The COJ announced that 22 arrests were made relating to charges of corruption, fraud, collusion and tampering with the city’s revenue collection system.
“We have identified a few people, some of them are employees of City Power and our revenue’s department. A lot of them are also private citizens and private contractors to the city,” said Parks Tau, Executive Mayor of the COJ.
He added that the group colluded to defraud the city of an estimated 200 million rand.
To date, the city has recovered 107 million rand from the losses which has already been accounted for in the city’s balance sheet and will not impact businesses’ or residents’ accounts.
“Essentially what people do is they go to individual rate payers and entice them to change their meters into fraudulent meters. These meters would be installed as prepaid meters, especially for large power users. In fact, the regulations do not allow for prepaid meters for large power users,”
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COJ officials initially became suspicious after they noticed electricity consumption levels dropping significantly among certain property owners.
“It is a scheme designed to defraud the city because in reality, those of us who are paying are actually paying to subsidise the people who are using the energy freely,” he said.
Property owners who had set up the fraudulent meters were only paying between 10 and 15 per cent of their actual electricity costs.
Tau added that over the next two weeks, investigations will continue to be carried out into certain shopping centres, large estates and businesses that are suspected to be part of the scheme.
Currently, the COJ are working on a number of initiatives to the turn the city around, including a comprehensive financial strategy that will see around one billion rand in capital infrastructure investment injected into the COJ.
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The funds will be used to improve services to communities as well as renovate ageing infrastructure.
“We have been able to push up our capital budget from 3.6 billion rand to 10.4 billion rand. We estimated that annually, we will be spending in excess of 10 billion rand in capital investment per capita. This would be the highest capital investment programme in the country,” he said.
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