Water cuts: Withholding resources may escalate 'upheaval' – SALGA

Municipalities combined owe just under R7bn to the department's Water Trading Entity and various provincial water boards

Water cuts: Withholding resources may escalate 'upheaval' - SALGA

30 November 2017

Cape Town - The South African Local Government Association (SALGA) says some of the measures imposed on municipalities, such as recent threats to funding or water supply, may not necessarily help the debt crisis.

Water and Sanitation Minister Nomvula Mokonyane on Monday said at least 30 municipalities would experience water cuts if they failed to pay their debt before December 8.

The municipalities combined owe just under R7bn to the department's Water Trading Entity and various provincial water boards.

The debt risks ballooning by another R1.5bn if there is no immediate intervention.

SALGA CEO Lance Joel told a joint committee meeting in Parliament on Wednesday that some of the mechanisms used to penalise ailing municipalities, such as section 216 of the Constitution, may not help the cause.

"Section 216 is a blunt in that it solves short term problems by creating larger complications.

"Withholding the equitable share of funds to these municipalities punishes the community and other stakeholders and not the officials responsible for mismanagement.

"The net effect... is that it escalates local tensions and could easily lead to political upheaval."

Treasury's local government chief Jan Hattingh said earlier in the day that they could not write off the debt of 30 municipalities facing possible water cuts next month.

The real problem was the systematic mismanagement of some municipalities by individuals over several years, as highlighted by the auditor general's annual report.

That mismanagement, and a culture of "non-payment" by citizens, service providers and governments, has contributed to a cycle of growing debt.

'Unrealistic expectations'

SALGA said there were better options than cutting off water or funds to the 30 municipalities.

The best possible solution would be to give space for SALGA, National Treasury and the department of water, specifically the Water Trading Entity, to do due diligence on the current impasse.

The due diligence would help to find a sustainable solution before the December 8 deadline, if it is given resources and political support.

Individual agreements to pay back debt to water boards does not work if the expectations are unrealistic.

"Some of the municipalities are technically insolvent and therefore entering into an agreement is unrealistic and will yield no long-term solution."

Paying one threatening creditor usually leads to defaulting on others, the committee heard.

Two-week deadline

Mokonyane said cutting off water, however, was a last resort, as citizens had a Constitutional right to water.

However, they needed to recover the money because it was contributing to the cycle of debt at her department.

Co-operative Governance and Traditional Affairs Deputy Minister Andries Nel said it supports Treasury's stance that debt could not be written off.

Mokonyane, Nel and Hattingh all said that Cabinet's inter-ministerial committee, led by Cogta, should take the lead on the debt crisis, and use the inter-government relations framework to enact a dispute resolution mechanism.

It should include all roleplayers, including SALGA, her department, Treasury and Cogta.

They will meet within 14 days, effectively extending the December 8 deadline.

Portfolio committee chairperson Lulu Johnson said it should be a busy festive season for the two ministries and Treasury as they try to find a solution with SALGA.

The committee will sit again on January 24, 2018, after the Christmas break, where all roleplayers are expected to bring revised plans.

They will not make a rash decision until March.