Municipal water debt continues to rise

Thursday, November 15, 2018

The problem of municipal debt to water boards needs to be addressed more aggressively by all stakeholders.

This was the call made during a joint sitting of the Portfolio Committee on Water and Sanitation together with the Standing Committee on Appropriations (SCOA) held in Cape Town on Wednesday.

In a joint presentation on the latest update regarding the status of municipal debt to the water boards, the Department of Water and Sanitation, Department of Cooperative Governance and Traditional Affairs (COGTA), and National Treasury indicated that the municipal debt levels remains a serious concern for all water boards and the Water and Sanitation Department, as the debt continues to rise.

“This is even more so for Bloem Water, Lepelle Northern Water and Sedibeng Water, where the levels of debt are substantially high. The implication of such debt is that the viability and sustainability of the entities is being threatened as the overall debt levels continue to increase,” the departments said.

Over R2m owed to Sedibeng Water 

Sedibeng Water remains one of the municipalities with the biggest debt owed to it, with Matjhabeng Local Municipality owing R2 431 173 000, while Vhembe District Municipality tops the list of debtors to the Water Trading Entity (WTE) of the Department of Water and Sanitation to the tune of R691 088 000.

In order to address similar challenges related to electricity reticulation and distribution, an Inter-Ministerial Task Team (IMTT) was established to find solutions to the constitutional, systemic and structural challenges in electricity distribution. 

The IMTT comprises the Ministers of COGTA as chairperson, Finance, Energy, Public Enterprises, South African Local Government Association (SALGA) President, as well as Rand Water chairperson and Eskom board.

Following the Portfolio Committee meeting on 29 November 2017, the IMTT resolved to amend its mandate to include water, and Water and Sanitation Minister Gugile Nkwinti was included in its membership.

On 12 December 2017, the scope of the IMTT was expanded to include bulk water related debt.

This included a technical team that supports the IMTT, which is also tasked with finding sustainable solutions to the debt challenges for both electricity and water, where a plan is in place to deal with debt to Eskom, water boards and the WTE.

Pay your debt 

Nkwinti said he was glad to be part of the IMTT, working closely with his Cabinet colleagues on this matter.

“In response to these challenges, we need to also encourage payment of debts by other government entities and government departments, both at national and provincial levels. We have to ensure that there is also a collective effort emanating from provinces to ensure such payments occur,” Nkwinti said.

Members of the Parliamentary Committees also suggested a need to look at ring-fencing portions of some of the grant funding received.

However, an official from Treasury cautioned that the Division of Revenue Act (DORA) is restrictive as to what can be done with the money.

The meeting stressed the importance of looking at resolving the systemic and structural issues, looking into the root causes still in place and challenges that may perpetuate non-payment. –