1. Service delivery

The South African Constitution states that municipalities have the responsibility to make sure that all citizens are provided with services to satisfy their basic needs.

In this guide, we will look at what those services are and the various ways in which municipalities can provide them in an affordable manner. We will also look at what role ordinary citizens can play to help municipalities decide what services to provide and how they will be provided.

Organisations can participate in many consultation and decision-making processes at local level – for example, ward committees, budget consultations, ward meetings, Integrated Development Planning Forums, and so on.

If you want to represent people and fight for their interests, it is very important to understand the level of services that are available, the ways services can be delivered and the choices for how to deliver services that your municipality faces.

What is a municipal service?

Municipalities must make sure that people in their areas have at least the basic services they need. There are a large number of services that they provide, the most important of which are:

* Water supply
* Sewage collection and disposal
* Refuse removal
* Electricity and gas supply
* Municipal health services
* Municipal roads and storm water drainage
* Street lighting
* Municipal parks and recreation

These services have a direct and immediate effect on the quality of the lives of the people in that community. For example, if the water that is provided is of a poor quality or refuse is not collected regularly, it will contribute to the creation of unhealthy and unsafe living environments. Poor services can also make it difficult to attract business or industry to an area and will limit job opportunities for residents.

The lack of delivery of sustainable services can be attributed to:

* The lack of clarification of roles and responsibilities of stakeholders in provision of services.
* The lack of guidelines on municipal infrastructure and services support.
* The lack of organisational capacity of municipalities especially in specialist fields such as engineering and accounting.
* The lack of clear common principles on sustainable service delivery.

2. Revenue management in improving service delivery

Revenue management concept integrates the financial management system (FMS), document management system (DMS), geographical information system (GIS), customer relations management system (CRM), performance management system (PMS) and revenue management system (RMS).

This in a nutshell ensures that accurate, valid and complete basic services information is kept together with the narration of geographical points (DMS&GIS). From that information, accurate, complete and valid bills are generated and sent out to consumers. Payments are recorded when received (FMS). Consumer complaints/faults are all logged (CRM) and timeously actioned (CRM).

Improved service delivery in revenue management concept means that the following are in place:

* Dispensing free basic services accurately with audit trail;
* Accurate and complete customer readings;
* Avoidance of theft;
* Automatic meter reading;
* Systems are available 24 hours per day close to the customer;
* Systems are in close proximity to the customer;
* Direct online vending of water, electricity and other services with no human intervention on transactions;
* Automatic connection and disconnection of meters;
* Accurate logging of complaints, faults on the customer relations management system;
* Effective and efficient delivery of services ie, timeous correction of faults when the class has been logged;
* Accurate, valid and complete records kept on the document management system;
* Easy access to information when required;
* Accurate, valid and complete financial records kept on the financial system (billing) to ensure correct bills are sent to the correct customers and payments are attached to the correct customers;
* Accurate, valid and complete records kept on the geographical information and easy access to ensure that when the call/complaint/fault has been logged, the geographical information system can point the directions as to where exactly the area is with a problem;
* Accurate, valid and complete performance information kept on the performance management system to ensure improved performance monitoring; and
* Profiling of load data per customer.

3. The reality of our metering environment

Access to electricity then became a socio-economic driven resource where private legal entities wanted to have access to electricity to better their lifestyle.

Ultimately, electricity became a political driven resource where it was seen as a basic service that every legal entity in South Africa is entitled to.

The fact that certain legal entities cannot afford electricity led to the Electricity Basic Support Services Tariff (EBSST), which implies that households that cannot afford access to electricity will receive a certain amount of free electricity per month.

The fact that electricity (and water) became a politically driven resource implies that credit control procedures are not as simple as denying access to the service in the case of non-payment.

The problem of non-payment was then addressed in 1990 by the introduction of the one-way pre-payment meter. It was believed that if the consumer will buy electricity upfront and an electricity-dispensing device will then dispense the resource only when credit is available on the device.

These devices were installed in great numbers and Eskom alone has installed over 2.9 million of these one-way pre-payment meters in South Africa to date. The reality that struck the metering industry was that this technology alone was not the answer to non-payment of services, as meter installations were tampered with to get unmetered access to the distribution network.

The issue of non-payment required a management intervention rather than a technology intervention. Today one will find that well-managed metering systems have management procedures in place that monitor the purchase patterns of one-way pre-payment meters.

If one would then look at conventional and one-way pre-payment meters, one would find that there are two primary aspects to these meter installations that need to be managed.

In both conventional and one-way pre-payment meter installations, one needs to manage the revenue derived from the installation as well as the delivery of the actual service.

One may ask if enterprise resource planning (ERP) systems will not bridge this gap. However, on the one hand, the reality is that only a select few utilities in South Africa can afford the luxury of such systems. On the other hand, these systems may lack the required functionality.

In addition to the problem of fragmented systems, there is also a lack of data warehousing on metering systems. This is necessary to not only benchmark the integrity of the data, but also to produce good quality information to management that should influence decision-making.

4. Experience in selecting a vendor

Invitation to bid for a revenue management system is sent to service providers. Responses are received from service providers that would provide you with:

* Different approaches and methodologies
* Different capabilities
* Different experience and case studies
* Different monitoring system
* Different financial strength

Evaluation committees should be fair and unbiased towards all responses. Short-listing of three to five suitable service providers will be made. This is based on:

* How best they have demonstrated understanding of the tender requirements.
* How best they demonstrated their methodology and approach and if it will achieve the objectives of the company as whole.
* How cost-effective their system is.
* Benefits to be received from implementation justifying the expenditure to be incurred.
* Experience they have gathered and case studies.

The bidders will be invited for a presentation and site visits will be done. The best suitable bidder will then be selected. It is very hard to select the best suitable bidder where solutions are both good and approaches are both good. Thorough analysis has to be done to keep the evaluation process fair and unbiased.

5. What to look for in addressing electricity theft

Eskom’s “non-technical losses” (electricity revenue lost as a result of theft, bypassing of meters, fraud, etc) amounted to 5 105GWh for the financial year ending 31 March 2007.

Electricity theft and non-payment for municipal distributors is estimated to be 6 829GWh per annum.

Based on Eskom’s average residential selling price of about R0.42 per kWh, the impact of lost revenue of the electricity distribution industry due to theft and unpaid electricity of 12 934GWh per annum is about R5.34 billion per annum.

There is one town in Gauteng that had a similar problem of high tempering of electricity. The smart revenue management system was implemented and it enhanced real-time tamper detection and alarming of out-of-parameter usage that might indicate theft, including:

* Tamper alarm on meter kiosk and cell
* Concentrator
* No communication to display/24 hrs
* Connected but no units measured/24 hrs
* Disconnected but units measured
* Client disconnected
* Meter protect circuit breaker tripped
* Meter tamper


* No tampering
* Revenue enhancement from R250K to R3 million per month

Whenever residents try to tamper with the system, it reports immediately and it identifies the meter where tempering is done. Arrests are made and penalties are imposed when caught tempering.

6. What technology can do for you?

* Improves income stream
* Streamlines operation
* Powerful communications tool
* Improves customer services
* Improves service delivery
* Solves problems relating to non-technical losses

* Non-payment
* Meters bypassed/tempering
* Meter readings not done every month
* Billing not matching financial system?
* Customers complain about reading estimations
* Change from conventional to prepaid requires change in meter installation
* Cut-off done manually, if done at all
* Unable to control load (demand response)
* Unable to do controlled load shedding at metering level
* Lost tokens or meter codes for prepayment meter
* Cannot implement TOU for residential customers?
* Inability to account for meters moved/removed by customers and service personnel

Demand response:

* Municipal can shed load easily (individual, group or everybody) built into the system
* Reduce Load (Individual, group or everybody) – built into the system
* Can switch off appliances such as Air-conditioning and geysers (Individual, group or everybody) – optional load switches
* Application and promulgation of TOU tariff – built into the system
* Will be able to show consumer CO2 emissions saved by demand response

7. What vandalism can do to your electricity systems

People can vandalise the electricity system, ie, kiosks and mini-substations. The following serves as an example in one of the municipality’s industrial areas: people had connections made to substations and consumed electricity for free.

Refurbishments made:

To improve the system, improve service delivery and enhance revenue, the following were done:

a) Rehabilitation of the mini-substation and kiosk structures.
b) Rewiring and replacing faulty circuit breakers in the vandalised kiosks.
c) Decommissioning unused equipment and cables.
d) Removing overgrown vegetation.
e) Pest control.
f) Refurbish all structures

8. Project management role in ensuring project management success:

Project management plays a crucial role in ensuring project success; the following, among others, are vital parts of the project management process:

* Ensure that work is performed in accordance with the agreed project plan.

* Develop a business case.
* Ensure progress reports are submitted on time.
* Risks associated with the projects are earlier identified, rated and mitigated/controlled or accepted if possible.
* Ensure time management, quality management and communication management in the project.
* Ensure project meetings and steering committees are taking place timeously for discussion of issues, progress and way forward.

9. Taking pride

We pride ourselves in providing revenue management systems as an end-to-end solution. We pride ourselves in our involvement within the public and private sectors of South Africa. We are totally committed in supporting both private and public organisations in ensuring successful revenue management systems.

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