Chairperson of the Portfolio Committee on Water and Sanitation, Mlungisi Johnson, says they are extremely concerned about the increasing debt book of the Water Trading Entity (WTE).
According to Johnson the debt book for the entity was now standing at a staggering R11.2 billion, which amounts to an increase of R1.2 billion year-on-year from the 2016/17 financial year.
“While the committee is cognisant of the challenge of non-payment by municipalities, it is unacceptable that it has taken this long and there is no resolution in sight for this long-recurring challenge,” Johnson notes.
“It is also worrying that despite the procurement of a debt collection service provider, no tangible evidence of its work is noticeable. Now that the contract of the debt collector has ended, it is even more difficult to comprehend how the entity will be able to collect the debt,” he continues.
Unreasonably high litigation costs
Johsnon says that the committee is also displeased with the high litigation costs in the books of the department and its entities. The department reported that it is facing 135 litigations and the cost implication of R100.7 million if not successfully defended. Added to this, the water boards have a total of 23 litigations with cost implications of R71 million if not successfully defended.
“While the committee understands that there might be legal challenges the department has to defend, it views the current litigations as unreasonably high. As a result, the committee has requested a breakdown of the cases and reasons behind the cases, as well as reasonable expectation of success.”
“It is even worrying because the cost mentioned does not include lawyers’ fees which will take the total cost even higher. This matter must be resolved with the urgency it deserves,” Johnson says.
“The committee remains concerned about the capacity of management at the department to drive this essential entity. Some of the decisions made in the department boil down to lack of capacity, Johnson concludes.