NEWS RELEASE                                                                                                      6 June 2001

FREE BASIC ELECTRICITY IN CAPE TOWN COMES WITH THE WORLD’S LARGEST SINGLE BASED PREPAID VENDING SYSTEM

When free basic electricity comes on stream in Cape Town on 1 July, it will be underpinned by what is believed to be the largest single based prepaid electricity vending system in the world.

Prepayment of electricity is seen as both a convenience to the consumer and a guarantee for the Council that consumers don’t run into arrears with their accounts. This lends financial viability to one of the boldest initiatives ever undertaken in Cape Town. Consumers are empowered to manage their consumption and financial outlay with pre-payment for electricity.

On 1 July the City of Cape Town Council will become the first metropolitan council to start providing 20 kWh of free electricity to all consumers of municipally supplied electricity. A highly sophisticated prepaid vending system that includes 230 000 prepayment meters and 135 vending outlets enabled the City to proceed speedily with the implementation of its initiative.

Some R35 million of electricity is sold through vending machines each month. The average transaction value is R32 and the average consumer buys electricity every five days.

To accommodate the provision of free electricity, the Council has upgraded the vending system in Oostenberg and combined it with that of Helderberg. In the Tygerberg administration area, 3 000 magnetic card prepayment meters are being replaced by “keypad” meters so that consumers in that area can receive their free monthly allocation.

“We in South Africa have possibly the most advanced prepayment systems in the world and Cape Town certainly has the largest single based vending system in South Africa,” said the Council’s Executive Committee member responsible for Trading Services, Councillor David Erleigh.

“The Council will soon make a tender enquiry for a new on-line vending system for the whole metropole, which will allow consumers to buy their electricity at any vending outlet of their choice. This could include shopping outlets and even the internet.”

He said the present 135 vending machines processed more than a million transactions a month. “Clearly prepayment is preferred by both consumers and the Council because consumers know how much electricity they can afford and the prepayment system helps them not to exceed their budget.”

Free basic electricity will lend a helping hand to all smaller consumers, and especially to the poorest of the poor.

“Those who use vending machines for prepaid electricity will, of course, also qualify for the free allocation. The DA promised free electricity from July and the City of Cape Town will deliver on time as promised,” said Councillor Erleigh.

The Executive Committee of council has approved a pilot project to evaluate the rapidly developing technology for prepaid water meters. The pilot project will assess whether it would be beneficial to consumers and council to move to a prepaid water meter system on a similar basis to the highly successful prepaid electricity system.

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