Nage takes over as new chair of City Power

Lerato Nage has been appointed the new chair of Johannesburg’s power utility, City Power, after outgoing chair Lael Bethlehem opted to not reapply for the job.

Bethlehem made the announcement at the utility’s annual general meeting on Wednesday. Among other functions, Nage was board chair of City Power’s audit committee.

In her farewell address, Bethlehem painted a dire picture of City Power’s finances, which contribute a major chunk towards Johannesburg’s finances. The entity had not met its revenue targets and was no longer Johannesburg’s “cash cow”, she said.

Bethlehem said City Power’s cash coverage at the end of the 2017/2018 financial year was 33 days, as opposed to the three days’ cash coverage it had in 2016/2017.

The challenges faced by the entity include its financial sustainability and the city’s billing system, which she described as “unreliable and fragmented”.

It was “impossible to improve revenue or resolve queries until this [the billing system] was addressed”, she said. “All attempts to address this in a systematic and sustainable manner have been unsuccessful so far.”

Infrastructure was also a massive challenge, she said. The capital expenditure budgeting process was dysfunctional and made it difficult to manage infrastructure improvements or manage multiyear contracts.

Bethlehem said improvements have been made under new CEO Lerato Setshedi.

It is challenging being a board member of municipal entities because they operate under various types of legislation, she said. The entities are governed by the Companies Act, which assumes that boards are in full control of the company. But the Municipal Systems Act and the Municipal Finance Management Act make a different set of assumptions.

“It gets very difficult for the board to take the responsibility the Companies Act requires you to take when so much of the decision-making and the dayto-day management is in fact outside of the workings of the board,” Bethlehem said.

Consideration should be given to making the boards of municipal-owned entities advisory boards, she said.

IT IS IMPOSSIBLE TO IMPROVE REVENUE OR RESOLVE QUERIES UNTIL THE BILLING SYSTEM IS ADDRESSED