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City Power Ring-fencing is a Good Start

The Organisation Undoing Tax Abuse (OUTA) supports City Power’s move to ring-fence electricity revenue from 1 October 2026, saying it is an important, long-overdue step toward fixing Johannesburg’s struggling electricity system.

“Ring-fencing” actually means that the City of Johannesburg will continue collecting electricity payments as it does now. However, 70% of the electricity revenue it collects on City Power’s behalf will be transferred to City Power within 48 hours. The City will retain the remaining 30%.

For customers, nothing changes about how or where they pay. They will continue receiving the same municipal statement and using the same account numbers, payment references and approved City payment channels.

What should change is what happens to the money after residents pay it.

The new arrangement should give City Power greater certainty about the revenue available to run the electricity service, including paying Eskom and suppliers, repairing and maintaining infrastructure, buying critical equipment and investing in Johannesburg’s electricity network.

“For years, residents have paid increasingly expensive electricity bills while watching parts of the electricity network deteriorate around them. Part of the reason for this deterioration was due to electricity revenue being used to pay all different kinds of expenses incurred by the City, instead of prioritizing and sufficiently funding electricity services.

There needs to be a much clearer link between the money collected for electricity and the money available to keep the electricity system working,” says Julius Kleynhans, Executive Manager at OUTA.

“Put simply, if you pay for electricity, you should be able to see that enough of that money is going back into sustaining the electricity service.”

What this should mean for residents

Johannesburg’s electricity network faces significant financial and infrastructure pressures, including ageing infrastructure, theft and vandalism, illegal connections, electricity losses and the cost of buying bulk electricity.

Ring-fencing is intended to give City Power greater control and certainty over the resources it needs to address these pressures.

“Electricity revenue must first and foremost sustain the electricity service. That means paying bulk electricity costs, maintaining and replacing infrastructure, reducing technical and non-technical losses and investing in a network that has been under severe strain,” says Kleynhans.

“If properly managed, this should help City Power plan better, reduce disruptions and, over time, help relieve some of the financial pressure contributing to repeated electricity increases, which will hopefully create an environment for the economy to grow.”

OUTA says the same principle should apply to other essential municipal services.

Residents pay separately for electricity, water, sanitation and refuse removal. There should therefore be a clear and publicly traceable relationship between what residents pay for these services, what it costs to provide them and how much is reinvested in the infrastructure needed to deliver them.

What happens to the other 30%?

OUTA says the City’s announcement also raises an important question that requires greater public clarity.

If 70% of electricity revenue is transferred to City Power, the City should explain what the remaining 30% is intended to fund, how that percentage was determined, and how its use will be accounted for.

“City Power and the City should show us what was collected, what was transferred, what the City retained, what was lost through theft and non-payment, what was spent on maintenance and infrastructure, and whether Eskom was paid.”

OUTA believes regular public reporting against these measures would allow residents to determine whether ring-fencing is actually strengthening City Power’s finances and improving the electricity service.

Ring-fencing will not fix bad governance

OUTA cautions that changing how revenue flows will not, on its own, solve Johannesburg’s wider financial and governance problems.

Wasteful expenditure, poor procurement, weak financial controls, revenue collection failures, electricity theft and losses, poor budgeting and project management, and other operational inefficiencies must still be addressed.

Where corrupt or criminal networks have infiltrated municipal procurement or operational structures, these must be investigated, disrupted, and those responsible held accountable.

“Ring-fencing cannot become an excuse to ignore the City’s other financial problems,” says Kleynhans.

“Protecting electricity revenue is one part of fixing the system. The City’s leadership must still tackle waste, corruption, weak controls and poor performance throughout the administration.”

Essential services must be protected beyond political terms

OUTA says reforms governing essential services must also be designed to withstand changes in Johannesburg’s political leadership.

The move towards greater financial separation of Johannesburg’s trading services forms part of a broader reform process, rather than a once-off City Power initiative.

With Johannesburg heading towards local government elections on 4 November, OUTA says the rules governing essential-service revenue should not depend on which party or coalition controls the City.

“These reforms cannot belong to one mayor, one coalition or one political term,” says Kleynhans.

“Johannesburg will still need electricity, clean water, functioning sanitation and reliable refuse collection after the election, regardless of who governs the City. The financial controls protecting these services must be transparent, institutionalised and difficult for any administration to manipulate or reverse without proper public scrutiny.”

OUTA says residents ultimately need to see the reform reflected in the services they receive.

“Joburg residents should not be paying premium tariffs while living with prolonged electricity outages, water disruptions, sewage pollution, deteriorating infrastructure and unreliable refuse collection,” says Kleynhans.

“This is a positive step, but implementation is now the real test. Protect the revenue. Publish the plans and numbers.

Maintain the infrastructure. Pay what is owed. Then show residents that the service is actually getting better.”

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The World’s Largest Man-Made Urban Forest

One of the most surprising facts about Johannesburg is its status as a “green” city. When the first settlers arrived, the Highveld was a barren, treeless grassland (savannah). To support the mining industry, millions of trees were imported and planted to provide timber for mine underground supports. Fast forward to the present day, and Johannesburg is widely considered the largest man-made urban forest in the world.

There are an estimated 10 million trees within the city limits. This includes 1.2 million trees on sidewalks and in parks, and over 4.8 million in private gardens. This forest is so dense that satellite images of the northern suburbs often resemble a tropical rainforest. The most iconic of these trees is the Jacaranda, which was imported from South America in the early 20th century. Every October and November, the city turns a vibrant shade of purple as thousands of Jacarandas bloom simultaneously. However, this “forest” also highlights the city’s historical inequality; during the Apartheid era, trees were predominantly planted in wealthy white suburbs, leaving townships like Soweto as dusty plains. In the last two decades, “Greening Soweto” initiatives have seen hundreds of thousands of trees planted to bridge this “green divide,” emphasizing the role of urban forestry in social justice and climate cooling.