‘Action must be taken’: MPs warned that 8 million South Africans could soon be without water

Large parts of South Africa could soon be without water due to mounting municipal debt, warns Parliament’s Portfolio Committee on Water and Sanitation chairperson Leonard Jones Basson.

Officials from the Department of Water and Sanitation as well as National Treasury briefed the committee on Tuesday about the measures being taken to prevent various water boards from falling into bankruptcy.

It was revealed that the country is just months away from a devastating water crisis, with municipalities owing a staggering R22.36 billion to water boards as of June 2024.

The debt, accumulated since 2019, has increased by 151% to date.

Water boards could face bankruptcy within the next six to 12 months due to insufficient cash to pay for operating activities. The portfolio committee was told that Vaal Central Water and Magalies Water are of most concern.

Water boards owed billions by municipalities

South Africa’s municipalities are facing significant financial challenges, and are struggling to pay water and electricity-related debts.

The committee was told this issue is exacerbated by weak leadership and inadequate credit control, which hinders revenue collection.

Additionally, Eskom’s restrictions in supplied areas have led to dismal local government collection, while theft, infrastructure issues, and tariffs not recovering costs contribute to substantial losses.

Basson emphasised the urgency of the situation, stating that inaction would lead to catastrophic consequences for the country’s water security.

“We need to take action against these municipalities,” he said.

“I’m telling you we’re going to be in a crisis in the country if these two water boards [go bankrupt]. And those are not the only water boards, other water boards will follow if we do not take action.”

Treasury’s constraints

National Treasury’s Ravesh Rajlal highlighted the challenges it faces when addressing the crisis.

“Section 1-9 of the Constitution limits our ability to intervene, as provincial treasuries are responsible for municipal finances,” he said.

Rajlal appealed to the committee to summon provincial treasuries to account for their role in the crisis.

He used the Free State provincial government’s R2 billion debt to Mangaung municipality as an example. This debt significantly contributes to Vaal Central Water’s R606 million debt.

ALSO READ: Municipal debt at R22bn: These areas could run out of water as boards go bankrupt

National Treasury’s Sifiso Mabaso said Mangaung has signed a payment agreement with Vaal Central Water, with a minimum monthly payment of R35 million.

However, the municipality has raised concerns about excessive tariffs charged by Vaal Central Water, including a ‘draft tariff’ introduced during a past draft.

“Then there was this tariff that was introduced, but has never been lifted to date. So this is also strangling the municipality’s finances. These are the concerns that they’ve raised and also there’s a service level agreement that they haven’t yet signed,” said Mabaso.

Way forward

Basson gave the Department of Water and Sanitation a three-week deadline to present a solid action plan to address the crisis.

“When Parliament opens after the recess we would like to invite you back with a plan on water and sanitation.

“Three weeks to come up with this tight deadline plan for these two water boards, because I think the country is not realising what crisis we will be in if these water boards collapse,” said Basson.

Rajlal also stressed the need for support from National Treasury, provincial treasuries, and other stakeholders to resolve the municipal debt crisis.

“We are talking about six months away we’re going to have two water boards, that give water to seven to eight million people, that will collapse,” said Basson.

ALSO READ: Water mafias are taking over as municipal governance collapses

He added that the Department of Water and Sanitation would not be able to pay off or scrap the municipalities’ debt.

Basson said if the department bails out the municipalities, others could decide to not pay their debt as well, which is not sustainable.

No short-term solutions

Rajlal suggested the following initiatives to improve the situation:

•⁠ ⁠Revenue improvement programme;
•⁠ ⁠Metro trading services reform;
•⁠ ⁠Legislative changes to address structural challenges in electricity and water.

“Many of these initiatives require legislative changes and unfortunately, there is no tangible immediate or short-term results at this point,” said Rajlal.

He said support must be provided by National Treasury, the Department of Cooperative Governance and Traditional Affairs, the Department of Water and Sanitation and others.

Basson cautioned that the country cannot afford to wait, emphasising the need for immediate action to secure South Africa’s water security.