Power thieves lead to R90m BCM losses
THE scourge of electricity theft cost Buffalo City Metro R90.8-million in lost revenue in just six months.
The loss of income was recorded between January 2016 and June 2016 after the metro failed to put in place effective measures to decrease electricity losses as mandated by the National Energy Regulator of South Africa (Nersa).
The R90.8-million is part of a total of R162.1-million lost in 11 months in the 2015-16 financial year.
Acting head of infrastructure services Luyanda Mbula, in a report tabled before council last month, revealed that the metro’s single dedicated illegal services removal team did not have any impact on widespread illegal electricity connections across BCM.
The report comes as the local authority “declared war” on businesses enjoying free electricity usage through izinyoka or illegal connections.
Among those implicated are the Nahoon Arms Pub and Grub in Beach Road, the Abbotsford Arms Pub and Grub and Pedro’s Pizza in Abbotsford, after BCM electricity and energy services revenue-protection specialists discovered illegally connected wires during a raid, the Daily Dispatch reported in December.
The R90.8-million loss recorded in the first six months of last year is almost double the loss recorded in the six months prior to that.
The metro recorded R50-million in non-technical losses – such as illegal connections, meter tampering, etc – between July 2015 and January last year.
In the 11 months analysed in the 2015-16 financial year, the loss totalled 14.78% of total sales, which is above the Nersa limit.
“In terms of our Nersa electricity tariffs application, electricity losses must be between the range of 5% to 12% of total sales, failing which any request to increase electricity tariffs may be withheld, which will have a dire impact on future cash income and operational capacity for BCM,” Mbula said in the report.
Mbula said the numbers were not acceptable in terms of the applied Nersa standard of 9% and that BCM was at risk if additional resources were not provided to revenue-protection initiatives.
“The one dedicated illegal services removals team that is currently in place is having no impact on the state of illegally connected electricity connections throughout the metro.
“A further two teams of dedicated illegal electricity removals contract teams are required to augment internal staff, to have an impact on the rate that illegal connections are being connected back on to the electrical network,” Mbula said.
He said only six electricians were dedicated to removing illegal connections across the metro, and were supported by revenue-protection and law enforcement officers through a joint effort.
The metro’s infrastructure and engineering department portfolio head, Ncedo Kumbaca, said an investigation was under way and more businesses who had been using “free” electricity would be exposed. “We launched an investigation into these businesses recently and soon we will name and shame them.
“We are closing down on this syndicate that involves people from other provinces coming here and connecting izinyoka for business owners. There are a significant number of businesses who are linked to this crime.”
He said the metro was also accelerating the process of electrification of shacks and new RDP houses to prevent people stealing electricity.
However, the DA in the metro said the problem needed a longterm solution as there were more shacks mushrooming “everywhere”.
EFF councillor Chumani Matiwane said the party believed people should have access to electricity and refused to comment further.
According to BCM’s records, 49 people have died as a result of the deadly izinyoka wires since 2012.
East London Ratepayers’ Association secretary Christo Theart said izinyoka connections continued to be a problem that affected ratepayers indirectly. —