The Portfolio Committee on Water and Sanitation has advised the Department of Water and Sanitation to make the necessary negotiations to cut off the equitable share funding to indebted municipalities.
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The suggestion was made during a meeting held in Cape Town on Wednesday, where the department, led by department’s Acting Director-General Sifiso Mkhize presented the second quarter performance to the committee.
On water debt recovery, particularly with regards to the municipalities, the committee suggested that the department engages both the Cooperative Governance Department (COGTA) and National Treasury to ensure the equitable share of owing municipalities is withheld.
Re-negotiating payment terms on Water Trading Entity overdraft
“This action would result in a particular municipality signing a Memorandum of Understanding agreeing to pay the department the amount owed from the equitable share. The municipality would then stand the chance of forfeiting the share if it defaulted. “The municipality would also be obliged to prove to COGTA and National Treasury that the said debt had been paid. National Treasury would only then release the balance of the equitable share to the municipality. “The department was also advised to re-negotiate the terms of the repayment of the Water Trading Entity overdraft, and that it should be over a longer term. It is suggested that this could be one way of releasing some of the funding to continue work on the planned infrastructure projects that stand a chance of either being stopped, or not even started,” the department explained in a statement issued following the meeting.