Dear Retief: I Am Struggling to Understand

The DA in Nelson Mandela Bay just successfully challenged and temporarily reversed the recent Electricity Hike. In the process we returned to the immoral and nonsensical (in normal business practice) IBT Tariffs.

Today the DA are leading a protest in Motherwell against a reduction in the ATTP services that indigent households receive.

Now, Listen Carefully:

The DA has reported widely that the Nelson Mandela Bay Municipality’s Electricity and Energy Department is running at an annual loss of approximately R1.5 billion. Over recent budget cycles, the department has accumulated more than R4.5 billion in total non-revenue electricity losses driven by illegal connections, meter tampering, and high volumes of unmetered consumption.

Point 1: So that means that the Electricity Department will be further starved of an increase in revenue that could have taken them out of the R4.5 Billion hole they find themselves in.

Point 2: If the ATTP services are re-adjusted/increased then that R4.5 Billion hole will just get bigger.

Point 3: The DA are campaigning just like the ANC now – steal from the rich to give to the poor.

Point 4: The Nelson Mandela Bay Municipality is carrying a staggering R23.4 Billion in total arrear debt.

Point 5: The municipality had a turnaround strategy that relied heavily on unrealistic revenue assumptions and the now denied 10.95% electricity hike – which, for some residents, was actually closer to a 30% hike.

IF NMB was an Actual Business:

Any potential CEO (City Manager) would run for the hills if presented with such numbers.

Not one potential shareholder would invest one red cent into the business.

The only reason why bankers lend the municipality money is because they know that the South African Taxpayer underwrites the debt. Municipalities main sources of revenue comes from Tax and Rate payers through legislation – a pretty safe bet for a banker!

What I Don’t Understand:

The DA is fighting hard to take over a failed business – to what end?

The DA is using the same tactics that it’s bed partner in the GNU has used to drive South Africa into this mess – free everything in order to get votes and stay in power.

Those tactics rely on legally paying citizens compensating for the losses due to stealing and incompetence.

Why is no-one saying; “Guys we have a huge problem here, but, we have this plan to fix it. The plan will take 5 years and then we can start easing off on the pain as we finally see the prosperous NMB on the horizon?”

Someone needs to deal with educating our citizens to adhere to the User Pays principle. Frankly any reduction in ATTP will lead to wholesale theft of electricity and water. See below for more on these losses.

Make no mistake – the DA says every election cycle that this year is the final year before total collapse so place your cross next to the Big Blue Machine – after all look what we did in the Western Cape. That birdy singing that song has long fallen to the hunter’s gun.

If the DA gets to govern NMB, they will have 4 years to magically engineer a turnaround before the next LGE preparations begin.

As a non risk averse person I look at this situation and ask myself where in the political world are the titans of industry that have the hanging appendages big enough to tackle and solve this problem. Sadly, I do not see any politicians capable of successfully running a spaza shop, let alone a business employing over 10 000 people with an annual turnover exceeding R17.4 Billion.

We have failed our people and cannot find a way out of the political lies.

Water Losses at 0ver 50% and Electricity Losses at Around 30%:

The Nelson Mandela Bay Municipality loses an estimated 26% to over 30% of its electricity supply to non-revenue (unaccounted-for) losses, translating to financial leaks of R1.3 billion to R1.8 billion annually.

According to data audited by the Auditor-General and municipal performance tracking, these massive deficits are broken down into distinct categories.

Annual Financial & Volume Losses

Overall Loss Margin: Non-revenue electricity losses currently sit between 26.81% and 30.14% of the city’s total purchased power.

Annual Rand Value: In the 2024/25 financial year, losses amounted to R1.323 billion (equivalent to over 932 million kWh). Mid-term budget tracking warns that these losses are rising toward R1.8 billion for the active cycle.

Historical Accumulation: The Democratic Alliance and local business chambers report that the metro has recorded a combined R4.53 billion in electricity losses over a four-year window.

Main Drivers of Non-Revenue Losses

Non-Technical Losses (The Largest Contributor): Making up nearly two-thirds of the total revenue lost, non-technical leaks are driven by human action, theft, and billing errors.

Illegal Connections & Infrastructure Theft: Thousands of informal and formal households bypass the grid entirely, with an estimated 42,000+ illegal connections remaining active.

Meter Tampering & Bypassing: Prepaid meter fraud remains rampant. A historical baseline revealed that Eskom and the city lose roughly R800 million purely to consumers who actively bypass prepaid systems.

Accounting & Billing Anomalies: Delayed data capturing and faulty billing municipal loops fail to capture accurate usage volumes.

Technical Losses:

Ageing Infrastructure: Due to the municipality spending just 2.5% of its asset value on repairs and maintenance (well below National Treasury’s 8% minimum norm), old cables and under-maintained substations cause immense physical energy dissipation during distribution.

Because the local Electricity and Energy Directorate loses up to a third of its potential product, NERSA and financial reports highlight that the municipality’s electricity division operates at a 35% deficit. This has forced the city to push aggressive retail tariff hikes onto legally paying citizens to compensate for the unrecovered.