When a city is failing as badly as Johannesburg, there is an understandable temptation to tear the whole thing up and start again. That temptation is particularly strong when it comes to the city’s municipal entities, many of which are struggling to deliver the services they were created to provide.

Johannesburg has 13 municipal entities, established as part of the iGoli 2002 reforms. The idea was relatively simple: the City of Johannesburg would set policy, tariffs and service standards, while specialist entities would run services, maintain infrastructure and manage the resources needed to do so.

Three of these entities matter above all for basic service delivery. City Power distributes electricity, Johannesburg Water is responsible for water and sanitation, and Pikitup collects the rubbish. More than two decades after the model was established, all three are in deep trouble.

It is therefore not difficult to see why some of those hoping to become Johannesburg’s next mayor argue that the municipal entity experiment has failed. If these entities cannot reliably provide the services they were created to deliver, why not bring their functions back into the City?

Changing the problems

This is not a simple issue. Collapsing the entities now risks conflating the structure in which the failure occurred with its causes. Moving a failing service into a City department does not repair infrastructure, recruit engineers, improve financial management, improve revenue collection, deter corruption or strengthen accountability. It simply changes where those problems sit.

It would also force an administration already struggling to perform its basic functions to absorb several large and technically demanding operations. Thousands of employees, contracts and assets would have to be integrated into the City, consuming management capacity desperately needed to restore basic services. The City will be managing the integration and subsequent restructuring issues for years after the November election.

All our research indicates that the best approach is to keep the major entities separate for now. The next administration should work with what it inherits and focus on getting the major service delivery entities working again.

City Power provides a good test of what is required. Its infrastructure backlog is estimated at R44.25 billion. Between July 2025 and March 2026, it recorded 2.1 million forced interruptions, with each customer experiencing an average of 20.6 hours without electricity. City Power is no longer managing its assets; it is managing their decline.

Start with leadership. City Power is a multibillion-rand electricity utility responsible for one of the most important infrastructure networks in the country’s economic hub. Yet it has been allowed to operate through years of leadership instability and severe shortages of technical skills.

Since 2017, CEOs have come and gone, with the utility spending long periods under acting leadership. It is back there again today, with an acting CEO at the helm. CFO posts have repeatedly been left vacant.

Vacant posts

In 2024/25, 44 percent of City Power’s professionally qualified posts were vacant. Only one member of the current board has an engineering qualification, and that is in metallurgical engineering, not electrical.

This is an extraordinary way to run an electricity utility. Fixing it starts at the top. The City, as shareholder, first needs to appoint a board with the technical, financial and operational expertise required to oversee a business of this scale.

That board must appoint a capable permanent CEO, assess the executive team and urgently fill critical gaps. Instead of lowering the bar for the CEO position, as it did in the last round of recruitment, City Power should keep it high and look as wide as possible for the electricity, engineering, financial and management expertise the entity needs, including by bringing in experienced specialists on fixed-term secondments.

Second, fix billing and revenue collection. At the end of June 2026, customers owed City Power around R13.3 billion. Meter reading was about 72 percent against a target of 98 percent, while more than 36 000 customer registers generated no bill during a billing cycle.

These are basic failures. City Power needs to know who its customers are, which meter belongs to which property and how much electricity each customer has used. Bills must be accurate, disputes resolved quickly and payment enforced against customers who can pay but do not, whoever they might be.

Collecting revenue is only half the problem. Electricity revenue has flowed into the City’s consolidated revenue pool, and funds have then been allocated back to City Power.

The City has committed to ring-fencing revenue, with 70 percent retained by the utility and 30 percent transferred to the City.

That is a step forward, but the basis for the split is opaque. City Power needs a transparent financial arrangement that reflects the costs of buying electricity, operating and maintaining the network, and investing in essential infrastructure.

Bring in experienced operators

Third, City Power cannot do all of this alone. Years of neglected infrastructure and shortages of technical and managerial skills cannot be reversed overnight. Johannesburg’s residents cannot wait years for the City to rebuild all that capacity internally.

Private firms can be brought in for meter reading, revenue protection, maintenance, loss reduction and specialist engineering work. For larger challenges, management and operations contracts could bring in experienced operators, while partnerships with private investors could mobilise capital and expertise for major infrastructure.

This is not an argument for indiscriminate outsourcing. Johannesburg already uses contractors extensively, sometimes badly.

Contracts need clear targets, transparent ownership, independent verification and consequences when providers fail to deliver. Payment should follow verified results.

Johannesburg can only make decisions about the future of its municipal entities from a position of institutional strength, not in the middle of a service delivery crisis.

The failures are known

For now, there should be no tolerance for business as usual. Johannesburg has allowed one of its most important utilities to deteriorate while leadership has churned, technical posts have stood empty, infrastructure has decayed, and billions of rand in revenue have gone uncollected.

The next administration will not be able to claim that it did not know what it inherited. The failures are known. So are many of the solutions. What is required now is competent leadership prepared to take control of City Power, make the difficult decisions needed to turn it around, and be held accountable for getting the lights back on reliably.

Ann Bernstein is executive director of the Centre for Development and Enterprise (CDE). This article is based on ‘Powering Joburg’s Turnaround’, the fourth report in Johannesburg Matters: Fixing South Africa’s Growth Engine, a new CDE series.

This article was published on News24