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The City of Johannesburg is grappling with more than R10bn in losses across its water, electricity and housing entities.This is according to mayor Dada Morero, who revealed this before parliament’s standing committee on public accounts (Scopa) on Tuesday.Morero acknowledged deep-rooted financial and governance challenges but argued the metro was making progress in addressing them.“We understand the root causes articulated by the auditor-general, and we must bear in mind the population we are servicing, taking into account ageing infrastructure and budget constraints,” he said.The municipality received a qualified report, and the appearance before the committee comes after the city was removed from the JSE’s non-compliance list.Morero said Joburg Water was facing losses of 44.7% due to leaks, amounting to about R3.8bn.He said City Power’s total electricity losses stood at about 30%, with non-technical losses costing for about R4bn and technical losses accounting for R1.7bn.The mayor also highlighted challenges at the Johannesburg Social Housing Company, which is carrying a deficit of about R559m.ALSO READ | Joburg and Treasury on collision course over R10.3bn wage dealA timeline wasn’t given for the period over which the losses were incurred.Despite the financial pressures, Morero pointed to several entities that had achieved clean audits and recorded surpluses.“We have good stories to tell,” he said.These included Joburg Market, which posted a R153m surplus and accounts for 43% of the national market share. The Johannesburg Property Company had a R114m surplus, while the Johannesburg Tourism Company posted a R21.4m surplus.Morero said metro trading reforms would help tackle “structural problems causing a split in accountability and lack of financial transparency and management accountability”, and governance failures, low revenue collection and weak investment.The mayor reported progress in reducing historical unauthorised expenditure, saying accumulated balances had declined from R23bn to R15.3bn.However, he warned “new unauthorised expenditure remains at about R9bn per annum”, while new irregular expenditure is about R3.7bn.“A lot still needs to be done, and the foundation is laid.“Our task is to focus on the implementation,” Morero said.City manager Floyd Brink said the budget is funded, noting concerns raised by finance minister Enoch Godongwana.Godongwana recently raised concerns that Joburg had passed an unfunded adjustments budget, overestimated its revenue projections, and signed an unaffordable R10.3bn wage agreement despite being in severe financial distressBrink said the city’s focus was on improving revenue collection and strengthening expenditure controls. He told MPs collection rates had improved significantly, rising from 71% in January to 81% in February and 96.5% in March, before remaining above 90% in April.Brink said: “The trajectory looks positive. It’s to ensure a high level of consistency and for us to be able to ensure our budget remains funded in a disciplined manner, and focusing on our cash flow.”
