Municipalities’ unpaid water bills increase to a whopping R13.1bn

Municipalities that do not pay their water bills have run up a whopping R13.1-billion debt – an amount just R2-billion short of the entire annual budget of the department of water and sanitation.

The department told the portfolio committee on water and sanitation on Wednesday that despite interventions since last November, the problem was getting worse. Between March and September municipal water debt increased by R1.7-billion.

MPs were told that the consequences of the big water debt were serious as the department of water and sanitation and the country’s water boards did not have enough money for the necessary refurbishment of water infrastructure, including dam infrastructure, and to deal with important issues such as water pollution.

The department’s Paul Nel told MPs that of the R13.1-billion debt, municipalities owed water boards R8.6-billion and the water boards in turn owed the department R4.5-billion.

Nel said the debt owed to some water boards was a threat to their financial sustainability.

“This critical issue needs to be addressed more aggressively by all stakeholders,” Nel said.

Water debt linked to electricity debt

It was not only municipalities at fault. Government and provincial departments also owe a portion of the R13.1-billion debt.

An inter-ministerial task team, established in December 2017 to deal with municipalities’ non-payment for electricity, had been extended to include non-payment of water bills.

It was decided 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.

“Because of deep-rooted problems in municipalities it is no surprise that those that owe Eskom are the same municipalities that owe water boards,” Nel said.

Over the last year the water department had issued 63 summonses to municipalities, and had taken seven to court, where the department won the cases. Forty-seven started paying their accounts.

Water restrictions in non-paying municipalities last December have “worked a bit”, but are not a long-term solution, Nel said.

Officials ordered to pay debts within 30 days

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.”

He said national treasury had issued an instruction to all financial officers in government departments that they pay their debts within 30 days.

If they failed to do so, each defaulting financial officer could face a case of financial mismanagement.

William Moraka from the South Africa Local Government Association (Salga) told MPs that the big cities and towns had sufficient trained staff to deliver services and collect payment.

“But once you look at the district municipalities it is a bit of a challenge. They are unable to attract the relevant skills in the municipalities and hence there is a deterioration in those municipalities.”

Cogta called out

Salga was helping train staff about costing and pricing.

A representative of one of the water boards told MPs that many municipalities had “settled into thinking that water should be free”.

Lulu Johnson, portfolio chairperson, said the problem of municipal water debt “just goes on and on”.

He fingered the department of cooperative governance and traditional affairs (Cogta) for not taking action in this regard.

“Making municipalities accountable, once again Cogta comes into the picture.

“Clearly Cogta is not taking a keen interest in these matters, which are quite serious. But Cogta has to take full responsibility,” Johnson said. — News24

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