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25 FEBRUARY 2011.

KwaDukuza Municipality has encountered challenges with regard to its power supply.
The situation has led to total dissatisfaction in terms of the quality of service and
quality of supply. In many instances these interruptions have been caused by cable
theft, overload situations and nuisance tripping.

It must also be noted that KwaDukuza has experienced growth over the past few years
which has increased the demand for supply imposed on the existing electricity
networks considerably. It must further be noted that the infrastructure is aging and
cannot meet the demands of this phenomenal growth.

The situation demands that the Municipality must upgrade its networks in order to
stabilise and improve the quality and firmness of supply. The upgrades which will be
undertaken are in line with the findings of the Energy Master Plan Network Study
conducted by NET Group.

Responding to the infrastructure challenges identified in the Master Plan, the
Municipality will undertake the following upgrades:

For the Southern network the Municipality will upgrade the Shakaskraall/Hilltop/Business
Park 33 kV Overhead line and associated network equipment from 19MVA capacity to
30MVA capacity. This will enable the Ballito and surrounding areas load to be transferred
over to the Shakaskraal substation via the Hilltop/Imbonini/Chakasrock supply circuit , when
overload conditions prevail due to cable theft and/or storm damage occurring causing a loss
of supply from the Driefontein feeder or Collisheen feeders each respectively.

Upgrading of this network together with the installation of a 33 kV Circuit Breaker and
protection unit will cost Council about R8, 970,000. The cost is catered for in the current
financial year.

There is a need for Council to secure a firm 30 MVA capacity (Premium Supply) from
ESKOM via the ESKOM DRIEFONTEIN substation from which EThekwini Metro will
shortly cease to take supply.

The implementation of this initiative is solely dependent on Council obtaining the existing
overhead line servitude rights from EThekwini in order to be able to transmit supply from
Driefontein Sub Station into Council’s supply area to connect into the proposed NEW 33/11
kV substation which is to be constructed adjacent to the proposed new ESKOM 132/33 kV
DUKUZA substation to be established in the vicinity of Compensation Station.

This project has been delayed whilst awaiting the outcome of Council’s application to
eThekwini requesting that the overhead line servitudes and the existing infrastructure within
the servitude be ceded over to KwaDukuza Municipality at no charge.
The availability of this firm 30 MVA capacity will provide sufficient bulk supply capacity
leading to the medium term to provide for the degree of firmness of supply required as well as
enable a host of alternative network switching configurations to satisfy contingency options
under fault and load transfer conditions.

In the period 2012/2013 the 2 x 10 MVA transformers will be installed at this substation by
which time load growth in the Umhlali Golf Estate, Caledon Estate, VMH Estate, Manor
Estate, Bogmore Estate and Surrounding areas will justify this upgrade. The cost estimate for
this upgrade is R33, 700,000. In the current Budget an amount of R23, 700, 00 is available
and the balance has been made available in the 2010/2011 Adjustment Budget.

To address the overload situation at Shakas Rock substation during peak season provision has
been made on the approved 2010/2011 Capex budget to install a third 10 MVA Transformer
at Shakas Rock substation. The existing 2x 10 MVA transformers provide for a firm 10 MVA
supply capacity. However during peak periods the load on this substation increases to 14
MVA at which point the supply then becomes unfirm as the loss of one transformer will
overload the remaining transformer excessively.

Introduction of the third transformer will increase the capacity to 20 MVA firm and 30 MVA
unfirm. This will address the unfirm state of supply during peak season. However the
remaining spare capacity will not be beneficial to relieving overloaded distribution networks
to the South in the Salt Rock, Sheffield Beach areas.

It has been identified from the Energy Master Plan/Network Planning exercise that it will be
of far greater benefit from a cost and technical perspective for Council to establish the
proposed New Sheffield 33/11 kV substation which is central to the emerging growth node.
Upon establishment of Sheffield substation it shall be possible to transfer at least 5mva of
existing load from Shakas Rock substation over to the new Sheffield substation which will
also reinstate the firm 10 MVA capability at Shakas Rock substation during peak season and
also release load off the Shakaskraal, Hilltop, Imbonini 33 kV circuit.

It was resolved at the meeting that was held on 20/01/2011, to install the said transformer
within the newly planned Sheffield Substation.

Council, together with five developers, entered into what is known as the SHEFFIELD BULK
SUPPLY JOINT VENTURE. Consequently these developers entered into Services
Agreements with Council and agreed that they shall, collectively on a pro-rata basis, be
jointly responsible for payment of the costs to provide 33kv cables and related switchgear
between Shakaskraal 33 kV substation and the proposed new Sheffield sub as well as the
switch room and 11 kV switch panels. The cost estimate of this joint venture is R 23,422,750.

Most recently one of the developers has withdrawn from the Joint Venture, notwithstanding
that a letter of undertaking was signed by the Chairman and the Managing Director of the

This has now stalled the Joint Venture initiative as the remaining developers who are all still
keen to participate in the Sheffield Bulk Supply Joint Venture are, in the current economic
climate, unable to increase their contributions proportionately in order to make up for the

In view of the fact the Council will benefit capacity for its own network needs from the 33 kV
cables to be installed between Shakaskraal Substation and Sheffield Substation, it is deemed
competent and proper and in Council’s best interest, to contribute R4,000,000 to make up for
the shortfall arising from the withdrawal of one of these partners.
This will allow that the remaining developers participating in the Sheffield Bulk Supply Joint
Venture will collectively contribute the estimated sum of R19, 422,750.00 towards the costs
of establishing the Sheffield substation.

The Council contribution to this substation will fund the 2 x 10 MVA transformers, voltage
regulation control gear, 33 kV circuit breakers, and establishment of the 33kv bus bar
arrangement in the sub station yard area at an estimated cost of R 35,537,890.

The lead time required for manufacture of these transformers will allow that payment upon
delivery will most likely take place in 2012.

Council’s total estimated contribution toward the establishment of a firm 10 MVA substation
inclusive of contribution towards 33 kV cable cost (R4, 000,000) will be R39, 537,890.

To fully utilise the available capacity and relieve load from Shakas Rock substation as well as
reinforce supply to the far end of Sheffield Beach will also necessitate the installation of a
suitably rated dedicated 11 kV feeder cable to connect between Sheffield Substation and Villa
Royale Switch room at an estimated cost of R6 800 000.

Villa Royale Switch room is interconnected with Hewitt Road Switch room at Salt Rock
which in turn is interconnected with Shakas Rock 33/11 kV substation.

The benefit to be derived from interconnecting the two firm 10 MVA substations will be the
capability of transferring network load between major sub stations under emergency
conditions thus allowing for a greater security of supply. The estimated cost for this project is
R65, 760, 640.

 Council has also resolved to establish the new ESKOM/KDM intake substation to be known
as Dukuza 132/33 kV substation within the next two to three years to cater for the future load
growth. The estimated cost for this substation, together with its 2x10 MVA transformers and
associated voltage regulation and ancillary equipment, is R57, 100,000.

Our assessment of the infrastructure has determined that the age and condition of the majority
of DC-Battery Charges and Batteries installed at major substations and switch rooms now
poses a great risk to the correct functioning of equipment protective devices. The DC-supply
is used to energize the protection relays and control the tripping/ closing coils on all the 33
and 11 kV breakers.

The failure of network protection systems and devices to operate correctly and within critical
time parameters has the potential of causing catastrophic failure of very costly network assets,
aside from safety compliance issues as legislated in the ACT. The upgrading of the DC
Supply Batteries and charges will cost Council about R500, 000. Provision has been made in
the 2010/2011 Adjustment Budget in this regard.

There is a need for calibration of all 33 and 11 kV breakers protection relays. The
phenomenal growth that KwaDukuza Municipality has experienced over the past three years
has caused overload situations on various 33KV feeders. The said conditions have caused
ESKOM supply/protection relays to operate and caused the ESKOM supply to trip. On many
occasions faults have passed through Council’s protective devices with resultant fault trip on
ESKOM supply side.

The Electrical Department has identified the need for all the protection relays within
Council’s electrical supply area of jurisdiction to be re-calibrated, to ensure that the correct
feeder breakers trip during overload and fault conditions which will also prevent nuisance
tripping or ESKOM supply to trip. Provision of an estimated amount of R250, 000 has been
made on the 2010/2011 Adjustments Budget to cater for this cost.

Council also needs to replace the stolen 11KV cables in order to stabilise the network. Power
outages caused by cable theft have resulted in overload situations, nuisance tripping and cold
water complaints by customers within the Ballito/Zimbali, Alberlito Hospital, Malls and
surrounding areas.

This has become a critical requirement due to the reason that the upgrade of the N2 – P445
interchange by SANRAL will necessitate the removal, either on a temporary basis or
permanent basis, the existing 11kV underground cable circuit which presently links the
network east of the N2 supplied via Ballito Business Park sub station and the west side of the
N2 supplied via Imbonini Business Park substation. To replace the stolen cables will cost
Council in the magnitude of about R5, 000,000. Provision for this cost is catered for in the
201/2011 Adjustment Budget.

In the Northern network Council will have to undertake upgrading initiatives as well.
Customer growth within the Northern network requires the Municipality to upgrade the 33 kV
network between ESKOM/Stanger point of supply and Glenhills substation, from 19 MVA to
30 MVA current carrying capacity. This upgrade is essential so as to provide an alternate 33
kV supply source to the Lavoipierre substation, via the ring circuit connecting through
Industrial Area substation back to Glenhills substation. In the event the cables between Point
of Supply Intake substation and Lavoipierre substation fail the existing Oak conductor (19
MVA) connected between Glenhills and ESKOM Point of Supply Intake substation is not
sufficiently rated to carry the transferred load. It is therefore essential that this conductor be
upgraded to Poplar conductor (30 MVA) capacity. This will cost Council an estimated
amount of R 1,760,000

In order to release excessive load on 11 kV overhead lines/ feeders supplied from Glenhills
substation, it has been established that a new 33/11 kV substation must be constructed in the
Groutville/Priority One area as a high priority. The estimated cost for the construction of the
new Groutville/Priority One substation is R14, 500,000. The current Budget makes provision
for R11, 730,000 in this regard.

To release excessive load on 11 kV overhead lines/ feeders, supplied from Glenhills
substation, it has been identified that as an interim measure, until such time that the new
Groutville/Priority One 33/11 kV substation has been established, the 33 kV overhead line
feeder between Shakaskraal substation and Stanger Point of Supply, be changed over from 33
kV supply to 11 kV supply and that the said overhead line be connected via 11 kV cables into
the Groutville/Priority One Switching Station.

This network upgrade will provide for greater security of supply to the Priority One area and
will also serve as a limited back up supply to Glenhills substation in the event of a
transformer failure.

In the event of failure at Glenhills substation this interconnector 11 kV supply will also
provide an alternate supply source to the uMvoti Water Works. Council has made provision
for this process of down rating the 33 kV to 11 Kv and allocated R400, 000 in its 2010/2011
Adjustment Budget.

To release excessive load on the existing 11 kV feeder cables, supplied from Lavoipierre
Substation, the Network Master Study confirms that new 11 kV Switching Stations (Nodal
Switch Room), require to be established/constructed, within the KwaDukuza CBD area,
Saunders street Reservoir and Hesto Harnesses areas.
It is proposed to ultimately interconnect the CBD Switch room via Saunders Street switch
room with Glenhills substation.

This arrangement will provide for a complete firm ring system interconnecting between
Lavoipierre sub station and Glenhills substation, thus providing for a high level of supply
flexibility. This exercise will cost Council an estimated amount of R31, 500,000. Provision on
the current Budget stands at R24, 460,000

The Northern network also needs the upgrading of the DC Supply: Batteries and Chargers.
Accordingly, Council has made provision of R500, 000 in the Adjustment Budget to cater for
this cost.

An amount of R250, 000 has been made available in the Adjustment Budget for the
calibration of all protection relays in the Northern network.


With regard to roads and storm water, the Roads and Storm water Master Plan was approved
by Council in November 2010. The critical areas identified in the Master Plan are
maintenance of 449 kilometres of roads and construction of new roads. The Master Plan has
determined that an estimated amount of R58 million is required in the new financial year in
order to undertake the following:

          Road maintenance
          Road upgrades
          Diversion of storm water channels from houses
          Construction of new storm water channels
          Construction of mid block storm water channels
          Upgrade to gravel roads which includes construction, regravelling, shaping and
          cutting of existing roads and preparation for tarring, subject to the availability of MIG
It is estimated that over a five-year period this will require about R825 million to undertake
this kind of work in the current configuration of our Municipal boundaries. That is certain to
change with new wards which have not been under KwaDukuza Municipal area being
integrated into KwaDukuza Municipality.


Council intended to respond to the call by Minster Ndebele to fix potholes from the 14th to the
28th February 2011. However, the national truck drivers strike hampered progress as there
were shortages of emulsion for pothole mix. During this period Nakekela Project availed its
workforce to prepare potholes so that they can be fixed once material becomes available.

As the strike has been called off more pothole mix was received on the 23rd February. A
request has been made by the Civil Department for an extension of the planned overtime for
two more weeks. During the weekend of the 26 and 27 February the Civil Department will
cover 186 square metres of potholes. The financial implications and total square metres
covered will be known once the project has been completed.


The Municipality has received a clean audit opinion from the Auditor-General for the year
ended 30 June 2010. We acknowledge the emphasis of matters that the Auditor-General has
brought to our attention.
On the issue of the irregular expenditure we wish to restate that the R33 million in question
was not embezzled. This amount of money was spent on contracts which we have with the
service providers. The only thing that makes the expenditure irregular is that the contracts
were awarded to suppliers having been advertised in a less than thirty days period, in
contravention of the requirements as outlined in the Municipal Supply Chain Management
Regulations. In order to address such shortcomings, the disclosure requirements in the
relevant policies and legislation will be complied with. To ensure that this happens, all
policies and regulations will be reviewed and a disclosure check list compiled.

Issued by the office of the Mayor

For more information contact Sifiso Zulu on 032 437 5015/ 083 370 2840