Debt threatens to collapse water services across country – Emma Powell

DA MP says municipalities across SA owe more than R14.9bn to Water Boards

Mounting municipal debt threatens to collapse water services across the country

30 October 2019

Municipalities across South Africa owe more than R14.9 billion to Water Boards. The scale of this crisis was revealed during a joint sitting of the Portfolio Committees for the Departments of Water and Sanitation (DWS) and Cooperative Governance and Traditional Affairs (COGTA) on Tuesday.

Despite an Inter-Ministerial Task Team (IMTT) having been appointed in 2017 to stem mounting liabilities, municipal debt has increased by R1.7 billion between March 2018 and September 2018 with a further R1.8 billion debt accrued in the year to date.

Underpinning this crisis is a culture of non-payment by water users to Municipalities. To date, more than R165.5 billion is owed to local government authorities by utilities clients, R50.2 billion of which is for water services. Households account for almost 72% of this total debt.

Common reasons cited for the non-payment of water to Municipalities include a lack of reliable accounting systems within Municipalities, inaccurate meter-reading and billing, non-receipt of invoices and the ineffective implementation of credit control measures by accounting officers.

Aging infrastructure and a lack of investment into repairs and maintenance is further compounding the crisis. Whilst the City of Cape Town has the lowest leak rate in the country at roughly 16%, a status report presented to the committees by the South African Local Government Authority (SALGA) revealed that the average rate of water losses has soared to 38% nationwide. As a result of this debt crisis, DWS is largely unable to maintain, rehabilitate and extend much-needed water services infrastructure throughout drought-stricken parts of South Africa.

Of significant interest during Tuesday’s committee sitting was the striking inconsistency of resolution mechanisms presented by the respective bodies – SALGA, COGTA, DWS and Treasury. Whilst accounting officers of DWS recommended that finance laws be amended to allow Treasury to ‘top-slice’ equitable shares and conditional grants at the National level for the payment of debt, SALGA explicitly highlighted this an ineffective proposal, citing a knock-on effect to the poor. The IMTT set up in 2017 is also yet to submit any recommendations on their workstreams to Cabinet.

It is worth noting that despite dozens of officials who traveled to the Committee meeting in Cape Town at the cost of their Departments, Members of Parliament were precluded from posing any questions and were informed that the joint committee sitting will be reconvened at an unspecified future date, for the purposes of a Q&A. The Portfolio Chairperson for COGTA, Faith Muthambi, who proposed the early conclusion of the meeting, recommending that Parliament convene a cross country ‘study-tour’ for Members of the Committee at a later date – again, at the taxpayers' expense.

More study tours will not fix our ailing water infrastructure. We need answers and action.

The Democratic Alliance (DA) will now write to the Chair of Chairs, calling for an urgent sitting of the respective committees to finalise an inter-departmental, consolidated strategy to deal with the looming collapse of the country’s Water Services Infrastructure. We will also be calling for Parliament to consider necessary amendments to legislation, to allow DWS to recuperate municipal debt directly from Treasury allocations.

This situation simply cannot be allowed to continue.

Issued by Emma Powell, DA Shadow Minister of Water and Sanitation, 30 October 2019