Water boards were owed debts by municipalities to the tune of about R1 billion a year, but the Water and Environmental Affairs Ministry does not believe that this is a train smash as the entities are paid about R8.8 billion a year, thus the loss of income only makes up about 10% of the total.

At the end of September last year, arrears debts amounted to R1.12 billion, according to Water and Environmental Affairs Minister Edna Molewa.

She told a media briefing ahead of her budget vote yesterday afternoon that “this is 10% of that income. We are really looking at the income levels and the money owed but we are not trying to suggest that this isn’t bad, given that we are able to collect about R9bn on an annual basis… we do need to collect this debt.”

Clive Keegan, the SA Local Government Research Centre director, said there was “no doubt that the outstanding debt owed by municipalities is affecting the viability of the water boards”. He said a solution was to use the powers vested in the minister to mediate between the boards and the non-paying municipalities.

Keegan said: “In terms of the Municipal Finance Management Act, she (the minister) has the power to mediate to arrange settlement arrangements. There is no doubt that water and capital expenditure processes are compromised by the debt levels.”

DA water affairs spokesman Gareth Morgan said the extent of the debt owed by municipalities to some of the 12 water boards threatened to undermine their functioning. He said the debt level was nearly R2 billion, of which R1.12 billion was debt in arrears. The majority of money owing was to three water boards.

Molewa said Sedibeng Water at Bothaville in the Free State had made progress but three other water boards, Bushbuckridge in Mpumalanga, Lepelle in Polokwane and Botshelo in Mmabatho in North West, remained a problem.

She did not indicate what progress had been made or how the situation had worsened in the other three.

The minister said she would be discussing the matter with Finance Minister Pravin Gordhan to find ways to resolve the problems of backlogs of waste water at treatment plants, as well as how to finance the water infrastructure maintenance and build programme, which was bedevilling municipalities.

In addition, it was being considered that the stronger water boards – such as Rand Water in Gauteng – could cross-subsidise other water boards that were weaker.

Source: iol.co.za