STATEMENT BY THE EXECUTIVE MAYOR OF THE CITY OF EKURHULENI ALD. NKOSINDIPHILE XHAKAZA ON THE STATE OF GOVERNANCE, POLITICAL STABILITY, AND THE CITY’S RECOVERY FROM THE R2BN REVENUE SHORTFALL
KEY HIGHLIGHTS:
• Political Stability: A new era of unified leadership following the ANC Regional Elective Conference, ending the risk of instability from two centres of power.
• Financial Turnaround: Cash on hand doubled, bank balance increased to over R1.1 billion, and the City’s credit rating has been improved.
• Tackling Revenue Shortall: Actively recovering a R2.1 billion energy revenue shortfall, with nearly R1.4 billion billed and over R365 million collected to date.
• Billing Accuracy Revolution: Automated meter reading accuracy has soared to an impressive 97%, a significant improvement from 84% when the function was taken over by ICT.
• Focus on Repairs and Maintenance: A R400 million budget increase for repairs and maintenance, bringing the total investment to R3.1 billion to fix potholes, streetlights, and water leaks.
• Restoring Service Delivery: Exceeding targets in providing electricity connections, rehabilitating major roads, and completing 90% of the first phase of the BRT system.
Members of the media,
MMC’s present,
The Acting City Manager,
Senior Management of the City,
And most importantly, the residents of Ekurhuleni,
Good morning.
Thank you for making the time to meet with us for this important engagement. Today, I want to speak to you with transparency about the state of our city’s governance, address a significant financial challenge we have been working to overcome, and share the tangible progress we are making in every corner of Ekurhuleni. We felt that it is important 2 that we reflect on the progress we have made over the past financial. Which is the first financial year, which this ANC-led cooperative government drafted and passed its own people centred and pro-poor budget. From the onset, our goal has been to build a city that is not only financially sound but is visibly and effectively working for all its residents.
POLITICAL STABILITY
I want to begin today by addressing the most critical enabler of progress in our city: political stability. Following the recent ANC Regional Conference, where I was entrusted with the additional responsibility of serving as the Regional Chairperson, we have ushered in a new era of unified and decisive leadership for Ekurhuleni.
This historic development resolves what potentially could have been a long-standing challenge of two centres of power within the ANC, a dynamic that has too often created political instability and threatened the continuity of governance. With the political and administrative leadership now fully aligned, the risk of paralysis or the premature removal of a mayor has been firmly addressed.
This new found stability is the bedrock upon which we can now build with confidence. It allows us to fully embody the theme of our administration: ‘A Responsive City Working with Agility to Restore Service Delivery to the People,’ This is the standard against which we measure our performance, and it is now backed by a solid political mandate.
REVENUE SHORTFALL
When this administration took office, we inherited a substantial and complex challenge within our Energy meter management, a historical revenue shortfall amounting to approximately approx. R2.1 billion. This was as a result of mismanagement, stemming from inaccuracies and gaps in the meter reading and billing environment that had occurred from the abrupt takeover of the function by the ICT Department.
We did not shy away from this problem. We confronted it head-on. We immediately implemented a comprehensive, three-pronged turnaround strategy focused on: integrity, accountability, and recovery.
I am pleased to report that this strategy is yielding significant results.
First, we tackled the root cause by focusing on the integrity of our billing system. Through significant investment in our systems, and returning the function to its parent Department, our automated meter reading accuracy now stands at an impressive 97%, compared to the 84% when the function was taken over by ICT. This is a critical 3 achievement. It means residents can have confidence that their meters are being read correctly, billed accurately and fairly for the services they use.
Second, we instituted decisive consequence management, which resulted in the suspension of the CIO and there is currently an ongoing disciplinary hearing taking place. We also launched a robust back-billing program to ensure accountability and to recover the funds rightfully owed to the City.
Third, and most critically, we are focused on recovery. We are turning these bills into collected revenue that can be ploughed back into service delivery. So far, we have collected over R365 million from these historical accounts. Out of a total identified value of approx. R2.1 billion, we have to date successfully billed nearly R1.4 billion. There is a further R761 million that is in the process of being billed, following the necessary dispute and agreement period afforded to customers. Our momentum is growing, we will now aggressively drive a city-wide collection campaign aimed at collecting the outstanding R1 billion, which has already been billed.
To ensure this problem never recurs, Council approved a detailed Performance Improvement Action Plan for our Energy services this past June. This is a forward-looking plan that includes developing a new Service Delivery Agreement, reviewing the organisational structure for greater efficiency, and working with National Treasury to implement a new financial model for metro trading business units. We are fixing the problems of the past while building a stronger system for the future.
FINANCIAL SUSTAINABILITY
Our focused efforts in the Energy department are part of a broader commitment to strengthening the City’s overall financial position. Sound financial management is the bedrock of sustainable service delivery.
I am proud to announce that our disciplined approach is bearing fruit. The City’s cash on hand has almost doubled, growing from 11 days in the previous year to 21 days for FY24/25. Our bank balance has increased to over R1.2 billion, a healthy improvement from R615 million in the prior year. Furthermore, our investment balances have seen a remarkable increase, now standing at R672 million, up from R245 million. This turnaround has not gone unnoticed; it has been affirmed by the markets, culminating in a recent improvement in our city’s credit rating, which signals renewed investor confidence in Ekurhuleni.
This prudent management ensures that every rand collected is maximised to fund the essential services our communities depend on. We are also planning for the long-term, 4 with a tender process underway for a revenue enhancement contract that will bring in innovation and further secure our financial future.
RESTORING SERVICE DELIVERY ACROSS THE CITY
Financial recovery is only one part of the story. The true measure of our success is the visible, tangible impact we have on the lives of our residents. While fixing the finances, we never lost focus on service delivery. In fact, we accelerated it. This can be supported by the fact that we have successfully spent 99% of our Capital budget, which is crucial for infrastructure delivery as per the following:
• In our Energy Department, we exceeded our targets. We installed 37 new High Mast Lights against a target of 30, brightening communities in Emandleni, Madelakufa, Somalia Phase 1, and Palm Ridge Extension 9. We installed 214 new streetlights against a target of 200, making roads like Khumalo Street in Katlehong safer. And we provided 3,287 new electricity connections to households in areas like Clayville Extension 77, Chief Albert Luthuli Extension 6, and Msholozi Phase 1, bringing light and dignity to our people.
• In Roads and Transport, we are connecting our city and improving our infrastructure. The first phase of our Bus Rapid Transit (BRT) system, a game[1]changer for public transport, is now 90% complete, creating a vital link from Tembisa to economic hubs like Rhodesfield, OR Tambo International Airport, and Isando. We have also undertaken massive road rehabilitation projects, including over 20 km of roads in the Kempton Park CBD on major arteries like Monument Road and Highveld Road, 3.9 km of Pretoria Road in Benoni, and the full length of Nala Street in Duduza. We have also maintained over 7,800 stormwater systems across the city, from KwaThema to Tembisa, to mitigate flooding.
• When it comes to Community Safety, our Ekurhuleni Metropolitan Police Department (EMPD) is more visible and eYective than ever. We conducted 133 high-density hotspot operations against a target of 100 to proactively reduce crime and accidents. To support our officers, we procured 30 new vehicles to improve response times. We are also investing in infrastructure, with the new Katlehong Fire Station and the Edleen Precinct in Kempton Park both nearing 90% completion.
• In Water and Sanitation, we are building for the future to ensure water security. Six new reservoirs and eight pump stations are currently under construction. We are upgrading critical sewer lines to protect our environment and support economic growth, and implementing a city-wide program to reduce water losses. We are also acutely aware of the 113,000 unmetered stands in our city, and a program to address this backlog will commence this financial year.
• In Waste Management, we have delivered consistent, uninterrupted waste collection to over 752,000 formal households and have extended services to 209,000 households across 131 informal settlements. All five of our landfill sites are fully operational and compliant. Our “Clean Your Kasi” programme has appointed 345 general assistants, creating jobs while fostering civic pride.
• In our Parks and Cemeteries, we have resumed city-wide grass cutting and are actively rehabilitating our precious wetlands, including Homestead Dam and Boksburg Lake, with the help of EPWP workers. We have also maintained a 100% success rate in fulfilling burial requests on time, treating our residents with dignity in their times of need.
• And in Human Settlements, we continue to restore dignity by providing homes. This past year, the City delivered 167 housing units and serviced 455 stands. This is not just about building houses; it is about building communities and giving families a foundation upon which to build their futures.
REPAIRS AND MAINTANANCE
A city that works is a city that is well-maintained. That is why this administration made a deliberate decision to prioritize the day-to-day services that matter most to you. We increased the budget for repairs and maintenance by R400 million, bringing our total investment in looking after our existing infrastructure to R3.1 billion for the 2024 financial year.
What does this mean for you? It means we are getting our depots working again and focusing on the basics. This investment is fixing our city, one repair at a time. The R1.3 billion allocated to Energy is fixing streetlights and replacing stolen cables to make our neighbourhoods safer. The R814 million for Roads is patching the potholes that damage your vehicles and frustrate your daily commute. The R449 million for Water and Sanitation is fixing leaks to conserve our precious water and unblocking sewage systems to ensure hygiene and dignity. Furthermore, we have developed a new Sanitation Services Sustainability Model, which will see the City adopt a hybrid approach of both hiring and acquiring chemical toilets, reducing our dependence on contracted services. This is a strategic move to cut long-term costs and enhance service reliability in our informal settlements. And the combined investment in Community Services and Environment is ensuring that grass is cut, and our public spaces are clean. This is a renewed approach to service delivery ensures your hard-earned money is being used to improve your quality of life, where you live.
CONCLUSION
Fellow residents, members of the media,
The picture I have painted today is one of a city on a positive trajectory. A city that is confronting its past challenges with honesty, managing its finances with prudence, and accelerating service delivery with a clear sense of purpose.
The state of governance in Ekurhuleni is stable, and our progress is undeniable. We are building a city that is resilient, responsive, and reliable.
Our work is far from over, but we move forward with a renewed sense of energy, driven by our promise to restore service delivery with agility, innovation, and impact.
This is our Road to Renewal in the City of Ekurhuleni.
Thank you.
