Despite growing municipal water debt the Department of Water and Sanitation has revealed that it is making progress in reducing its overdraft.
Briefing Parliament’s Standing Committee on Public Accounts (SCOPA) recently the department said it is owed R 11 billion by municipalities and water boards with the debt having risen by R 1.3 billion between 01 April 2017 and 31 January 2018.
“As a corrective step and in agreement with National Treasury, the department has decreased the overdraft to R 1.9 billion in the current financial year exceeding the targeted R 748 million decrease by 31 March 2018 as agreed with National Treasury,” the department explained.
According to Ministerial Spokesperson, Mlimandlela Ndamase, the department is committed to eradicating the overdraft over the next financial year as well as increasing its debt recovery methods to enhance its ability to deliver new infrastructure and to maintain and rehabilitate existing infrastructure.
A constrained environment
Ndamase added that the figures presented to SCOPA were reflective of the constrained environment the department has found itself in wherein municipal debts are increasing at an average rate of R 1 billion year-on-year and a declining fiscal allocation from the treasury to the department.
In this regard, the department noted that Portfolio Committee on Water and Sanitation has convened a committee comprising of the various affected portfolios, specifically the National Treasury, Cooperative Governance and Traditional Affairs as well as the South African Local Government Association to seek means of finding solutions to the current debt crisis that is adversely affecting the smooth financial operations of the department.