On Thursday, 5 November 2015, Councillor Matshidiso Mfikoe, the City of Joburg’s Member of the Mayoral Committee for Environmental and Infrastructure Services Department announced that the finances of Pikitup, the City of Joburg’s Waste Management Entity have finally reached a healthy position.
For 12 years since its inception, Pikitup has had a legacy of incurring trading losses consistently on a year-on-year basis owing to financial and operational mismanagement. This resulted in the company becoming insolvent and with the years the insolvency worsened as the accumulated deficit increased. The insolvency peaked at an accumulated deficit of R432 million in February 2013 and there were immense expectations and pressure on the new leadership of incoming Managing Director Amanda Nair and Financial Director Suren Maharaj to “stop the bleeding”, stabilise and financially turnaround the company.
A five (5) year financial recovery plan was immediately formulated and implemented focusing on maximising revenues from the domestic and commercial businesses and realizing cost savings through optimising the company’s fleet, reducing overtime, improving the collection of revenue and providing for the impairment of debt. This coupled with implementing best practice financial management has resulted in the company becoming solvent in half the initial envisaged time of five years. In just two and a half years the company achieved an overall surplus of R613 million, with an accumulated surplus of R181 million!
Cllr Matshidiso Mfikoe, commended Pikitup for honouring the Mayoral Priorities by performing exceptionally well during the 2014/2015 financial year. “This is truly a remarkable achievement and one of the most successful financial turnaround strategies of recent times in the public sector in South Africa!” says Cllr Mfikoe.
The business of managing waste used to be straightforward, a generation ago. Today, Pikitup is reinventing its business model and reconsidering the nature of waste management. We are now progressing towards a City that has made a transition from where waste is traditionally collected, transported and disposed; to a City that has moved its strategy in the upstream of the waste management hierarchy, by prioritizing waste avoidance and minimization. The entity is implementing safe waste transportation, cleaner waste treatment, and disposal as a last resort when managing all forms of waste.
Over and above ensuring the overall cleanliness of the City’s streets, open spaces and public areas, Pikitup continues with its targeted efforts to reduce waste going to landfills through its waste minimisation projects, including the roll out of separation at source and contributing to food security.
The entity continues to address the imperatives of the Growth and Development Strategy (GDS 2040) which respond to the global, national and regional challenges of climate change, resource constraints, the triple challenge of poverty, unemployment, and inequality, as well as improving the overall governance and compliance environment within the company.
Some of the key strategic interventions implemented include, but are not limited to:
- Improving efficiencies in order to achieve maximum results within limited resources;
Increase productivity – doing more with less and managing resources effectively, including landfill airspace, human capital, budget, and others;
- Developing measurable output indicators, which address the desired outcomes in the GDS 2040;
- Constantly improving on Pikitup’s integrated approach to ensure co-ordination of programmes and to work towards greater impact, working with all departments and entities within the City;
- Continuously taking steps to maintain and achieve stability of the economic base of Pikitup, and to prepare for long term financial viability; and
- Ensuring that Pikitup continuously adapts and aligns itself with best international practice in maintaining a full cycle approach towards waste management and addressing various other environmental challenges faced by the City.
Various other achievements have been noted, in addition to the financial performance. Waste diverted from landfills increase with 160% from the previous year and landfill compliance increased to 90.5%. Pikitup was also one of the first entities of the City of Johannesburg to start implementation of the Jozi@Work programme, a flagship project that aims to create jobs and entrepreneurs in the waste sector. Pikitup in partnership with various departments and entities in the City of Johannesburg as well as private institutions, successfully carried out various Clean-up initiatives across the City of Johannesburg which aimed to rid the city of illegal dumping hotspots and to promote a Clean City vision for a litter-free Johannesburg, with an aesthetically attractive environment and with effective waste removal services. Pikitup also hosted the Waste Summit during the year under review where government, business, academic institutions, private sector, civil society and labour amongst others, shared ideas and proposed solutions to address the challenges in the waste sector.
“We are also still aware of the areas where improvement is required and the Board is working with the executive management team to ensure that these areas are addressed. One such area that was identified was general communication and stakeholder involvement. This has been identified as a key intervention area going forward and will receive particular attention. Various interventions have already started to ensure that we affect a behaviour change through the partnership with business, civil society and labour. The support from the city leadership and the shareholder unit continues to provide guidance and direction relating to all aspects of the business and matters of governance and the Service Delivery Agreement was concluded with the shareholder. The City Manager’s office has provided the distinctive and direct leadership, when it is really needed by the company.” Concluded, Cllr Mfikoe.
ISSUED BY: PIKITUP, THE CITY OF JOBURG’S WASTE MANAGEMENT ENTITY
Media Enquiries: Mr Anda Mbikwana and Mr Jacky Mashapu Office of the MMC Pikitup Spokesperson
Tel: 011 587 4309/ Cell: 082 805 7088 and Tel: 087 357 1193/ Cell: 079 506 0568