Outstanding: Rand Water owed huge amounts by errant municipalities

If Rand Water has not been paid the R4.1 billion owed to it by municipalities in Gauteng, Mpumalanga and Free State, the water utility has threatened legal action to force them to pay.

Of the money owing, R2.9 billion is owed by Gauteng municipalities, R1.2 billion from Mpumalanga municipalities and a total of R61 million from Free State municipalities.

Rand Water said it was deeply concerned about the escalating debts caused by the municipalities’ failure to honour their bulk water purchase agreements and debt settlement arrangements with it. Rand Water is a self-funding utility that does not receive government bailouts.

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The entity said: “This situation highly destabilises Rand Water’s financial position and poses a direct threat to its medium- and long-term sustainability.

“Rand Water operates without any form of allocation from the national fiscus and relies solely on funds collected from its customers, primarily municipalities,” it stated.

The entity slammed those municipalities that had engaged in “endless and fruitless negotiations when it is clear that they have no intention to pay”.

“Despite our relentless efforts to accommodate this ongoing pattern of nonpayment through bilateral engagements and participation in intergovernmental relations forums, we have regrettably reached a stalemate,” it said.

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Rand Water spokesperson Makenosi Maroo said: “We want to enter into an agreement so that [municipalities] commit they will pay Rand Water, even if it means an agreement over a period of time,” she said. “We are really hoping they will come to the party.”

Maroo said if such agreements failed, then the next phase would be to go the legal route.

The nonperforming municipalities that contributed to the overdue debt include:

• Lesedi local municipality in Gauteng – owes R48 476 180.41;

• Rand West City local municipality in Gauteng – owes R483 336 982.72;

• Merafong City local municipality in Gauteng – owes R763 737 343.74;

• Victor Khanye local municipality in Mpumalanga – owes R356 668 518.06; and

• Ngwathe local municipality in Free State owes exactly R61 407 584.18

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Maroo said the ones that were outlined were problematic. “Joburg Water is paying. We are happy with Ekurhuleni and with Tshwane and Emfuleni, we are working via the agreements,” she said.

If Rand Water is placed under further financial risk, it will be plunged into a debt crisis which will impact all municipalities serviced by Rand Water and restrict its ability to finance the construction of bulk water infrastructure.

Meanwhile, Joburg Water said it had observed a high demand across the system yesterday. This had affected the bulk supply and Rand Water reservoirs remained low.

The situation resulted in a major reservoir at Illovo in Sandton running dry. Joburg Water said the Sandton system remained under pressure with most reservoirs being at low levels.

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“The Illovo reservoir is critically low, while the tower is empty. Residents in this supply zone have poor pressure to no water and water tankers have been deployed to the affected areas,” it said.

“As a mitigation strategy, Joburg Water has closed the outlet of the reservoir to build capacity. “The Morningside, Linbro Park, Bryanston and Marlboro reservoirs are currently low but are supplying normally.

“High-lying areas in the Bryanston supply zone may experience low pressure to no water,” it said. Asked about why this had happened, Joburg Water failed to provide an answer.