For The People

Municipalities Owe R8,6bn to Water Boards

Water debt of municipalities is on the rise and currently stands at R8,6bn. The Department of Water and Sanitation told Members of Parliament (MP’s) that the amount owed by municipalities in addition to the R4,5bn owed by the Water Boards to the Department of Water and Sanitation amount to an outstanding debt of R13,1bn.

Regardless of the department’s interventions there are no signs of improvement. On the contrary, water debt by municipalities increased by a monstrous R 1,7bn between March and September. The In-year Management, Monitoring and Reporting System for Local Government (IYM), a National Treasury initiative, revealed earlier this year that Northern Cape Municipalities’ owe R695m for bulk water. This figure is believed to have escalated well above R700m considering that a number of municipalities in the province can hardly keep the lights on.

According to the Department of Water and Sanitation the huge outstanding debt can be ruinous for the country’s water resources, because the lack of funds has a negative impact “for the necessary refurbishment of water infrastructure, including dam infrastructure, and to deal with important issues such as water pollution.”

The financial sustainability of the water boards may be under threat due to the outstanding debt Paul Nel of the Inter Ministerial Task Team stated during the Department’s report to the Water and Sanitation portfolio committee. He pointed out that national and provincial government departments are also culprits and a portion of the debt is owed by them. Botshelo Water and Bushbuckridge Water have already been disestablished as water boards due to non-payment by municipalities.

It was reported that the inter-ministerial task team, established in December 2017 to deal with municipalities’ non-payment for electricity, had been given an additional mandate to include non-payment of water bills.

It appears that the same municipalities that owe Eskom are the same municipalities that owe the water boards, indicative of an obvious but often ignored problem of unsustainable municipalities.

It was agreed that that an advisory panel of water experts be set up and the task team was in the process of identifying experts and establishing terms of reference for the advisory panel.

The department issued 63 summonses to municipalities out of which seven were taken to court and the department emerged victorious. That saw 47 municipalities start paying their debts. Water restrictions in non-paying municipalities last December have “worked a bit”, but are not a long-term solution, Nel said. National Treasury representative Sadesh Ramjathan, director for local government budget allocation, said, legally, grant money could not be used for operational matters in municipalities. “The problems are systemic and structural and need to be resolved. There are root causes for debt escalating,” Ramjathan said.

He said National Treasury had issued an instruction to all financial officers in government departments that they pay their debts within 30 days. He continued that failure by the financial officers to abide by the instruction, each defaulting financial officer could face a case of financial mismanagement.

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