Municipalities owe billions of rands in charges to water boards across the country – and the debt could cause these bodies to implode, resulting in water shortages and taps drying up.
In the case of Rand Water, its financial viability is under severe threat, to the extent where it might be unable to fund future bulk water facilities or repair ageing infrastructure which wastes millions of litres of water a month.
The national department of water and sanitation is worried about the looming financial crisis with its water boards.
Department of water affairs spokesperson Sputnik Ratau says the nonpayment of the water debt to water boards could “negatively impact on their viability and capacity to do the work they are supposed to do”.
This week, a crisis was averted in Emfuleni municipality after talks with Rand Water about debt of more than R430 million.
The municipality had earlier not stuck to a payment agreement and Rand Water had restricted supply, resulting in water stoppages and shortages especially to high-lying areas.
This led to violent protests in the streets of communities in the area, which includes Vereeniging, Vanderbijlpark and Sebokeng.
There followed an extraordinary protest when the mayor of Emfuleni, Jacob Khawe, along with councillors and municipal officials, used their vehicles to blockade the entrance to Rand Water’s headquarters in Kliprivier, south of Johannesburg.
Rand Water spokesperson Gregg Mulzack said the utility feared a looming debt crisis which would affect all municipalities serviced by it.
“It is important to note that should Rand Water be placed in further and ongoing risk, the entity will be plunged into debt crisis which will impact all municipalities currently serviced by Rand Water and curtail the ability of Rand Water to finance the building of future bulk water infrastructure or even to undertake adequate maintenance of its very extensive network.”
This follows the intervention of Gauteng Premier David Makhura at Emfuleni last week.
According to Makhura, Khawe had acknowledged that there was a 40% reduction of water supply implemented by Rand Water and indicated that the Municipality had a payment agreement with Rand Water that covers current and historic debt and committed to oversee discipline of bulk payment “in a best possible way”.
In November last year, Water and Sanitation minister Nomvula Mokonyane said municipalities owed water boards R10.7bn and warned that water cuts would be instituted should the over 30 municipalities which were in arrears fail to pay its debts.
Mulzack said the water utility had reached a settlement with Emfuleni Municipality in December on the repayment of its fouryear debt, which had reached R431 789 101 by November.
Part of this settlement, he said, was that water would not be supplied to full capacity by Rand Water, in a bid to keep the monthly bill below R50 million a month.
After four days without water access in some areas, Khawe staged a protest outside Rand Water’s offices accusing it of cutting them off as punishment for non-payment of last month’s instalment.
But Mulzack said that this claim was unfounded.
“It is regrettable that in spite of ongoing negotiations and the prevailing spirit of co-operation and understanding on the part of Rand Water, the Emfuleni Local Municipality resorted to blockading the entrance to the gates … “It is wholly incorrect to say that such an action was in response to steps taken by Rand Water to reduce water supply due to non-payment on the part of the municipality.”
Water was eventually restored to the cut-off areas by Tuesday, apparently after a deal was brokered with the intervention of Makhura for the additional payment of R17 million in servicing its debt.