............................................................................................................... 54 12.3 SAFETY, HEALTH, ENVIRONMENT AND QUALITY ............................................................................................ 55 12.4 DISASTER MANAGEMENT ......................................................................................................................... 55 12.5 OPERATIONAL POLICIES AND PROCEDURES ................................................................................................... 55

13. EXERCISE OF SPECIFIC DELEGATIONS ................................................................................................... 56

13.1 ATTENDANCE OF TRAINING COURSES .......................................................................................................... 56 13.2 CANCELLED CONTRACTS ........................................................................................................................... 57 13.3 CONTRACT MANAGEMENT ....................................................................................................................... 57

14. CONCLUSION ....................................................................................................................................... 57

15. APPENDIX ............................................................................................................................................ 58

15.1 EMPLOYMENT EQUITY REPORT ......................................................................................................... 58


Final Page 4

ABBREVIATIONS/ACRONYMS

Abbreviation/ Acronym

Explanation/ Description

AA Affirmative Action

ABC Aerial Bundled Conductor

ADMD After Diversity Maximum Demand

AFS Annual Financial Statement

AG Auditor General

AMR Automated Meter Reading

AMI Automated Meter Infrastructure ( Smart meter)

BBS Behaviour Based Safety

BBBEE Broad Based Economic Empowerment

Capex Capital Expenditure

CCMA Commission for Conciliation, Mediation and Arbitration

COJ City of Johannesburg

DIFR Disabling Injury Frequency

DoE Department of Energy

DSM Demand Side Management

EAP Employees Assistant Programme

EPWP Expanded Public Works Programme

EWSETA Energy and Water Sector Education and Training Authority

FY Financial Year

GDS Growth and Development Strategy

GRAP Generally Recognised Accounting Practice

HR Human Resources

HV High Voltage

IBT Inclining Block Tariff

IDP Integrated Development Plan

ISO Internal Organisation for Standardization

JMPD Johannesburg Metro Police Department

KPA Key Performance Area

KPI Key Performance Indicator

LPU Large Power User

MD Managing Director

MDMS Master Data Management System

MOE Municipal Owned Entity

MRQC Meter Reading Quality Control

MV Medium Voltage

MYPD Multi Year Price Determination

NERSA National Energy Regulator of South Africa

NHIL Noise Induced Hearing Loss NRS National Rationalised Standards

OPEX Operating Expenditure

R&CRM Revenue and Customer Relationship Management

RAC Risk Assurance and Compliance Department

RAT Remote Access Terminal

RNC Revenue Nerve Centre

SABS South African Bureau of Standards

SAP System Application and Production in Data Processing

SCM Supply Chain Management

STEP Service Delivery, Transformation, Excellence, Performance

SHEQ Safety Health Environment and Quality

SLA Service Level Agreement

SWH Solar Water Heating

USDG Urban Settlement Development Grant

VDO Vehicle Display Output

YTD Year to Date


Final Page 5

Chairperson’s Report The first six month of the 2012/13 financial year results of City Power show continued efforts to meet and exceed the expectations of our shareholder as reflected in the service delivery objectives in our company scorecard. The appointment of the Managing Director (MD) for the organisation was finalised. Sicelo Xulu, who has been acting in this position since November 2010, has been appointed as City Power MD from 1 September 2012. The Board has also approved a structure that will support the MD in his endeavours. The appointment and the structure will ensure continued business stability, sustainability and improvement. The strategic priorities of the City of Johannesburg, as the sole shareholder of City Power, drive strategic direction 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. The first six months have been marked with several achievements on our sustainability journey. City Power has received level 3 Broad-Based Black Economic Empowerment (B-BBEE) status level and disability representation is 3% which is above the National guidelines. There has also been a general improvement in employee safety standards thus there have been no employee fatalities at City Power for the past three years. The company has maintained a DIFR that is below the international standard. An improvement in service delivery has been seen through the organisation exceeding its targets on installation of Solar Water Heating. To achieve our vision statement “To be a world-class electricity distributor” requires long-term planning that takes into account the complex interplay of economic growth, demographic shifts, transmission requirements, protection of the environment by shifting to low carbon infrastructure, improving revenue management and cost recovery. The organisation‟s efforts to improve service delivery and its processes have been recognised by the South African Bureau of Standards (SABS) that has awarded City Power their President‟s Award. Unfortunately City Power has attained a qualified audit for the 2011/12 financial year. However the organisation has put interventions in place to address the qualification, other matters and challenges faced by the company. These interventions are called the STEP Program. This program has 10 targets for the organisation to achieve within the next 3 years to improve service delivery and ensure continuous improvement. In conclusion, City Power will tackle these projects with determination and with the benefit of strong support from our shareholder – the City of Johannesburg. The Board and 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. The Board and Management are committed to ensuring good corporate governance and transparent compliance to legislation while delivering an improving, sustainable and reliable service. City Power‟s progress equates to that of City of Johannesburg‟s advancement. In this regard City Power‟s success is crucial.


Final Page 6

COMPANY PERFORMANCE REPORT

1. EXECUTIVE SUMMARY This report presents the performance of City Power for the first six months, from July to December 2012. The report is divided into sections that cover all operational functions of the company in line with its strategic objectives. City Power has had a mixed performance for the first six months of the 2012/13 financial year. City Power operates in a fairly complex & challenging environment with competing stakeholder expectations, priorities and various operational challenges. Below are some of the organisation‟s major achievements and challenges for the six months.

1.1 Achievements The organisation has significantly reduced HV outages by using condition monitoring and live-line technology. This is to be expected, as the organisation took a strategic decision to spend most of its Opex and Capex to strengthen and expand its HV network. In contrast, there is a need for more improvement on MV and LV performance.

Another example of mix performance can be seen in the organisation‟s safety records. Electricity is a very dangerous commodity to work with. For this reason, City Power has always prioritised SHEQ in doing its business. This is evidenced by the following:

attainment of injury free man hour milestones,

maintenance of the DIFR below threshold of less than 1 (actual 0.45) and

no employee fatalities for the six month reporting period.

This is contrasted by three public fatalities that have happened in the last six months. These fatalities are mainly as a result of illegal connections, thus the company is engaging various stakeholders to combat this situation, including conducting community awareness campaigns to educate the community on the dangers of electricity. Below are some more of the organisation‟s major achievements for the first six months of the 2012/13 financial year:

Operationalisation of the Board approved structure and establishment of RAC and Retail‟s Services Groups to ensure improvement in service delivery and to address the audit qualification.

Installation of 22710 solar water geysers in various areas including, Alexandra (5480), Devland (4860), Lehae (3149) and Tshepisong (4350).

City Power is the winner of the SABS President‟s Award 2012 in recognition of the organisation‟s efforts to improve service delivery and its processes.

1.2 Challenges Four major challenges have been identified in this financial year. City Power has put mitigations in place to overcome the challenges below:

The target for midyear was not met; total losses are 22.7% against original budget of 12%. An integrated plan has been developed and will be finalised after incorporating the roll-out of smart meters, installation of RATS and protective structures. Appointed contractors are


Final Page 7

being engaged in finalising the roll-out plan. City Power has also embarked on Zero Based Budgeting and the new losses budget will be used after final approval of budget revisions.

Reading of meters consistently on a monthly basis is still a challenge. The biggest challenge is getting access to customer‟s properties. City Power has appointed contractors to move meters from inside the properties to the boundary for ease of access. The implementation plan will be finalised and integrated with the smart meter roll-out, with priority being given to meters unread for periods longer than 3 months.

Three (3) public fatalities occurred in the first six months of the FY. City Power is engaging various stakeholders to combat this situation and conducting community awareness campaigns to educate the community on the dangers of electricity.

The following mitigating actions are being taken to reduce theft and vandalism: o Replacing overhead copper cables with Arial bundle Cable (ABC), which has less

copper content o Filling trenches with concrete (makes it difficult for criminals to dig underground

cables) o Anti-cable theft awareness, by visiting SMD‟s (scrap metal dealers) in the

surrounding areas and engaging with the local community o Coordination and support initiatives are on-going with other law enforcement

agencies. 1.3 Trends

Continuous improvement in employee safety programs. The last employee fatality was in 2009.

1.4 Interventions To address the challenges and to ensure continuous improvement in the organisation, under the leadership of the MD and the Board, City Power has identified the STEP Program. The STEP program is aligned to what the Executive Mayor said about changing course: “It is about making a conscious decision not to retrofit the old in the Growth and Development Strategy (GDS), but adopting new and ground-breaking methods and initiatives fitting for a World Class African City.”

1.4.1 10 STEP Programme The ten projects that have been identified as part of the STEP program and their status are outlined below:

Status Symbol

Definition Status Symbol

Definition Status Symbol

Definition

On track to be completed by proposed completion date

Behind schedule, but will catch up to reach proposed completion date

Behind schedule


Final Page 8

Business initiative Project Stream Status Comments

Attaining an Unqualified audit in a sustainable

manner

Revenue Audit

Internal Audit Controls City Power has received a qualified audit report for the 2011/2012 financial period. There is a plan and on-going action to address the qualification and other matters. Monthly monitoring and approval of audit reconciliation is done.

Reduce losses to 10%

by December 2015 Revenue Step Change

The target for midyear was not met; total losses are 22.7% against original budget of 12%. An integrated plan has been developed and will be finalised after incorporating the roll-out of smart meters, installation of RATS and Protective structures. Appointed contractors are being engaged in finalising the roll-out plan

Achieving 98% meter reading by June 2013

(100% Compliance to the by-law)

99% Meter Reading AMR LPU customers

95% AMR and Manual Meter Reading for Domestic customers

98% Domestic AMR

This is an on-going process through the meter reading auditors; progress has been seen on improved meter reading performance. For AMR LPU Metering is currently finalising the assessment and ordering of equipment for all faulty meters. Fixing of meters and its ancillaries will commence during the 3rd quarter.

AMR LPU Customers 75.71%

Domestic AMR 80.61%

Manual Meter Reading Domestic 82.62% A meter reading war plan has been developed.

Achieving 100% payment level for key

and LPU customer by June 2013

100% payment level

The payment level is 87.54% year to date for all customers; City Power is working with R&RCM to separate Key and LPU customer payments, which will be done by the 3

rd quarter for reporting purposes

City Power has started with the analysis of collectable and non-collectable debt. Focus will be placed on ensuring that queries are cleared and collectable debt‟s customers are cut-off

Achieving 90% data accuracy by 2015

Data Governance

Customer domain

Employee domain

Network domain

A collaboration committee has be established with CoJ to resolve data issues relating to billing, meter installation and maintenance. Completed the initial desktop analysis of 498 314 records, to resolve AG findings relating to customer data completeness and services provided

Installing 100 000 SHW

December 2016 Energy mix

Megawatts reduced

In the last six months City Power has installed 22710 SWH, including 3149 in Lehae, 4860 in various areas including, Devland, 4350 in Tshepisong and 5480 in Alexandra. The project is ahead of the target.

Achieving full compliance to NRS 047

and 048 immediately

NRS 047 Frequency of meter reading - Meter reading performance has improved from 75.33% in June 2012 to 81.02% in December 2012. Number of unread meters in the last quarter has dropped from 64 078 to 50 976

Disconnection and reconnection – All disconnections and reconnections received were actioned according to the NRS standards

Account queries – Query resolution year to date is 65% as compared to the target of 95% but it should be noted that this is a consolidated figure for all MOE‟s. A request for only electricity related queries has been forwarded to R&CRM.

Meter Accuracy queries – There is no standard report, engagements with R&CRM have commenced to develop a report.


Final Page 9

Business initiative Project Stream Status Comments

Customer complaints – Service Level Agreement has been finalised, which will assist in managing performance effectively.

Customer enquiries – A Service Level Agreement has been finalised, which will assist in managing the performance effectively.

Customer requests – A Service Level Agreement has been finalised, which will assist in managing performance effectively.

Call Centre performance - Service Level Agreement has been finalised, which will assist in managing performance effectively.

Call Centre Availability - R&CRM has increased Call Centre capacity

On restoration time - three out of the four restoration targets achieved.

NRS 048 100% compliance to NRS 048.

Achieving 90:10 Planned: Unplanned by

December 2015

Power Outages

Restoration Times

48:52 planned:unplanned outages for the midterm was recorded. City Power has not met the target of 70:30 for the year due to an increase in unplanned work during the summer months. This was mainly due to adverse weather conditions.

Accelerated Visible Service Delivery.

100% compliance to the SLA,

A Service Level Agreement has been finalised, which will assist in managing performance effectively. City Power will ensure that all Key Performance Indicators are monitored and reported on regularly.

Electrification,

Public Lighting

1532 houses have been electrified and 1964 public lights have been installed to date. The company will attained its annual targets.

Institutional renewal

Structure alignment

HR Optimisation

The organisational structure has been approved by the Board and communicated to all staff. The organisation is currently aligning to structure.

Innovative Product Pricing by 2015

Introduction of Domestic Time of Use

Green Tariffs

The study is currently underway to ensure proper introduction of Domestic Time of Use and green tariffs.

1.5 Risks and Mitigations The organisation has identified 13 top risks and these are being closely monitored.

Risk Description Current controls Actions to improve management of the risk

1 Poor Revenue Collection 1. Conversion from conventional to prepaid /smart meters 2. Manage the Service Level Agreement with the City. 3. Management of customers in segments with R&CRM

1. Continuous management of the SLA. 2. Conversion from Conventional to Pre-Paid Meters. 3. Need to segment customers and reintroduce the key customer exec.

2 Cable theft 1. Improved security in hot spot areas. 2. Implemented Crime Intelligence systems. 3. Crime prevention strategy in place. 4. Implementation of crime prevention technologies.

Review additional prevention strategies: 1. Replacing overhead copper cables with Arial

bundle Cable (ABC) which has less copper content

2. Filling trenches with concrete (makes it difficult for criminals to dig underground cables)

3. Anti-cable theft awareness by visiting SMD‟s (scrap metal dealers) in the surrounding areas and engaging with community

4. Coordination and support initiatives are on-going with other law enforcement agencies.


Final Page 10

Risk Description Current controls Actions to improve management of the risk

3 Customer dissatisfaction. 1. Manage SLA with the City. 2. Working with City to improve processes. 3. Internet faults logging system. 4. BC Forums.

Reviewing value chains.

4 High primary energy pass through costs.(OCGT & KPS)

1. Strict control over PPA and penalties on poor delivery. 2. Hold monthly meeting with Kelvin Management. 3. Limited provision for the gas turbines in the current budget.

1. Explore additional funding for the gas turbines. (e.g. Off-takers) 2. Engage with 3rd parties to buy power at the cost of generation.

5 Business's inability to fund high capital and operational requirements out of current cash flows nor future tariff applications

1. Revenue Generating projects 2. PPP initiatives 3.Sourcing additional Grant Funding

1. Exploring the off Balance Sheet Arrangements with Funding institutions. 2. See additional grants from National Treasury and other departments.

6 Non availability and reliability of Information & communication technology (ICT).

Currently reviewing and updating the Information security policies and the Disaster recovery strategy

1. Programme to align to King III recommendations. 2. Review and strengthen the current controls. 3. Modernising and upgrading infrastructure.

7 Fraud & Corruption 1. A fraud Policy has been introduced. 2. A fraud & corruption prevention plan is in place. 3. An illustrative list of strategic fraud risks is in place.

1. Awareness campaigns on anti-fraud and corruption.

8 Qualified audit report. 1. Practicing good governance 2. Actively addressing all issues raised in the previous year's Management Report.

1. Alignment with King lll requirements. 2. Continue to comply with legislation. 3. Implementation of GRAP 4. Integrated Reporting 5. Staff Development

9 Increase in non-technical losses

1. Installation of semi AMR, Tamper proof meters and pre-paid meters with protective structures; 2. Removal of illegal Connections and replaced with tamper proof meters with protective structures. 3. Currently utilising JMPD & SAPS to enforce by-laws. 4. Continuous installation audits; 5. Customer education programs;

Continue with present controls and monitor the effectiveness.

10 Network interruptions 1. Maintenance & Capital Investment program in place. 2. Asset Management system in place. 3. Crime prevention strategy in place.

Introduction of condition monitoring project and continue to review additional crime prevention strategies

11 Inadequate capacity to meet the demand. (Eskom & Kelvin)

1. City Power has applied for increased capacity from Eskom. 2. Investigating distributed generation options. Implementing DSM Program. Resuscitate Gas Turbines.

1. Investigating alternative sources of energy e.g. 2. Piloting Solar Powered Streetlights.

12 Potential impact of HIV and Aids on the workplace and the Business

1. On-going awareness and education 2. Roll out of planned interventions to address the areas identified e.g. Prevalence study, Cost impact analysis, etc

1. On-going HCT's 2. Cost impact analysis 3. Stringent disease management. 4. Intervention projects such as education & awareness 5. Enhanced HIV/Aids Policy

13 Lack of focused development of key skills

1. Focused and targeted skills development interventions. 2. Increase the number of workplace coaches

1. Improve needs analysis process - use of Group Skills Plan, 2. Develop and implement annual training calendar 3. Implement controls and reporting measures 4. Increase number of workplace coaches and mentors 5. Implement succession planning

City Power will ensure continuous business performance improvement and will continue to meet and exceed the expectations of all our stakeholders.


Final Page 11

1.6 Division Performance Overview City Power has Seven Divisions as per the new board approved structure that is outlined below:

Some of the performance highlights per divisions are outlined below:

1.6.1 Retail Services

Interventions o Initiated a metering call centre to deal with unread meters o Initiated disconnection of inaccessible meters not read for more than 3 months

Achievements o Overall meter reading performance has improved from 75.33% in June 2012 to 81.02%

in December 2012 o Improved collection levels for November and December 2012 o Non-technical losses for December are below budget.

Challenges and Mitigations Challenges Mitigation

1 Streamlining operational relationship with R&CRM

Planned Integration meetings will be held on monthly basis with R & CRM

2 System updates not updated on time

On-going performance meeting are held with R&CRM to discuss progress on job cards submitted

3 IBT queries – negative publicity Ongoing communication to teach customers about IBT. For the future, there will be a review of how IBT is being implemented.

4 High number of unread meters due to access, faulty and incorrect data

Action faulty meters timeously

Relocation of inaccessible meters to the boundary

Ensure accurate meter data per serviced stand

5 Escalated Queries City Power to have access to CRM system to log queries

6 Debt increase Analysing the debt into collectable, pending investigations and possible write-off.

Analysed debt will be segmented to customer category and priority will be given to managed accounts


Final Page 12

Trends o Payment level is still below target year to date however we have noticed an

improvement in collections for November and December. o Call centre performance is not improving

Risks and mitigations

Risks Mitigation

1 Unqualified audit opinion Plan to address unread meters.

2 Non-compliance to NRS 047, by laws and Customer Charter

Monitor and Report compliance on a monthly basis

Engaging affected departments

Improve City Power visibility to all stakeholders

3 Revenue completeness SAP CoJ and MRQC Monthly Reconciliation are being done

Serviced stands meter audit completeness

1.6.2 Engineering Services

Interventions o As part of City Power‟s institutional renewal project and the maintenance strategy

journey map to progress from reactive to preventative maintenance a new Plant Condition Monitoring section has been created within the Engineering Services group. The primary function of this section will be to undertake the condition monitoring of all components forming part of the electricity supply chain. The components to be monitored will be overhead lines, major substations, the distribution networks, secondary plant and public lighting.

o Normalization of prepaid meters including installation of remote monitoring system and protective structures

Achievements o Installation of 22710 solar water geysers in various areas including, Alexandra (5480),

Devland (4860), Lehae (3149) and Tshepisong (4350). o A total of 1532 households have been electrified during this period.

Challenges o Timeous delivery of equipment such as smart meters and protective structures. This is

resolved by staying in contact and applying pressure on suppliers for timeous delivery. o Finalisation of the new structures and identifying funding for filling of positions.

Trends o Theft and vandalism of new infrastructure which result in delaying of projects

Risks and mitigations Risks Mitigations

1 Shortage of critical material Engage with Suppliers through SCM

2 Filling of new structures Reallocation of funding

3 Theft and vandalism of the network infrastructure and electricity

Expedite the AMI, AMR and protective structures projects


Final Page 13

1.6.3 Engineering Operations

Interventions o In order to address the shortage of Appointed Operators the policy document, governing

the training and authorisation of personnel, has recently been updated and amended. The revised policy document contains proposals to review the allowances paid to Authorised Operators and it is anticipated that this will attract additional candidates for training and final authorisation

o In support of the company‟s initiative to contain unnecessary expenditure, measures to improve management of Opex spending, particularly in the Salary and Allowances category have been introduced and the results to date have been positive.

o It has been recognised that there is an urgent need to substantially improve the process of plant condition monitoring to identify potential failures modes and take corrective action prior to actual plant breakdowns. As a result a new independent section has been formed to undertake this function. The responsibility to inspect and condition monitor the electrical infrastructure will now fall within the ambit of the Engineering Services Group.

Achievements o As part of the on-going Service Improvement Initiative the Operation‟s Group has

undertaken extensive spotting and repair of street lights along the identified main arterial routes and this has proved very successful. In addition, various types of test instruments, to detect early signs of equipment breakdown, have been purchased and successfully utilised as part of the preventative maintenance strategy. This success will be continued by the newly formulated Plant Condition Monitoring Department.

o The number of HV NPR outages has reduced and is well within the upper limits set in terms of the company compact.

o There has been a general improvement in employee safety standards and no serious or fatal incidents have been reported. Several depots have achieved notable injury free man hour milestones.

Challenges o The incidence of theft and vandalism of the infrastructure continues, which has serious

financial and outage compliance implications. In addition, this has a detrimental and demoralising effect on staff who are continually called upon to repair or replace repeatedly stolen or damaged infrastructure. In this regard City Power has initiated a phased approach for the installation of modern security measures at its installations. City Power is also investigating other security measures to secure its underground cables and overhead systems.

o There have been an unacceptable number of MV outages which have exceeded the target set for the period. Severe and unpredictable weather conditions have largely contributed to the increase in the number of MV outages. The increase in MV outages is also indicative of an ageing network and it is anticipated that the newly formed Plant Condition Monitoring department will contribute significantly to detecting possible plant failures and actioning appropriate remedial action, before actual outages occur. In addition, City Power is creating a database of approved jointers to improve and control quality. Going forward, capital funding must be identified to replace and upgrade ageing infrastructure.


Final Page 14

o According to the New SLA sign between COJ and City Power a target of 2 days has been set in the current company‟s performance compact for the resolution of street light related complaints. This target is substantially lower than previously and the attainment of this will be challenging. Following the restructure, the challenges surrounding the quick resolution of street lighting complaints will be reviewed and the processes improved.

Trends o The on-going prevalence of infrastructure theft and vandalism continues and this

results in unplanned outages, customer dissatisfaction and unsustainable repair / replacement expenditure.

Risks and Mitigations o Overtime expenditure continues to be of concern. As electricity is an essential service,

City Power is allowed to exceed the 40 hour legislation limit to provide an acceptable service. However, an initiative to limit the amount of hours worked to align with the forty hours has now being introduced. This has resulted in certain operational difficulties and solutions to these issues must be identified and agreed with management and labour. One such solution is the proposal to introduce a limited shift system and this is presently being negotiated with the relevant parties.

o There is an urgent need to replace obsolete low voltage overhead mains with modern Aerial Bundled Conductor (ABC) to reduce the number of outages associated with this poorly performing infrastructure. Several projects to begin the phased replacement of these old networks have been included in the Capital Budget program.

Risks Mitigations

1 Overtime Expenditure Cap overtime to align with labour legislation and to ensure the wellbeing of our staff. Initiate a process to introduce shift system. The major overtime expenditure is in attending to „No-light‟ complaints, after hours - if our staff do not undertake this work we will use contractors at a higher cost

2 Infrastructure theft and Vandalism

Phased installation of modern security systems

3 Public Lighting resolution times

More resources allocated to attend to complaints and performance monitored to identify problems in dispatching process

4 Obsolete low voltage overhead mains

Phased replacement program to install ABC

1.6.4 Human Resources

Achievements o As part of the City Power institutional renewal project and the new Board approved

structure, a new training department called the Learning Academy was created on 1 December 2012. The purposes of this department are to co-ordinate and administer technical and non-technical training in line with City Power requirements. This will result in a centralised, co-ordinated and structured training function which will enable the Company to control the awarding of funds in a more manageable way

o City Power has been accredited by EWSETA to perform Cable Jointing training. This is part of the bigger plan. With full accreditation, City Power will be able to render training services to the private and public sectors and generate income

o Parties to the Local Labour Forum have revised the current Rules of Engagement which manages the relationship between the parties


Final Page 15

o People with disabilities are currently at 3% of the total staff complement

Challenges Challenges Interventions

1 No workforce planning in place Human Resources to implement a workforce plan to enable the demand and supply projections for core , critical and scarce segments and the organisation as a whole by June 2013

2 Skills competencies are not clearly defined in terms of the different occupational categories

A competency dictionary was developed and approved by EXCO to ensure alignment

3 The current HR structure does not support the vision of the business

Human Resources has developed a new structure that will support the vision of the business. The final approval is envisaged by no later than the end of February 2013

Risks and Mitigations Risks Mitigations

1 Excessive overtime spend Strict controls have been put in place to curb overtime expenditure

2 Non-payment of the 50th percentile for

grades 13 and above The matter is currently being discussed at the Local Labour Forum level

3 Non-payment of gratuity / performance bonus for certain categories of employees which may lead to a dispute being declared at the CCMA

Human Resources is in the process of consulting Legal Services on the handling of the matter and will make recommendations to EXCO

1.6.5 Finance

Achievements o Board approval of the zero based budgeting approach for City Power o Training of cost centre owners on zero based budgeting principles o 2011/12 FY asset register has been updated o Enhanced reporting format for financial performance o The creation of a Reverse Logistics plant in SAP has enabled the complete separation

of usable stock from unusable stock.

Challenges Interventions

1 Finalisation of asset register on SAP The reconciliation of the asset register is in progress.

2 Inability to fill vacancies Interviews are held currently to ensure that all critical vacancies are filled by the financial year end.

3 Poor availability of materials; particularly luminaires.

Weekly reporting. In the process of transferring responsibility for call-off purchase orders to Inventory Management.

4 SAP MM is not designed to maintain a unique value for each inventory item.

Development of a solution is in process.

5 The in-house manufacturing solution has resulted in incorrect stock valuations.

The cause is being investigated.


Final Page 16

1.6.6 Risk, Assurance and Compliance

Interventions o Development of an Integrated SHEQ Management System which includes the current

accreditation and the following: SANS 16001:2007 (Health Management System) ISO 31000 (Integrated Risk Management System) ISO 22000 (Food Safety and Hygiene Standards)

o Development and implementation of data governance policies, standards and procedures for customer, employee, network and regulatory data domains

o Development and implementation of a Customer Data completeness project (data collection and verification of all stands serviced by City Power)

o Initiating an enterprise wide data clean-up o Development and implementation of a security strategy and system to combat theft

and vandalism o Development and implementation of a comprehensive employee wellness program

Achievements

o City Power was the winner of the SABS President‟s Award for 2012

o Maintained ISO 14001:2004 and OHSAS 18001:2007 certification during the surveillance audit November 2012

o Successful hosting of World Aid Days and 16 Days of Gender Based Violence Commemoration

o Received Waste licenses for rubble waste collection and disposal, for three City Power Trucks

o Maintaining DIFR below threshold of 1 (actual 0.45)

o Established a Data Governance and Compliance department

o Established a collaboration committee with CoJ to resolve data issues relating to billing, meter installation and maintenance

o Completed the initial desktop analysis of 498 314 records to resolve AG findings relating to customer data completeness and services provided

392 134 resolved with desktop analysis

106 180 scheduled for physical site audits

14429 properties physically audited from mid-September to December as part of the data completeness project

Challenges

o Maintaining the ISO Certificates (9001, 14001, 18001) and accreditation

o Review and monitor Disaster Management and develop Business Continuity Plan/s

o Opportunistic diseases for HIV positive clients

o Lack of understanding by business stakeholders of importance of data governance o Refused entry to properties and non-disclosure of data by customers o There is a lack of understanding by business stakeholders of the importance of data

governance due to the decentralised ownership and usage of data. City Power has thus resolved to have a centralised data management and governance environment that will allow data to be centrally governed and provide a single view of data.


Final Page 17

o Due to both safety concerns on the customers‟ part and malicious acts like theft of electricity by customers; customers tend to refuse entry to properties and to disclosure of data. City Power has endeavoured and continues to explain the benefits of providing the required data and the dangers of electricity theft (illegal connections) to customers.

Trends o General continual improvement in SHEQ culture, due to the implementation of

Behaviour Based Safety (BBS) (last employee fatalities was in 2009)

1.6.7 Office of the MD

Interventions o Implemented the business model review project

Achievements o Operationalisation of the Board approved structure o Finalisation of the Annual Report (AR)

Risks and mitigations Challenges Interventions

1 Maintaining a positive company image

Implementation of the STEP program to improve service delivery Improve relations with the media and other stakeholders


Final Page 18

2 SERVICE DELIVERY MONITORING

2.1 City Power GDS and IDP Scorecard with Key Performance Areas and

Indicators Table 2.1: City Power GDS and IDP Scorecard and Mayoral Flagship Programmes and Enablers

Key Performance Area

Key Performance Indicator

Unit

Baseline Total Target Quarter 1 Quarter 2 YTD

2011/12 Actual

Target Target Actual Target Actual Target Actual

Improve Network Performance

and Quality Of Supply

CAIDI Minutes 368.75 140 140

240.3 140 234.37 140 237.07

CAIFI Number 0.08 1.4 1.4 0.09 1.4 0.06 1.4 0.07

SAIDI Minutes 94.98 110 27.5

255.91 50 312.29 50 568

SAIFI Number 0.26 2 0.5 1 1 1.33 1 2.4

Planned: Unplanned

Maintenance Ratio 62:38 70:30 70:30

57:43

70:30 49:51 70:30 48:52

NRS 047: Compliance: % Customer Restored within:

1.5 Hours

%

30.51 30 30

31.5 30 30 30 30.6

3.5 Hours 73.58 60 60

67.5 60 75.3 60 71.9

7.5 Hours 90.96 90 90

87.3 90 86.6 90 86.9

24 Hours 98.85 98 98

99.2 98 99.1 98 99.2

NRS 048 Compliance

97 100 100 98 100 100 100 100

Refurbishment of Aging Network

Average age of infrastructure

Years 55 53 45 39 39 39 39 39

Expansion and Strengthening of

Network

Additional Capacity

MW 40 90 0 0 0 0 0 0

Provision of public lights

Number 5164 4200 1000 620 1000 1344 2000 1964

Revenue Step Change: Improve Financial

Sustainability

Payment Levels % 92 94 92 83.29 94 96.5 94 87.5

Meters installed Number New 20000 100 132 1500 1925 3000 2057

Meter Reading % 98 98 98 76 96 81. 96 81

Reduction of Area Debt Book

% 20 50 50 -47 50 0 50 0

Technical Losses % 9 9 9 9 9 9 9 9

Nontechnical Losses

% 8.21 5 2.72 11.42 11.4 16.58 3 13.76

FBE Maximum

KWh/ Household

150 150 150 150 150 150 150 150

Demand Side Management :

Reduce Carbon Emissions

Number of Solar Heaters installed

Number New 20000

3000 7200 8000 15510 11000 22710

After Diversity Maximum

Demand (ADMD) Kva New 0.12 0.12 0.12 0.12 0.12 0.12 0.12

Energy Mix % New 0 0 0 1.5 1.5 1.5 1.5

Energy Efficiency % New 2.3 0 0 0 0 0 0

Improve Customer Centricity

EPWP Number 2333 3000 625 598 875 937 1500 1535

Electrification Number 5610 3200 750 1374 250 158 1000 1532

Customer Satisfaction

% 65 70 70 65 70 0 70 0

Affirmative Action (Supervisory level

and above) % 79.23 83 83 79.47 83 79.61 83 79.54


Final Page 19



Unit

Baseline Total Target Quarter 1 Quarter 2 YTD

2011/12 Actual

Target Target Actual Target Actual Target Actual

Gender Equity (ALL)

% 20.91 24 21 22.85 22 22.9 22 22.9

People with Disability

% 2.9 2.2 2.2 2.99 2.2 3 2.2 3

Continuous improvement of

the Business

DIFR % 0.51 1 0.5 0.54 0.5 0.54 1 0.54

ISO Accreditation Unqualified

Audit Qualified

Audit Unqualified

Audit Unqualified

Audit Unqualified

Audit Unqualified

Audit Unqualified

Audit Unqualified

Audit Unqualified

Audit

Attainment of an Unqualified Audit

Unqualified Audit

Qualified Audit

Unqualified Audit

Unqualified Audit

Qualified Audit

Unqualified Audit

Qualified Audit

Unqualified Audit

Qualified Audit

2.2 City Power Balanced Scorecard with Key Performance Areas and Indicators

Figure 2.1 below depicts the company‟s Strategy Map:


Final Page 20

2.2.1 Financial Perspective

City Power has not done well from a financial perspective and has put interventions in place to ensure improvement going forward these include:

Non-technical losses are 13.76%; initiatives to reduce losses are continuously actioned which include:

o Billing completeness monitoring has begun and City Power is tracking unbilled accounts and ensuring that they are linked on the system.

o Replacement of faulty prepaid meters and installation of protective structures and RATS. Replaced meters are to be commissioned in the 3rd quarter.

o Plans to install smart meters are being developed and the roll-out is expected to start during the 3rd quarter.

Payment levels are below target; target is 92% vs. actual 87.56%. To improve this situation, City Power is analysing the debt into „collectable‟, „pending investigation‟ and „possible write-off‟. The analysis will be segmented into customer categories and priority will be given to managed accounts (key accounts, government accounts and corporate accounts) and accounts over 90 days

Value Propositions



Unit 2011/12 Actual

Quarter 1 Quarter 2 Year to Date

Target Actual Target Actual Target Actual

Sustainable Revenue Growth/ Low Operating Costs

Effective Financial Management

Net Profit R‟000 1,413,626 187,416 225,375 562,182 457,398 749,598 682,773

Gross Margin % 36.22 21.19 23.93 38.82 42.67 28.96 31.88

Revenue Improvement

Total Losses % 19.31 11.72 20.42 15.79 25.58 15.79 22.76

Technical Losses

% 9.00 9.00 9.00 9.00 9.00 9.00 9.00

Non - Technical Losses

% 10.31 2.72 11.42 11.8 16.58 3.0 13.76

Sustainable Cash Flow


Net Cash Flow Position

R‟000 1,191 1,980 914 2,042 1,495 2,042 1,495

Improve Revenue Collection

Revenue Improvement

Payment Levels – All Customers

% 92.37 92.00 80.92 92.00 96.52 92.00 87.54

Reduction of arrear debt

% New 45.00 0 45.00 0 45.00 0


Final Page 21

2.2.2 Customer Perspective

City Power has mixed performance in this perspective and has put interventions in place to ensure improvement going forward these include:

Query resolution year to date is 65% as compared to the 95% but should be noted that it‟s a consolidated report for all MOE‟s. A request for only electricity related queries has been forwarded to R&CRM.

Value Propositions



Unit

2011/12 Actual



Quality Service Experience

Customer satisfaction and responsiveness

Customer Satisfaction Index Consolidated Customers

% 65.00 65.00 0 65.00 0 65.00 0

Quality Service Experience/ Governance

Regulatory Compliance (NERSA) NRS 047 (Quality of Service)

CAIDI Minutes 368.73 140.00 240.30 140.00 234.38 140.00 237.07

CAIFI Number 0.08 1.40 0.09 1.40 0.06 1.40 0.07

SAIDI Minutes 94.98 27.50 255.91 27.50 312 27.50 568

SAIFI Number 0.26 0.50 1.06 0.50 1.33 0.50 2.4

Faults restoration within the specified time frame a percentage of total number of faults reported

Within 1.5 Hrs % 30.51 30.00 31.55 30.00 29.8 30.00 30.6

Within 3.5 Hrs % 73.58 60.00 67.54 60.00 75.3 60.00 71.9

Within 7.5 Hrs % 91.96 90.00 87.34 90.00 86.6 90.00 86.9

Within 24 Hrs % 98.85 98.00 99.20 98.00 99.1 98.00 99.2

High Product Availability/ Service Delivery/ shift to low carbon infrastructure

Regulatory Compliance (NERSA) NRS 048 (Quality of Supply)

Average age of the network

Years New 45 39 39 39 39 39

Quality Service Experience

Customer satisfaction and responsiveness

Meter reading performance

% New 95.00 75.65 95.00 81.0 95.00 81.0

Socio Economic Development

Economic Development & Job Creation

FBE kWh/

household

150 150 150 150 150 150 150

High Product Availability/ Service Delivery/ shift to low carbon infrastructure

Regulatory Compliance NRS 048 (Quality of Supply)

After Diversity Maximum Demand (ADMD)

kVA 0.12 0.12 0.12 0.12 0.12 0.12 0.12

Energy Mix % New 0 0 1.5 1.5 1.5 1.5

Energy Efficiency MW New 2.3 0 0 0 0 0

Positive Company Reputation

Health and Safety

Public Fatalities: Controllable

Number 1 0 0 0 0 0 0

Public Fatalities: Uncontrollable

Number 1 0 2 0 1 0 3

Governance Health and Safety

Employee job related fatalities

Number 3 0 0 0 0 0 0

Socio Economic Development

Economic Development & Job Creation

Job opportunities created as per EPWP policy: Temporary jobs.

Number 2,333 625 598 875 937 1500 1535

Socio Economic Development/ shift to low carbon infrastructure

Households with at least basic services

Number of new electrification customers

Number 5,610 750 1374 250 158 1000 1,532

Improve Public Lighting

Provision of new Public lights in the formal Areas and Informal Areas

Number 5,164 1,000 620 1,000 1344 2000 1964


Final Page 22

SLA has been finalised, Retail Services is working with R&CRM in ensuring that certain KPI‟s that are currently not reported on are developed and implemented.

Stakeholder Management department within Retail Services monitors the stakeholder relations and service delivery while ensuring compliance to governance.

The six month network performance indices (SAIDI, CAIDI, SAIFI, SAIDI) show that City Power has not met all the set targets. The original network performance indices were based on North American standards, which were the only standards available at the time. Experience has shown that this is not suited to a South African climate. City Power is currently busy with a study to determine more appropriate indices. Additionally, severe and unpredictable weather conditions added to the number of unplanned outages and hence affected the indices negatively.

Below are three public fatalities that happened in the last quarter.

Date of Incident

Area where incident occurred

Name of Deceased

person Description of incident

Controllable/ Uncontrollable

17-Sep-12 Roodetown - Roodepoort

Unknown male Theft and vandalism Uncontrollable

17-Sep-12 Prichard Street S/S JHB Town

Male A contractor fell from a height whilst removing a transformer at the substation

Uncontrollable – pending investigation

27-Dec-12 M10 Road and Volta Street in Lenasia

Unknown female

Electrocution due to illegal connections, connected to Post Office lines and leading to an informal settlement.

Uncontrollable


Final Page 23

2.2.3 Internal Perspective

The month of December 2012 was averaged for the following KPIs:

Total number of calls answered in 30 seconds as a percentage of calls received

Number of customer complaints/queries resolved per total queries received SAP CRM

Average time taken for City Power to resolve queries that are referred to them that require investigation

Value Propositions



Unit

2011/12 Actual



Service Delivery Improve Public Lighting Maintenance of Public lights % 98.00 85.00 94.99 85.00 91.2 85.00 87.5

Service Delivery/ Governance

Regulatory Compliance (NERSA) NRS 047 (Quality of Service)

% planned: unplanned maintenance

Index 62.00 70.00 56.62 70.00 49.2 70.00 48.2

Total number of calls answered in 30 seconds as a percentage of calls received

% 50.90 80.00 65.45 80.00 74.27* 80.00 69.79

Number of customer complaints/queries resolved per total queries received SAP CRM

% 98.00 90.00 60.01 90.00 59.33* 90.00 61.49

Average time taken for City Power to resolve queries that are referred to them that require investigations

days 0.00 10.00 1.12 10.00 -0.08* 10.00 0.39

Regulatory Compliance (NERSA) NRS 048 (Quality of Supply)

NRS 048 Compliance – Category 4 - Domestic

% 100.00 98.00 100.00 98.00 0.00 98.00 100.00

NRS 048 Compliance - Category 3 - Rural

% 100.00 98.00 96.60 98.00 0.00 98.00 96.60

NRS 048 Compliance - Category 2 - Industrial

% 100.00 98.00 100.00 98.00 0.00 98.00 100.00

Internal Service Improve Information Technology Management

Information systems Network availability

% 94.00 97 98.00 97 99.05 97 98.53

Information systems Applications availability

% 98.00 97 99.00 97 99.09 97 99.05

Internal Service Improve Information Technology Management

Data Recovery at PC level % 100.00 96.99 100.00 96.99 100.00 96.99 100.00

Data Recovery at Application (server) level

% 100.00 96.99 100.00 96.99 100.00 96.99 100.00

Business Performance


Attainment of unqualified audit report

Index Qualified

audit report

Unqualified audit report

(Full Compliance)

Qualified audit

report


(Full Compliance)

Qualified audit

report


(Full Compliance)

Qualified audit report

Governance BEE and Engendered Companies empowerment

Procurement spend from all suppliers

% New 140.00 148.65 140.00 145.86 140.00 148.10

Procurement spend from QSE‟s or EME‟s

% New 4.00 3.67 4.00 12.27 4.00 5.38

Procurement spend from suppliers that are 50% black owned

% New 5.00 4.19 5.00 13.07 5.00 5.95

Environment

Procurement spend from suppliers that are 30% black women owned

% New 2.00 2.04 2.00 2.50 2.00 2.13

ISO Management System Compliance – SHEQ

Index 6.00 2.00 2.00 2.00 1.50 2.00 3.50


Final Page 24

The table above illustrates that City Power has mixed performance in this perspective and has put interventions in place to ensure improvement going forward, these include:

To date 2057 meters have been installed compared to the target of 3000, the variance of 31% is as a result of delays in the delivery of the meters however engagements have been strengthened through SCM to ensure timeous delivery of the equipment.

To date 22710 units of SWH have been installed compared to a target of 11000 units.

It has been recognised that there is an urgent need to substantially improve the process of plant condition monitoring to identify potential failure modes and to take corrective action prior to actual plant breakdowns, thus improving network performance including the planned: unplanned KPI. As a result, a new independent section has been formed to undertake this function. The responsibility to inspect and condition monitor the electrical infrastructure will now fall within the ambit of the Engineering Services Group.

2.2.4 Learning and growth Perspective

Value Propositions



Unit 2011/12 Actual



Optimal Human Capital Utilisation

Effective Human Resources Management

Percentage (%) of total grants received back from EW-Seta

% 74.00 55.00 0.00 55.00 0.00 55.00 0.00

Total number of performance scores based on performance discussions submitted as a percentage of total staff complement

% 79.48 80.00 80 80.00 80 80.00 80

Signed compacts in place as a percentage of total complement

%

95.00 85.00 0.00 85.00 0.00 85.00 0.00

Number of voluntary scarce / critical skills separations as a percentage (%) of total number of separations

% 47.05 44.00 0.00 44.00 0.00 44.00 0.00

Service Delivery

Effective Human Resources Management

Loss time rate: Number of all leave days taken excluding annual leave x 100 Total work days

% 3.30 2.20 3.68 2.20 2.80 2.20 3.24

Individual absenteeism frequency rate: Number of absences (Average number of employees x Annual Individual Working Days) x100

% 10.14 2.00 8.53 2.00 36.45 2.00 10.34

Disabling Injury Frequency Ratio (DIFR)

Ratio 0.51 1 0.50 0.50 0.54 0.50 0.54

Governance Human Resources Development

Affirmative Action (Supervisory level and above) % 79.23 83 79.47 83 79.61 83 79.54

Employment Equity (Gender Equity Ratio)

% 20.91 22.00 22.85 22.00 22.90 22.00 22.90

% of People/ Employees with Disabilities

% 2.89 2.00 2.99 2.00 3.00 2.00 3.00

Number of tasks undertaken to comply with CoJ environmental management framework

Number

0.00 0.00 0.00 0.00 0.00 0.00 0.00

Socio-economic Development

Health and Safety HIV/Aids workplace

interventions executed and achieved the stated results

Number of

Projects

1 Program + 9 Projects

1 Program

+ 7 Projects

2 Projects – HV + Cancer

Screening

1 Program + 2 Projects

3 Projects

1 Program

+ 4 Projects

5 Projects


Final Page 25

City Power has an internal KPI for AA for supervisory and above level, with an actual of 79.54. While when the entire staff compliment is taken into account the actual is 88.82%

HIV/Aids workplace interventions executed and achieved the stated results. Integrated wellness strategy which incorporates programs like Wellness Days, Employee Assistance Programs, awareness campaigns, HIV/AIDS education and awareness etc.

City Power has submitted all the required documents to EWSETA but has not receive any rebates to date

The organisation is currently reviewing and benchmarking the absenteeism KPIs and targets to align with national norms and standards

In the last 6 months City Power had only 3 resignations of which none were scares and critical skills. This means the organisations retention strategy is still effective


Final Page 26

3 PROJECT/INFRASTRUCTURE REPORT

3.1 Analysis of the Master Capital Programme

The original approved City Power Capital budget for the 2012/13 financial year is R 953 million. The Capital budget comprises of the controllable component which is inclusive of R 399 million worth of loans, R 258 million DSM funding, R 32 million Engineering Services contribution, R 134 million grant funding as well as R 5 million “ Adopt a Light” funding while the non-controllable component is made up of Public Contributions. The second quarter and the year to date expenditure is as shown on the table below: 3.2 Capital Expenditure Details The expenditure for the second quarter amounted to R145 million compared to the quarterly budget of R 287 million which is R 142 million below the quarterly budget. Although the year to date actual expenditure amounted to R 256 million compared to the year to date budget of R 390 million which reflects 34% below the budget, the total year to date expenditure including commitments is R 534 million. This shows that the overall capital expenditure is ahead of the budgeted amount and therefore no risks of under-spending at the end of the financial year exist. Table: A

Project Detail (By Project)

Budget for Quarter 2

Actual for Quarter 2

Var for the Quarter

Total Budget for

the year

YTD budget YTD Actual Total YTD actual &

Commitment

YTD Variance

R’ ( A) R’ (B) R’ (C) R’ ( D) R’ ( E) R’ ( F ) R’ ( G ) R’ ( E – G )

Electrification 11,600,000 4,793,491 6,806,509 54,349,000 17,951,000 4,793,491 7,468,829 10,482,171

Service Connections 37,768,000 13,223,571 24,544,429 125,065,000 54,568,000 29,084,706 33,598,721 20,969,279

Township Reticulation 1,061,656 -1,061,656 0 0 1,480,655 1,534,358 -1,534,358

Upgrading of Electrical Network 16,090,000 17,287,879 -1,197,879 90,000,000 30,630,000 35,142,092 88,258,667 -57,628,667

Network Development 4,480,000 1,040,240 3,439,760 18,000,000 5,880,000 1,040,240 1,456,055 4,423,945

Building Alterations/ Construction 377,000 0 377,000 2,211,480 679,000 156 21,156 657,844

Office Equipment/Computers 3,220,000 345,773 2,874,227 11,616,520 4,220,000 1,117,910 1,266,466 2,953,534

Computer Software 551,000 0 551,000 1,863,900 751,000 0 751,000

Tools and Loose Gear 1,510,000 563,409 946,591 2,941,000 1,940,000 1,310,516 3,429,340 -1,489,340

Plant and Machinery 13,123,000 7,977,190 5,145,810 31,347,052 18,623,000 8,245,380 20,322,265 -1,699,265

Meters and Load Man 148,568,000 68,242,066 80,325,934 425,000,000 171,318,000 132,516,541 285,676,367 -114,358,367

Protection 5,264,000 2,393,381 2,870,619 12,700,000 6,464,000 3,328,255 8,748,457 -2,284,457

Furniture 400,000 29,277 370,723 1,043,100 475,000 30,227 480,079 -5,079

Public Lighting 22,994,000 18,873,453 4,120,547 99,886,000 38,644,000 23,628,065 45,049,763 -6,405,763

Refurbish of Bulk Infrastructure 21,190,000 7,970,887 13,219,113 76,876,948 37,490,000 13,032,579 30,332,939 7,157,061

Insurance 833,052 -833,052 0 0 1,073,607 6,404,667 -6,404,667

TOTAL 287,135,000 144,635,327 142,499,674 952,900,000 389,633,000 255,824,421 534,048,130 -144,415,130


Final Page 27

3.2.1. CONTROLLABLE CAPEX The expenditure for the second quarter on Controllable capital projects, which are projects funded from CoJ loans, DSM levy, Grant funding and Adopt a light funding amounted to R 128 million compared to the budget of R 247 million which is R 119 million below the target. The year to date expenditure amounted to R 221 million compared to the budget of R 335 million which reflects a negative variance of R 114 million. Although the expenditure is behind the budget, the total year to date actual expenditure including commitments amounted to R 490 which is 46% ahead of the year to date budget.

Table: B

( Contrallables) Project Detail (By Project)

Budget for Quarter 2


Var for the Quarter

Total Budget for

the year

YTD budget

YTD Actual Total YTD actual & Committ

YTD Variance


Electrification 11,600,000 4,793,491 6,806,509 54,349,000 17,951,000 4,793,491 7,468,829 10,482,171

Public Lighting 22,994,000 18,203,236 4,790,764 99,886,000 38,644,000 22,563,563 43,985,261 -5,341,261

Electrical Infrastructure 166,888,000 84,368,031 82,519,969 518,552,672 204,828,000 164,911,940 370,759,554 -165,931,554

Power Systems 5,264,000 3,433,622 1,830,378 17,700,000 9,464,000 5,358,275 11,565,930 -2,101,930

Other Capex & asset purchases 19,181,000 8,915,651 10,265,349 51,023,052 26,688,000 10,704,189 25,519,307 1,168,693

Refurbish of Bulk Infrastructure 21,190,000 7,970,887 13,219,113 86,324,376 37,490,000 13,032,579 30,332,939 7,157,061

TOTAL 247,117,000 127,684,918 119,432,082 827,835,100 335,065,000 221,364,037 489,631,819 -154,566,819

ELECTRICAL INFRASTRUCTURE Electrical infrastructure comprises of Upgrade of Electrical Networks, Network development, Meters and Load management. The second quarter expenditure amounted to R84 million which is R 82 million below the budget of R 166 million. The expenditure includes the Solar water heater installations, Metering projects and conversion of LV bare conductor to ABC. The year to date expenditure amounted to R 165 million compared to the year to date budget of R 204 million which is R 40 million below the year to date budget, the negative variance is as a result of the delays in the delivery of critical equipment however the commercial processes are being fast tracked to achieve the target in the third quarter. It should be noted that the total year to date actual expenditure including commitments amounted to R 370 million which is R 165 million ahead of the target. The full year budget will be spent by the end of the financial year. POWER SYSTEMS Power Systems comprises of Protection. The expenditure for the quarter amounted to R 3,4 million compared to the budget of R 5,2 million which is R 1,8 below the budget. The expenditure includes projects such as the 88 kV protection upgrade projects, Power factor correction at Orlando and Installation of new IED‟s in substations. The year to date expenditure amounted to R 5,4 million compared to the year to date budget of R 9,4 million which translates to under spending of R 4 million as a result of the delay in the delivery of critical equipment in the first quarter. It should be noted that the total year to date actual expenditure including commitments amounted to R 11 million which is R 2 million ahead of the target. The full year budget will be spent by the end of the financial year.


Final Page 28

PUBLIC LIGHTING The expenditure for the quarter amounted to R 18 million compared to the quarterly budget of R 23 million. The year to date budget amounted to R 23 million compared to the year to date budget of R 39 million. The negative variance is as a result of the late start of the program. ELECTRIFICATION The expenditure for the second quarter amounted to R 5 million compared to the quarterly budget of R12 million. The year to date expenditure amounted to R 5 million compared to the year to date budget of R 18 million. The negative variance is as a result of the late start of the program, however the program is being fast tracked and the improvement will be realized in the next quarter. The full year budget will be spent by the end of the financial year. BULK INFRASTRUCTURE The expenditure for the second quarter amounted to R 8 million compared to the quarterly budget of R 21 million. The expenditure includes projects such as Sebenza, Transformer program, Upgrade of Kelvin - Cydna substations. The year to date expenditure amounted to R 13 million compared to the year to date budget of R 37 million which reflects a negative variance of R 24 million as a result of delays in the commercial processes of major projects, however the program has since been fast tracked and the expenditure will be realized in the next quarter. The full year budget will be spent by the end of the financial year.

3.2.2. NON CONTROLLABLE CAPEX The non-controllable capital projects are projects which are funded by public contributions. The expenditure for the quarter amounted to R17 million compared to the quarterly budget of R 38 million. The year to date expenditure amounted to R 34 million compared to the year to date budget of R 55 million and this reflects a negative variance of R 21 million as a result of low levels of service connection applications. Table: C

(Non - Contrallables) Project Detail (By Project)

Budget for

Quarter 2


Var for the Quarter

Total Budget for

the year

YTD budget

YTD Actual

Total YTD actual & Committ

YTD Variance


Public Lighting 0 670,216 -670,216 0 0 1,064,503 1,064,503 -1,064,503

Electrical Infrastructure 0 1,161,914 -1,161,914 0 0 1,756,914 1,814,063 -1,814,063

Service Connections 37,768,000 13,223,571 24,544,429 125,065,000 54,568,000 29,084,706 33,598,721 20,969,279

Township Reticulation 0 1,061,656 -1,061,656 0 0 1,480,655 1,534,358 -1,534,358

Insurance 833,052 -833,052 1,073,607 6,404,667 -6,404,667

TOTAL 37,768,000 16,950,409 20,817,591 125,065,000 54,568,000 34,460,385 44,416,311 10,151,689


Final Page 29

PUBLIC LIGHTING The year to date expenditure amounted to R 1 million which is as a result of funds received from developers for service connections. ELECTRICAL INFRASTRUCTURE The year to date expenditure amounted to R 1,8 million which is as a result of funds received from developers. SERVICE CONNECTION The year to date expenditure amounted to R 29 million compared to the budget of R 55 million. The funds are received from the public for service connections. INSURANCE The year to date expenditure amounted to R 1 million, these are projects funded through insurance claims.

3.3 Funding claims

Project Detail (By Project) Quarter 1 Quarter 2 TOTAL

R'000 R'000 R'000

Building alterations loans 156 0 156

Furniture loans 950 29,277 30,227

Load management loans 25,971,099 25,971,099

Meters loans 6,935,420 6,935,420

Office equipment loans 343,703 345,774 689,477

Plant and machinery loans 7,977,190 7,977,190

Protection loans 934,874 2,393,381 3,328,255

Refurbish of bulk infrastructure - loans 4,759,453 7,298,500 12,057,953

Tools and loose gear loans 693,030 563,409 1,256,439

Upgrade of network loans 11,734,115 16,125,965 27,860,080

TOTAL 18,466,281 67,640,015 86,106,296

Capex claims are claims done on the loans granted by COJ to City Power as we spend on the loan funding. The year to date Capex claims amounted to R 86 million.

3.4 Funding Source

Details (CMIP/CLF)

Original Budget ( R‟000)

Proposed Revised Budget ( R‟000)

Actual ( R‟000)

Loans 399,100 644,940 154,804

CRR and cash 258,000 192,397 37,486

National Grant 53,735 133,735 23,646

Public contributions & other

242,065 127,000 39,888

TOTAL 952,900 1,098,072 255,824


Final Page 30

4 HUMAN RESOURCES

4.1 Staff Complement

Occupational Levels Male Female Foreign Nationals

Total A C I W A C I W Male Female

Top management 1 0 0 1 1 0 0 0 0 0 3

Senior management 12 1 2 4 3 0 0 1 0 0 23

Professionally qualified and experienced specialists and mid-management

125 5 5 68 107 1 1 7 0 0 319

Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents

342 37 8 105 123 9 3 32 0 0 659

Semi-skilled and discretionary decision making

508 8 0 5 33 2 0 1 0 0 557

Unskilled and defined decision making

16 0 0 0 47 2 0 0 0 0 65

TOTAL PERMANENT 1004 51 15 183 314 14 4 41 0 0 1626

Temporary employees 5 1 0 0 1 0 0 0 0 0 7

GRAND TOTAL 1009 52 15 183 315 14 4 41 0 0 1633

4.2 Staff movements

Table below shows Staff Movements (1 July 2012 to 31 December 2012) Staff

Movements African Coloured Indian Whites

Male Female Male Female Male Female Male Female

Appointments 5 2 0 0 0 0 0 0

Recruitments 2 1 0 0 0 0 0 0

Resignations 2 0 0 0 1 0 0 0

Dismissals 0 0 0 0 0 0 0 0

Retirements 6 0 1 0 0 0 0 0

Death 6 0 0 0 0 0 0 0

Medical Boarding

1 0 0 0 0 0 0 0

Termination of Contract

0 0 0 0 0 0 0 1

Only three employees resigned from the Company‟s service during July 2012 to December

2012 The employee turnover rate (which is inclusive of resignations, dismissals, death etc) as at

the end of December 2012 is 1.10%

4.3 Employment Equity and affirmative action plans and programmes The EE Report for the period 01 July 2011 to 30 June 2012 has been deliberated upon and

duly signed off by all relevant stakeholders (interim committee made up of management and organised labour representatives)

The report will be submitted by the prescribed due date – 15 January 2013 The Employment Equity Plan that has been in place (2006 to 2011) has lapsed and the

committee has recognised the importance and urgency of developing a new EE Plan by the end of February 2013


Final Page 31

The company‟s affirmative action targets are : Affirmative Action = 74%; Gender Equity = 25% and People with Disabilities = 2%

The company honours the country calendar initiatives, sister company programmes etc, such as:

o Women‟s Day (9 August) o 16 Days of Gender Based Violence (25 November till 10 December) o The Office of the MD has seconded two HR employees to form part of CoJ

Gender Forum Committee. This Committee is currently operational o Reasonable accommodation initiatives

Table 10: Employment Equity – Proposed Targets By race

Categories Target - Male Target - Female Total

A C I W A C I W

Executives Directors 1 0 0 0 0 0 0 0 1

Directors 0 0 0 1 1 0 0 0 2

Deputy Director / General Managers

7 1 1 3 3 0 0 1 16

Assistant Directors/ Senior Managers

5 0 1 1 0 0 0 0 7

Professionals 51 3 5 38 65 1 0 5 168

Managers 27 2 0 22 11 0 1 2 65

Technicians 48 1 0 8 31 0 0 0 88

Operator 30 0 0 0 8 4 0 0 42

Semiskilled staff 824 45 8 110 149 7 3 33 1179

Other 16 0 0 0 47 2 0 0 65

4.4 Skills Development Plans

Five service providers were appointed during August 2012 for all mandatory training and apprenticeship training over a three year period ending 2015. This directly supports the ISO certification and re-certification and development of our core business units. The literacy and up skilling programmes are underpinned by interventions such as the Adult Education and Training (AET) and Matric Programmes

Present learning initiatives are pivotal programmes (educational assistance), structured workplace learning (occupational qualification), workplace integrated learning (experimental learners, hosted learners from DoL) and the promotion of learning through the attendance of conferences and seminars

We have Corporate Social Initiatives in place such as the Bursar Programme and Extended Public Works Programme (EPWP)

Promotion of learning and development is also supported by the provision of funding for travel and accommodation

Mandatory Training Providers: Contract Nr: Company Name: Services Contract Value Contract Period:

4600001484 The Business School Of South Africa

SHEQ Representative R 197,368.42

22/08/2012 To 14/08/2015 HIRAC

Hazmat

4600001485 Jct Training Consultants Cc

Signing And Barricading R 701,754.39

22/08/2012 To 14/08/2015

Overhead Crane (Full)

Overhead Crane (Recertification)

Rigging And Slinging (Full)

Rigging And Slinging (Recertification)

Scaffolding


Final Page 32

Contract Nr: Company Name: Services Contract Value Contract Period:

Stacking & Storing

Jack Hammer

Working At Heights

Working In Confined Spaces

4600001486 Tasa Training Services

Basic First Aid R 219,298.25

22/08/2012 To 14/08/2015

Fire Fighting

Forklift (Full)

Forklift (Recertification)

Operating Truck M/Crane (Full)

Operating Truck M/Crane (Recertification)

4600001487 Ugesi Training Cc

Ladder R 197,368.42

22/08/2012 To 14/08/2015

Battery

Low Voltage

4600001488 Industries Education

Electrical Trade Test Prep R 1,052,631.58

22/08/2012 To 14/08/2015

Electrical Trade Test

Electrical Learnership

Ntc Electrical Equivalence

Trade Electrician

4.5 Staff versus cost of staff to total Opex

Due to the non-filling of vacancies the % of Salary to Opex (Year to date actual) of 23.77%

is less budget and less than the CoJ percentage. However as City Power is in the process of restructuring additional positions will be filled, which will result in an increase in the percentage of salaries to Opex.

Table 11: Percentage of Salary to total Opex

Actual Budget Variance Actual Budget Variance Actual Budget Variance

Total Salary

Cost186,471 193,419 6,948 179,363 193,420 14,057 365,834 386,839 21,005

Total Opex 761,905 697,629 -64,276 777,397 692,243 -85,154 1,539,302 1,389,872 -149,430

% of Salary to

Opex24.47 27.73 3.25 23.07 27.94 4.87 23.77 27.83 4.07

Quarter 1 Quarter 2 YTD

R'000 R'000 R'000

4.6 Employees Wellness Programme Most of the employees on disease management therapy are compliant and progressing

well health wise During Wellness Open Day on the 20 September 2012 employees were screened for HIV

and the Employee Assistance Programme provided various educational and information stalls and talks about psychosocial related issues e.g. substance abuse, family and mental life etc.

On the 3 December 2012 a successful workshop on 16 Days of Gender Based Violence was conducted by the EAP unit, with approximately 400 employees in attendance. The purpose and aim of this campaign was to empower and impart knowledge to employees regarding the impact of violence perpetuated against women and children and challenge perpetrators of these offences to change their behaviour as well as to alleviate psychosocial problems experienced by some employees due to gender based violence which impact negatively in their execu

midyear report july to december 2012 final reports... · 2014. 9. 12. · city power midyear report...

Documents