Interventions for Addressing Electricity Challenges in Emfuleni Local Municipality

Department of Cooperative Governance and Traditional Affairs presents interventions to tackle electricity challenges in Emfuleni Local Municipality. The initiatives include infrastructure improvements, smart meter roll-out, and prioritization processes for transformer replacements. These efforts aim to enhance community access to electricity, improve safety, strengthen government-community relations, and boost revenue collection for municipalities. The overall goal is to enhance the quality of life and promote sustainable development in the region.

• Electricity Challenges
• Infrastructure Improvements
• Smart Meter Roll-Out
• Community Engagement
• Municipal Development

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1. DEPARTMENT OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS INTERVENTIONS TO ADDRESS ELECTRICITY CHALLENGES IN EMFULENI LOCAL MUNICIPALITY SELECT COMMITTEE ON PETITIONS AND EXECUTIVE UNDERTAKINGS 01 NOVEMBER 2023

2. Content 1. Purpose 2. Infrastructure 3. Finance 4. Recommendations 2

3. Purpose To present to Select Committee on Petitions and Executive Undertakings: Interventions to address challenges in Emfuleni Local Municipality 3

4. INFRASTRUCTURE

5. TRANSFORMER REPLACEMENT VALUE PROPOSITION Availability of electricity for communities that have been long been without electricity Improved relations between the community and government/municipalities/utilities Increased safety & security stemming from improved lighting in the areas Improved quality of life from access to electricity Revenues for municipalities/ utilities encourage culture of payment

6. Smart Meter Roll Out Value Proposition Programme entails the installation of smart meters in customer s households for accurate billing, reduction of losses, improvement of revenue collections, real-time online monitoring, credit control measures, load management. Below are the benefits: Load limiting capability will enable reduction in consumption when required Network equipment will be protected and will last longer from load management This will enable bi-directional metering for embedded generators The reduction and management of energy consumption will ease the load on the grid Potential economic spin-off from local communities' involvement in smart meter installation and commissioning City Power has panel appointments in place to commence the project implementation immediately

7. MUNICIPAL AREA OF SUPPLY

8. Prioritisation Process For Municipal Area Priority 1 All Transformers that have been out of service for an extended period of time Priority 2 All Transformers which are overloaded/due to illegal connections or load growth Priority 3 All Transformers at end-of-life cycle

9. SUMMARY OF AFFECTED AREAS 80 PRIORITY 1 DATA Priority 1 Priority 2 Priority 3 Utility Merafong Emfuleni Rand West Mogale City Total No of equipment Minisub Pole Mounted Undetermined Capacity No of Households 15 19 4 2 40 4 0 4 2 11 19 0 0 30 0 0 0 0 3 425 2 300 600 830 7 155 562 1 035 130 190 1 917 68 70 60 55 53 10 - 50 PRIORITY 2 DATA 43 Utility Merafong Emfuleni Rand West Mogale City Total No of equipment Minisub Pole Mounted Undetermined Capacity 14 370 No of Households 40 40 4 1 9 3 3 0 0 0 0 995 3 990 7 685 1 700 94 12 43 9 68 1 236 1 958 385 3 673 21 9 40 22 0 28 30 - 19 20 15 PRIORITY 3 DATA 12 9 Utility Merafong Emfuleni Rand West Mogale City Total No of equipment Minisub Pole Mounted Undetermined Capacity 16 350 16 600 No of Households 10 2 0 0 0 2 0 6 0 0 0 0 0 250 - 58 4 4 2 2 - 0 0 0 53 0 55 47 0 47 3 908 - 3 966 No. of sites Merafong Emfuleni Rand West Mogale City - 8 -

10. Overall Resources & Enablers Total number of transformers 163 (excludes Eskom areas of supply); Number of Transformers per week 3 per week (1 team); 6 per week (2 teams); 9 per week (3 teams); 12 per week (4 teams); 15 per week (5 teams) Number of Smart Meters per week 40 per week (1 team); 80 per week (2 teams); 120 per week (3 teams); 160 per week (4 teams); 200 per week (5 teams) Construction Team Deployment - to be incrementally, with various teams deployed simultaneously; Partnerships agreements: - Establishment of steering committees, - financial flow arrangements between parties, - Hand over arrangements (asset register, assets operation and maintanence requirements).

11. Summary Transformer Replacements Priority 1 Hand over arrangements Hand-over plan to include assets hand-over, asset register, assets operation and maintanence requirements. mers Substation Mogale City LM Krugersdorp West & Munsieville Transfor Miniature Number of Equipment 2 Completion Date* 31-Oct-23 Municipalities Affected areas Comments - 2 Rand West LM Westonaria, Hillshaven, & Glenharvie - 4 4 17-Nov-23 It will take 2 days to install, test and commision a transfomer /minisub per team. Three (3) months implementation period based on available resources. Emfuleni LM Bophelong, Boipatong, Eatonsyde, Bedworthpark, Three rivers Greenpark, Fochville, Kokosi, Carletonvile, Khutsong South 19 - 19 23-Jan-24 Merafong LM 11 4 15 19-Dec-24 Total 30 10 40 *Completion Date = Transformer successfully replaced and operational with customers connected

12. Emfuleni Roll-Out Plan Transformers (19) Priority 1 This plan covers 19 transformers and will be rolled out inline with the replacement of the transformers with 1 Team Stakeholder Engagement Consult Municipal Offcials, RD & Ward Councillors Engage community members 1 Week Site Assessment 1 Week 4 Weeks Appointment of contractors Procure material Resource projects Procurement of Goods & Services 8 weeks 1 team replacing 3 per week Site Installation 9 weeks Completion and Testing Prioritised Communities: Bophelong, Boipatong, Eatonsyde, Bedworthpark, Three rivers 19 Jan 24 28 Feb 24 2 Oct 23 14 Oct 23 13 Nov 23 30 Jan 24 7 Oct 23 23 Jan 24 12 16 Nov 23

13. Summary Transformer Replacements Priority 2 Municipalitie s Mogale City LM Rand West LM Westonaria, Hillshaven, & Glenharvie Emfuleni LM Bophelong, Boipatong, Eatonsyde, Bedworthpark, Three rivers Merafong LM Greenpark, Fochville, Kokosi, Carletonvile, Khutsong South Total Transfor mers - Miniature Substation 9 Number of Equipment 9 Completion Date* 13-Dec-23 Affected areas Comments Krugersdorp West & Munsieville It will take 2 days to install, test and commision a transfomer /minisub per team. Three (3) months implementation period based on available resources. 22 21 43 29-Feb-24 3 9 12 12-Jan-24 3 1 4 29-Jan-24 28 40 68 *Completion Date = Transformer successfully replaced and operational with customers connected

14. Emfuleni Roll-Out Plan Transformers (12) Priority 2 This plan covers 12 transformers and will be rolled out inline with the replacement of the transformers with 1 team Stakeholder Engagement Engage community members 1 Week Consult Municipal Offcials, RD & Ward Councillors Site 1 Weeks Identification 4 Weeks Appointment of contractors Procure material Resource projects Scoping and Procurement Site Installation 4 Weeks Completion and Testing 5 Weeks Prioritised Communities: Bophelong, Boipatong, Eatonsyde, Bedworthpark, Three rivers 28 Oct 23 28 Nov 23 29 Feb 24 9 Oct 23 11 Dec 23 12 Jan 24 14 Oct 23 14 13 Dec 23

15. Smart Meter Installations Number of Smart Meters 575 Municipalities Affected areas Completion Date Comments Mogale City LM Krugersdorp West & Munsieville 31-Dec-23 It is intended to replace up to 400 smart meters per day (with up to 50 teams as required). Rand West LM Westonaria, Hillshaven, & Glenharvie Bophelong, Boipatong, Eatonsyde, Bedworthpark, Three rivers Greenpark, Fochville, Kokosi, Carletonvile, Khutsong South 5996 29-Feb-24 Emfuleni LM 2271 30-Mar-24 Smart meter installations will follow the priority 1 tranformers completion date Merafong LM 714 31-Dec-23 Total 9556

16. ESKOM AREA OF SUPPLY

17. Energy Consumption Gauteng Eskom Areas of Supply

18. Eskom Areas of Supply Failed Transformers

19. Eskom Vaal Zone Transformers

20. Eskom Failed Transformers Between 2016 and 2019, Gauteng Cluster had replaced minisubs and transformers to the value of R 420 million, which was not sustainable. This was done as and when the transformer fails due to overloading, and in many cases the transformer zones were split in order to prevent future failures. However, that did not prevent future failures but increased the number of transformers that failed. Gauteng Cluster had standardized the use of MCCB for overload protection on the LV side of pole mounted transformers in collaboration with the LV fuses. However, these devices were bypassed to prevent nuisance tripping which then caused complete failure of transformers. The CVMs, AMP Masters and recorders were also installed in some of the transformers to confirm the overloading problems. The cluster then decided on investigating the root cause of these failures and overloading was the main reason, where other reasons such phase balancing, poor workmanship and poor quality of transformers being some of the findings. The underlying problem that caused overloading was the culture of non-payment of electricity. The cluster analysed the sales trends and picked up that most of the failed transformers and minisubs were in areas where there is low buying trends, meaning most of the consumers of electricity were consuming indiscriminately as they were not paying for it.

21. Eskom Failed Transformers The cluster decided that before the failed minisub or transformer is replaced, an audit for the transformer zone will be done looking for tampering of meter and evidence of illegal vending of electricity: If 60% or more customers are buying electricity, the transformer will be replaced as soon as the stock is available. The remaining 40% will be issued with tamper fines and will be reconnected when the tamper fines are paid. - If less than 60% of the customer are buying electricity, the customers who are found to have tampered with their supply are issued with tamper fines and the transformer will be replaced when more than 60% are in good standing with Eskom and the stock is available. This approached has help the cluster in reducing the cost to R 171 million (from 2019 to date), and the transformers that have been replaced are 1 605 (60% of 2 675), including 131 repeat failures.

22. Overall Resources & Enablers (Eskom As Implementing Agent) Total number of transformers for Eskom 289 (312 previously); Number of Transformers per week 11 per week; Number of Smart Meters per week 500 per week; Contractor teams in the process of establishment and will be ramped up in the next coming weeks, with additional contractor teams deployed across the entire province; The plan is based on securing necessary resources (material and labour) to replace and rebuild vandalized network. This is dependent on community cooperation in allowing Eskom teams to construct without any disturbances (business forums and local labour requirements). This plan does not include all future failures that may occur, but Eskom remains committed to accelerating the replacement of failed transformers.

23. Eskom - Detailed plan for Transformers Restoration Airdek Conductor in metres Transformers Prepaid Meters Pole top Boxes Ready boards Projected Completion date Total Supplementary Contractor Teams Customers off 5700 375 525 1050 6300 3975 16275 4950 39150 # Trfr-DPA Compliant 43 5 7 14 27 27 143 46 312 All All # Cust off 3225 375 525 1050 2025 2025 10725 3450 23400 3/week 2/week 24-Jul 23-Sep 23-Oct 23-Oct 24-Aug 24-Mar 25-Oct Zone Sector # Trfrs off 76 5 7 14 84 53 217 66 522 Req 43 5 7 14 27 27 141 46 310 Avble Req 19500 7500 10500 21000 40500 40500 Avble Req 3225 375 525 1050 2025 2025 10725 3450 23400 Avble Req 806.25 93.75 131.25 262.5 200 506.25 Avble Req 1000 375 525 1050 2025 2025 6725 3450 17175 Avble DPA paid 0 210 0 0 0 0 130 100 440 1109 Tswane West Tswane East(1ms) Benoni Nigel Soweto(61ms) Sandton(1ms) Vereeniging Randfontein(9ms) 0 5 4 4 6 9 3 214500 3 69000 423000 15541 0 420 298 186 223 500 300 312 2681.25 436 2675 2544 0 23-Dec 24-Feb 23-Sep 23-Sep 23-Sep 23-Sep 23-Oct 23-Oct 23-Oct 24-Mar 23-Oct 24-Jan 24-Mar 23-Dec 24-Feb 24-May Tshwane 3536 1600 1155 2000 3500 3500 250 166 38 Ekurhuleni 0 0 0 Jhb 90 44 24-Jul Vaal 862.5 5543.8 34 140 338 Warehouse Available stock 53454 338 5205.75 1 549 15 626 Total Available 174 136 68 995 5 219 Unavailable material Material on Order 354 005 20 856 398 220 000 21 336 0 A total of 310 transformers is required, 140 are available in stock for roll-out. Emphasis is placed on TISH areas for Transformers replacement programme

24. Planned Transformers Replacement and Smart Meters Installations Municipality / Area Eskom Gauteng Identified Transformers Total 522 List of Townships/Comments Ekurhuleni - Daveyton, Petit, Dunnottar, Katlehong, Tsakane, Vosloorus, Zonkizizwe Ekurhuleni 21 Jo burg 137 Tshwane 81 Vaal 283 Johannesburg Mnandi, North Rand, Lanseria, Soweto: Braamfisherville, Diepkloof, Klipspruit, Zola, Princess, Taunus, Orange Farm Tshwane Cullinan, Ga Rankuwa, Mathibestad, Temba, Mabopane, Mothutlung, Winterveld West Rand Carletonville, Libanon, Magalies Sedibeng Meyerton, Palm springs, Rigi North, Sebokeng

25. Eskom Transformer Replacements Programme Completed Work Number of Customers 75 Areas/Sectors Transformers Comments Tshwane West 1 1. In order to prevent fruitless and wasteful expenditure, the cluster decided that before the failed minisub or transformer is replaced, an audit for the transformer zone will be done looking for tampering of meter and evidence of illegal vending of electricity: Tshwane East 2 150 a. If 60% or more customers are buying electricity, the transformer will be replaced as soon as the stock is available. The remaining 40% will be issued with tamper fines and will be Benoni 1 75 reconnected when the tamper fines are paid. b. If less than 60% of the customer are buying electricity, the customers who are found to have Nigel 3 225 tampered with their supply are issued with tamper fines and the transformer will be replaced Soweto 5 1 025 when more than 60% are in good standing with Eskom and the stock is available. 2. This approach has helped the cluster in reducing the cost to R 255 million (from 2019 to Sandton 2 150 date), and the transformers that have been replaced are 350 (84.79% of 2 301) as of 1 Sep 2023, including 162 repeat failures. Vereeniging 7 475 3. The cluster has also decided to perform disconnection on tampered meters and zero buyers Randfontein 2 150 on daily basis to prevent failures of transformers due to overload prioritizing the transformer with high number of zero buyers. Total 23 2 325

26. Transformer Replacements Outstanding Work to be Completed by Jan & July 2024 Miniature Substation Number of Customers 3 150 Areas/Sectors Transformers Completion Date Comments Tshwane West 42 Feb 2024 Tshwane East 3 1 225 October 2023 Eskom understands the impact that electricity has on communities and the effects of the prolonged outages. Benoni 6 450 October 2023 Nigel 11 825 October 2023 Thus, communities are urged to safeguard and protect the infrastructure and consume electricity sparingly. Soweto 22 61 1 000 March 2024 Sandton 25 1 1 875 January 2024 Vereeniging 136 10 250 July 2024 Randfontein 44 9 3 300 February 2024 Total 289 72 21 075

27. SOLAR HIGH MAST LIGHTS

28. Solar High Mast Programme Value Proposition This programme is renewable solar powered public lighting systems for improved visibility and security and reduced sunk costs. The intention is to focus on informal settlements and townships. Below are some of the associated benefits: Enhanced visibility leads to improved safety, including during load shedding Improved safety and security for communities Reduced energy demand / improved energy savings Reduced operational costs Reduced crime in the areas Increased economic activity from extended working hours Roll-out of Solar High Mast lighting in tandem with CCTV cameras will improve prevention and detection of crime

29. Solar High Mast Lights Total # Municipality Beneficiary Communities Number of Lights City Power All areas 140 City of Tshwane All areas 140 City of Ekurhuleni All areas 140 Mogale City LM Kagiso & Extensions; Munsieville 40 Rand West LM Bekkersdal & Mohlakeng 40 Merafong LM Khutsong, Kokosi & Wedela 25 Midvaal LM Everton and Randvaal 25 Emfuleni LM Sebokeng and extensions, Evaton/ Kanana/Beverly Hills/Palm Springs/Lakeside; Sharpeville & Tshepiso, Boipatong; Bophelong & Muvhango; Kanana 50 Lesedi LM Ratanda, Impumelelo, Jameson Park, Obed Nkosi, Kwazenzele 20

30. LPU AND TEAM OF EXPERTS SUPPORT

31. Gauteng COGTA INFRASTRUCTURE SUPPORT NATURE OF SUPPORT DESCRIPTION KEY ACTIVITIES IMPACT Conduct a meter audit, commission an online meter management system and installation of meters for industrial/commercial consumers in Emfuleni. Technical Audit of Meters to identify the needs Commission, install and setup an Online Meter Management platform Supply and Install Meters Aim to reduce losses Improve Large Power Users Meter Reading Accuracy technical projects Improve Large Power Users Meter Reading Accuracy Data driven projects Assist Emfuleni to ensure billing Large power users. A total of 1 841 large power users meters are currently being monitored online and information used for billing LPUs Technical Audit of Infrastructure Assets to identify the most critical service delivery needs Service Delivery and Infrastructure Development support in all six targeted municipalities and three metros. Water and electricity loss and demand management Bulk services determinants with a specific focus on Human Settlements developments Expediting and eradicating bulk and connector infrastructure backlogs to align infrastructure provision with practical completion of development projects Renewable Energy Project Management Support Energy Crisis Response Plan Engineering support Project management support Electricity, Roads and Storm Water; Solid Waste Improved Service Delivery Technical skills capacity support through multi-disciplinary teams (engineering and town planning).

32. FINANCE

33. DEBT BOOK

34. ESKOM ACCOUNT REPORTING MONTH : August-2023 Section 41(2)(b) : Amounts owing and the age profile of outstanding amounts relating to Bulk Electricity Sales Name of Municipality Current 8 044 491 340 2 127 848 368 2 317 078 150 1 700 017 850 1 032 501 442 54 269 802 147 065 144 54 924 157 325 980 199 284 806 228 16 - 30 days 31 - 60 days 4 040 423 658 677 270 707 61 - 90 days 353 633 975 90 days+ 7 074 706 545 Total GAUTENG CITY OF EKURHULENI METROPOLITAN MUNICIPALITY CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY CITY OF TSHWANE METROPOLITAN MUNICIPALITY EMFULENI LOCAL MUNICIPALITY LESEDI LOCAL MUNICIPALITY MERAFONG CITY LOCAL MUNICIPALITY MIDVAAL LOCAL MUNICIPALITY MOGALE CITY LOCAL MUNICIPALITY RAND WEST CITY LOCAL MUNICIPALITY 7 030 705 19 520 286 223 2 805 119 075 2 322 803 680 4 300 827 962 7 439 349 008 142 240 091 799 025 428 54 924 157 567 552 580 1 088 444 241 59 60 61 62 63 64 65 66 67 0 0 0 0 0 0 3 494 407 908 6 612 741 5 722 036 2 597 403 558 494 464 780 47 862 449 65 285 337 2 998 645 5 626 031 667 2 344 359 550 542 830 279 738 377 37 763 481 36 132 117 0 0 0 0 0 0 0 0 0 132 180 707 20 234 083 109 391 675 783 397 369 6 561 Emfuleni LM has the highest debt compared to other municipalities in the province, which constitutes 51% (R7 billion) of the total debt owed to Eskom in the province, and the interest portion is at R1.3 billion. Eskom had taken the municipality to court for outstanding overdue payments. The Municipality has decided not to appeal the court order. According to the court order, the Large Users within the Municipality are required to pay for their electricity consumption directly to Eskom with an Emfuleni reference. The Municipality believes that this arrangement is likely to help ensure that Eskom is paid for its current account to ensure that they stay up to date with their electricity payments and do not accumulate further debt to Eskom. There are contradictions with regards to the implementation of the court order and the application requirements for Circular 124 on the Eskom Debt Relief. The Municipality is preparing a letter to National Treasury to request to be exempted from some of the conditions of the Debt Relief as they will not be able to comply based on the court order. 34

35. RAND WATER ACCOUNT Section 41(2)(b) : Arrears owing and the age profile of outstanding amounts relating to Bulk Water Sales Principal Arrear Amount Interest Portion Name of Municipality Current 30 days 60 days 90 days 90 days+ Total JOHANNESBURG WATER (SOC) PTY EKURHULENI METROPOLITAN MUNICIPALITY TSHWANE METROPOLITAN MUNICIPALITY EMFULENI LOCAL MUNICIPALITY MOGALE CITY LOCAL MUNICIPALITY MIDVAAL LOCAL MUNICIPALITY MERAFONG CITY LOCAL MUNICIPALITY RANDWEST CITY LOCAL MUNICIPALITY LESEDI LOCAL MUNICIPALITY 1 2 3 4 5 6 7 8 9 750 412 047 429 122 849 336 021 108 126 390 137 39 559 377 15 036 991 36 793 305 37 424 133 9 664 768 410 166 929,66 326 675 765,01 124 650 222,31 36 644 033,56 36 101 089,82 9 189 333,37 - 126 349 449,66 38 114 510,34 36 194 725,51 9 686 771,92 - 123 714 037,58 36 348 793,33 33 284 768,22 7 446 989,48 - - - 532 459 810,26 518 140 903,15 259 206 597,19 4 166 951,11 - - - 4 451 429 396 750 412 047 841 752 781 662 696 873 1 033 563 657 39 559 377 15 036 987 666 041 545 402 211 313 40 154 814 - 2 463 002,50 2 538 147,37 7 933 679,10 6 708 791,42 3 680 988,55 275 883,49 - 2 463 002,50 410 166 930 324 137 618 899 239 841 - - - - - - - - - - - - (3,78) 622 539 449 361 106 192 30 214 162 - 1 780 424 715 943 427 370 212 808 460 200 794 589 1 313 974 262 2 647 404 192 23 600 492 35

36. RAND WATER ACCOUNT Name of Municipality Overdue Balance Details of actions taken and timeframes of actions to recover arrears COE Metro has requested the 60%/40% payment period extension relief arrangement to pay their current account. RW has requested COE to settle all the outstanding amount before considering their request. Customer paid R3 125 365.51 on 11.08.2023 412 629 932 9001 EKURHULENI METROPOLITAN MUNICIPALITY COT Metro indicated that they have financial challenges, Customer paid R80 620 600.33 on 03.08.2023 and R80 000 000 on 08.08.2023. 326 675 765 9002 TSHWANE METROPOLITAN MUNICIPALITY RW has attached the bank account for the municipality and with no intention to uplift the it until the debt is fully settled, however Eskom has also attached the municipalities bank account therefore the sharrif is splitting the monies between the two entities with an allowance of salaries and agreed third party payments for the municipality. we have only received R169m from the Shariff in June 2023. 907 173 520 9003 EMFULENI LOCAL MUNICIPALITY RW is constantly engaging the municipality to ensure they honor the new repayment plan for 72 months. due to changes in the Municipal Manager position and the Municipality being placed under preliminary administration. The Municipality is delaying to sign the DSA and has requested another repayment plan for over three years. 629 248 240 9009 MERAFONG CITY LOCAL MUNICIPALITY The municipality has signed a debt settlement agreement with Rand Water committing their equitable shares for old debt and servicing their current account monthly but the arrangement it is not honoured fully.Customer paid R 5 000 000 on 04.08.2023 and R 9 500 000 on 08.08.2023 364 787 181 9011 RANDWEST CITY LOCAL MUNICIPALITY The Municipality has not committed on the settlement of the overdue account and RW has been waiting for their proposed repayment plan. Ministerial Task Team (DWS and COTGA) has promised to engage the municipality to bring them to the negotiation table for the amicable DSA. Customer paid R750 000 on 11.08.2023 30 490 046 9012 LESEDI LOCAL MUNICIPALITY 2 671 004 684 36

37. MUNICIPAL FINANCE SUPPORT

38. SIMPLIFIED REVENUE PLANS (EMFULENI LM) The project is to Review, Enhance, Develop and Implement Simplified Revenue Plan to assist 6 Municipalities in Gauteng (Lesedi, Randwest City, Mogale City, Merafong City, Emfuleni and Midvaal Local Municipalities). Once the review and enhancement of the assessment is conducted, Simplified Revenue Plans are developed as per the identified areas of concern in the municipalities. The simplified revenue plans once implemented result in improved revenue management; reduced municipal consumer debt and enhanced municipal revenue collection potential. Furthermore, we are establishing of Integrated Revenue Forum where executive directors of Infrastructure, Corporate services etc meet to resolve the challenges related to revenue collection. Currently the project is concluded in Midvaal and Lesedi and implementation is now at Randwest, Mogale City and Emfuleni. Emfuleni Local Municipality The review of the revenue value chain has been completed. Assessment reports on weaknesses to be addressed have been compiled. A Simplified revenue plan to address gaps identified have been developed. Engagements are being held with the municipality to agree on both the assessment report and the simplified revenue plan to address the gaps identified in the assessment report. 17,192.00 accounts were identified with incorrect ID Numbers with an associated debt amount of R 826,772,586.62. 4,873.00 inactive accounts were identified with an associated debt amount of R 136,685,400.27. Impact of Support Increase Revenue collection. Improved accurate billing system. Integration of Municipal revenue generating systems. Improve Revenue Protection.

39. THE IMPLEMENTATION OF THE GOVERNMENT DEBT REDUCTION STRATEGY. 9 MUNICIPALITIES SUPPORTED WITH THE IMPLEMENTATION OF THE GOVERNMENT DEBT REDUCTION STRATEGY. (MOGALE, EMFULENI, RANDWEST, LESEDI, MIDVAAL, MERAFONG,COJ,COT AND COE MUNICIPALITIES) Below is the Gauteng Provincial Government Debt and payment to Municipalities as at the end August 2023 : GPG Debt as of the end of August 2023 Departments Rands CoJ Ekurhuleni CoT Emfuleni LM Lesedi LM Midvaal LM Mogale LM Merafong LM Rand West LM TOTAL DoE S20 DID DRT DoH DSD DHS TOTAL 9 576 825,38 -23 839 591,22 233 419,46 400 537 988,35 452 744,26 115 753 478,95 502 714 865,18 - 97 584 469,14 10 062 100,22 12 801 615,40 722 714,48 2 575 199,78 123 746 099,02 9 369 579,98 253 821 117,29 1 167 709,31 16 885 691,54 12 647 173,95 144 467,56 294 035 739,63 7 224 407,72 20 521 745,67 198 896,86 6 028 741,30 1 907 254,82 -1 364 470,86 901 372,40 2 534 330,62 236 888,04 2 965 979,50 - - - 1 706 775,10 4 909 642,64 1 321 865,26 13 915 803,64 - 12 248 880,71 684 288,32 -8 953 701,40 - 2 054 896,41 293 351,71 18 952 111,07 - 163 286,34 29 899,19 30 614 461,23 373 603 462,83 12 563 498,25 453 255 430,67 13 852 531,88 121 412 157,76 1 005 301 542,62 - 1 232 236,37 35 206 027,92 - - 3 978 486,98 - - 27 486 549,61 - - -6 214 516,67 - 19 438 648,31 Percentages Per Depts 3,0 37,2 1,2 45,1 1,4 12,1 GPG Payments end of August 2023 Department CoJ EKU CoT Emfuleni LM Lesedi LM Midvaal LM Mogale City LM Merafong City LM Rand West LM TOTAL DoE S20 17 555 109 97 886 915 424 777 73 686 078 406 713 23 030 251 212 989 842 14 893 948 409 309 103 288 15 188 576 1 055 525 8 613 632 - 3 178 057 16 331 846 3 189 403 3 480 247 - - - - - 3 480 247 888 759 - 465 275 744 309 619 711 462 972 9 514 471 - - - - 9 977 443 897 631 - 74 397 5 455 527 773 340 11 585 575 - 515 780 485 336 17 666 029 - 326 199 48 050 974,21 137 062 298,72 4 245 793,60 112 248 314,66 5 271 351,47 23 030 250,82 329 908 983,48 DID DRT DoH DSD DHS TOTAL - 31 650 645 - 31 312 939 - 2 718 054 - - 6 427 555 - - 12 874 695 - 18 477 564 Percentages Per Depts 14,6 41,5 1,3 34,0 1,6 7,0

40. THE IMPLEMENTATION OF THE GOVERNMENT DEBT REDUCTION STRATEGY. GAUTENG PROVINCIAL GOVERNMENT PAYMENT FOR RATES AND SERVICES Municipalities Amounts In rands 2015/16FY Emfuleni LM 2016/17FY 63 242 888,50 2017/18FY 123 087 879,25 2018/19FY 139 054 738,50 2019/20FY 125 824 145,50 2020/21FY 147 262 957,18 2021/22FY 135 794 562,74 2022/2023FY April 2023 to date Total 79 802 921,67 152 666 496,02 24 041 192,04 990 777 781,40 Above are payments made by Gauteng departments to Emfuleni LM. IMPACT OF SUPPORT The success of the committee in coordinating the IGR engagements between the municipalities and departments has resulted in: Improved communication and relationships between the departments, parastatals and municipalities. Reduction in the disconnections of critical services. Encouraging departments and parastatals to provide proof of payments to facilitate the correct allocation of accounts within municipalities. Working sessions with the municipalities has resulted in discussions of the following amongst other things: Verification and reconciliation of the accounts; Challenges faced by departments when dealing with the municipality; Challenges faced by municipalities when dealing with the GPG departments Municipality s Government Debt Value Chain and its effectiveness; Negotiation on cut-off while resolving the disputed accounts and unconfirmed properties; and Credits and payments allocations.

41. OPCA SUPPORT PURPOSE The Department supports Emfuleni L.M to address issues raised by the AGSA through the OPCA Provincial Coordinating Committee which assists municipalities with advisory support on the implementation of the Audit Action Plan. The municipality is supported on Audit Action Plans through OPCA which is aimed at achieving clean audit. The OPCA Provincial Coordinating Committee workshops are convened quarterly to provide advisory support to municipality through the assessment and strengthening of the audit response plan. The ultimate objective of the committee is to improve municipal audit outcomes. The implementation of the action plans are monitored through workshops held with municipalities and different stakeholders in the local government sphere (Auditor General, CoGTA, Treasury, SALGA and CIGFARO). PROGRESS The municipality prepared detailed Annual Financial Statement (AFS) readiness and year-end closure process plans in preparation for the 2023 financial year-end and subsequently submitted their AFS to the Auditor General on the 31st August 2023 as required by Section 126 of the MFMA. The municipality did not submit their AFS to the department on time (15th August 2023) for an in-depth review planned to be conducted CoGTA and Gauteng Treasury. However, the City utilised their internal processes including Audit Committee to review the AFS set before the submission to the AGSA. The department continues to provide advisory support to the City during the audit process through participation of the Audit Steering Committee Meetings.

42. OPCA SUPPORT IMPACT The peer learning and sharing of best practices has also ensured municipalities improve in some technically complex areas that may have needed the municipalities to solicit technical assistance of service providers and pay a lot of money. This peer learning has been particularly effective for the Metros; The involvement of all stakeholders assists the municipalities to access support in the areas in which they are experiencing difficulties; Furthermore, the initiative has significantly reduced duplication of support initiatives aimed at improving financial management in the local government sphere by the different role players; and Although stagnant in terms of the audit opinion Lesedi LM and West Rand District municipalities have shown improvement in the quality of financial statements. However, these municipalities still have material findings on compliance with laws and regulations.

43. UNAUTHORISED, IRREGULAR, FRUITLESS & WASTEFUL EXPENDITURE PROJECT PURPOSE The department has provided professional services to the municipality to resolve unauthorised, irregular, fruitless and wasteful (UIF&W) expenditure. The objective of the project was to implement internal controls to resolve UIF&W expenditure by assessing and analysing the processes in place to identify, prevent, reduce and report identified unauthorised, irregular, fruitless and wasteful expenditure and make recommendations towards improving the environment. PROGRESS The project resumed in the municipality in 2022. An As-Is assessment was conducted. The As Is Report provided a detailed report on the current state of the systems, processes and procedures within the municipal environment outlining the: Status quo and effectiveness of the current system; Areas that require attention (weaknesses identified); Broad recommendations in terms of improving the environment. Subsequently, a Project Implementation Plan was drafted to address the weaknesses identified in order to fully address the issues around UIF&W expenditure. The plan was implemented and training was provided to municipal officials and MPAC Members.

44. UNAUTHORISED, IRREGULAR, FRUITLESS & WASTEFUL EXPENDITURE PROJECT AS-AS REPORT FINDINGS KEY FOCUS AREA UIFW Reduction strategy GAPS IDENTIFIES Municipality required by National strategy to develop a Reduction strategy. Emfuleni Municipality did not develop a reduction strategy. Root cause No-compliance - - No case register is maintained by Emfuleni Municipality. No investigation being conducted. Case register review - Municipality does not keep track of the cases to be investigated. No investigations done on UIFW expenditure, therefore no recommendations made on UIFW expenditures. - Vacancies not filled timeously. No investigations done on UIFW, and no consequence management has been implemented. Consequence Management - MPAC investigations SCM Organogram CFO positions currently not filled permanently. Structure and - Municipality does not keep record of the Internal audit and finance staff establishment. SCM Contract register does not include some of the relevant fields (i.e., date of awards, contract status, contract / SLA signing date). There isn t proper record keeping of the positions that are currently vacant. No trainings conducted on the SCM processes and contract management. - - Contract management register / - Contract register not updated regularly. Expenditure actually incurred and the remaining / unspent contract value to date not included in the contract register. - Contract variations or extensions not included in the contract register. -

45. UNAUTHORISED, IRREGULAR, FRUITLESS & WASTEFUL EXPENDITURE PROJECT AS-AS REPORT FINDINGS KEY FOCUS AREA GAPS IDENTIFIES Root cause - The collection rate for the month of July 2022 is 46% The targeted collection rate in the Budget Funding Plan is 84% for the 2022/23 financial year. - No review of the consolidated budget to ensure that it includes budgets for all departments and all planned projects. UIFW expenditure - The growth in the debtors of the municipality indicates the rate at which municipality s accounts are not paid. Municipality does not have a functional DC board. - Budgeting outcomes from the previous years. based on realistic - - MPAC investigations. not referring any Financial Board Disciplinary - Municipality investigation unit not dealing with UIFW related cases, as no matters are being referred to them by Council for investigation. - MPAC did not ensure that a functional DC board is established.

46. UNAUTHORISED, IRREGULAR, FRUITLESS & WASTEFUL EXPENDITURE PROJECT Below are the highlights of the project: Completed UIF&W Expenditure Reduction Strategy Completed investigation case register and report Completed UIF&W Expenditure Registers Updated the contract register Updated the SCM Policy Completed Compliance checklist Standard electronic templates for the recording of the unauthorized, irregular, fruitless and wasteful expenditure. Documented Standard Operating Procedures (SOP) with step-by-step process on internal controls to be put in place to identify, prevent, reduce and implement consequence management on unauthorized, irregular, fruitless and wasteful expenditure (electronic discs and manual booklets). Assisted the City to compile the Audit Action Plan on the issues raised by the AGSA. IMPACT UIF&W Expenditure Reduction Strategies for the management of historic UIF&W expenditures will enable municipalities to focus on the ever-increasing expenditure. This will allow management to take steps to address these expenditures while taking accountability and implementing consequence management for transgressors.

47. Recommendations It is recommended that Select Committee on Petitions and Executive Undertakings: 1. Note the report on interventions to address electricity challenges in Emfuleni Local Municipality

48. THANK YOU