Defaulting municipalities could have their equitable share allocations withheld if they fail to pay up the outstanding R26.7 billion owed to water boards and the Water Trading Entity.
That is the warning Water and Sanitation Minister Senzo Mchunu gave, confirming that his department would engage municipalities through the intergovernmental relations framework to recover the outstanding debt.
“The total amount in outstanding debts is owed by municipalities to water boards and the department’s Water Trading Entity as at the end of September 2023 was R26.7bn.
“The water boards are currently owed R18.3bn and the Water Trading Entity is currently owed R8.4bn by the municipalities,” he said.
Mchunu was responding to parliamentary questions form DA MP Leon Basson, who asked about the total amount in outstanding debts owed by municipalities.
Basson had enquired about the steps his department has taken to mitigate the growing debt crisis to ensure the financial stability and viability of the water supply infrastructure.
The debt has ballooned by almost R3bn from the R23bn recorded earlier this year. In March, it was reported that municipalities owed water boards across the country a total of R14bn and that a further R8.4bn was owed to the Water Trading Entity, including money owed by water boards to the entity.
Mchunu said his department has taken various measures to mitigate the growing debt crisis to ensure the financial stability and viability of the water supply infrastructure.
Standard operating processes (SOPs) for debt recovery have been developed, covering both the water boards and the department’s Water Trading Entity.
“A consultation process inclusive of all water sector stakeholders was undertaken on the outstanding debt and the strategy to improve billing and revenue collection for bulk raw water and bulk water services.
“Stakeholders included 144 water services authorities (WSAs), nine members of executive councils responsible for corporate governance and traditional affairs, South African Local Government Association and Department of Co-operative Governance and Traditional Affairs (Cogta).”
Mchunu said all the sector stakeholders were given the opportunity to comment on SOPs until March 24.
He also said he had further convened a meeting with all the water boards in October and the SOPs were presented to them. “The resolution of the meeting was that the water boards should submit their comments on the SOPs to the Department of Water and Sanitation by October 20, 2023.
“Comments were received from the water boards and are in support of the SOPs.”
According to Mchunu, he has now finalised the consultation process with stakeholders.
“The department and water boards will continue to engage the local government sector to recover the outstanding debt. Should this not result in a solution the department and water boards will implement the steps in line with the SOPs,” he said.
The steps to be taken include the Department of Water and Sanitation to collaborate with the National Treasury to ensure that equitable share allocations are withheld for municipalities not paying their current invoices.
Cape Times
