11 December 2012

South Africa: R2.31 Billion Debt Owing to Water Boards

press release

Many municipalities in South Africa are compromising the operation of water boards. A reply to a DA parliamentary question have revealed that, as of 30 September this year, the total debt owed by municipalities to water boards is R2.31 billion. Of this amount R1.3 billion is debt in arrears. The total debt in arrears has grown from R525m in 31 July 2009 when the DA first started monitoring these figures, but it has thankfully dropped slightly from 30 April 2012 when it stood at R1.4bn. As has been the trend for some time now, the majority of debt in arrears is owed to 3 water boards - Bushbuckridge, Lepelle Northern and Sedibeng, with almost half of all debt in arrears owed to Sedibeng Water Board. The latest parliamentary reply though suggests that Botshelo Water is now also facing problems with debt in arrears.

The offending municipalities are placing water boards like Bushbuckridge, Lepelle Northern, Sedibeng and Botshelo at considerable risk. With such considerable debts owing to theses water boards their ability to expand operations and maintain existing infrastructure is compromised. Sedibeng Water is owed R638m debt in arrears, Bushbuckridge is owed R248m debt in arrears, and Lepelle Northern is owed R232m debt in arrears.

The overall debt in arrears has dropped slightly since the last time this parliamentary question was asked (for the figures on 30 April 2012) mainly because of reductions of debt in arrears owed to Randwater, Amatola, Bloem and Lepelle Northern Water Boards. The debt in arrears owed to Sedibeng Water Board has however increased substantially since 30 April 2012, from R561m to R638m. There is evidently also an increasing problem being faced by Botshelo Water as debt in arrears owed to it has grown from R61m to R95m.

The DA has persistently called for more robust mechanisms to be implemented to ensure that the financial management of municipalities is improved to the point where these arrears can be extinguished. Such steps appear to be slow in the making. The Minister of Water and Environmental Affairs must ensure that the National Treasury, which has a mandate to mediate between water boards and municipalities in terms of section 44 of the Municipal Finance Management Act, continues to pressurise municipalities to pay their outstanding debts. There should be punitive measures taken against municipalities that are tardy in paying.

The department is in the process of finalizing the Institutional Reform and Realignment (IRR) project, which is likely to lead to some water boards being absorbed into others, but that in itself will not solve the problem of municipalities not paying money owed to water boards for service delivery in their jurisdictions.

The state of water service delivery at a local government level is in serious need of attention, and is reflective of a failure of collective water governance at both the national and local levels. As the ultimate guardian of our scarce water resources, the Minister must demonstrate more urgency and efficacy on getting delivery right.

Gareth Morgan, Shadow Minister of Water and Environmental Affairs

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