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The extent of debt owed by municipalities threatens to undermine the functioning of some of South Africa’s most important water boards. Water boards are responsible for the management of water infrastructure, and are therefore a critical pillar in the delivery of clean water to all South Africans.

Unpaid debt increases the financial risk of these entities, compromises their ability to engage in capital expansion projects and threatens the future provision of clean water to the public in places where there is currently no access to running water.

Significant improvements in debt payment by municipalities are required to secure the future viability of these water boards.

The Democratic Alliance (DA) has long been calling for action to be taken by National Treasury to ensure municipalities pay their debts in arrears. The results have been mixed.

A reply to a DA parliamentary question to the Minister of Water and Environmental Affairs revealed that, as of December 2011, municipalities owed South Africa’s twelve water boards over R2.1bn. Of this amount, R1.19bn represents debt in arrears. Over 90% of debt in arrears is owed to only three water boards.

The Minister has announced plans to deal with municipalities that have consistently failed to pay their debts to water boards. The DA welcomes this initiative.

Notwithstanding the steps currently taken, the Minister of Water and Environmental Affairs, Edna Molewa, must ensure that the National Treasury, which has a mandate to mediate between water boards and municipalities in terms of section 44 of the Municipal Finance Management Act, pressurises municipalities to pay their outstanding debts. Further, as is happening with Lepelle Northern Water, the provincial departments of cooperative governance need to assist in getting errant municipalities to pay their debts.

The Minister has announced that her Department is attempting to mediate between Sedibeng Water and Matjhabeng Municipality about disputed amounts owing. The dispute between Lepelle Northern Water is being handled by a senior official in the Limpopo government, while Bushbuckridge municipality has entered into terms with Bushbuckridge Water to pay its outstanding debts by June this year.

The worst affected water board is Sedibeng Water which, as of September last year, was owed R470m of debt in arrears. Of this figure, most of the money owing is from a single municipality, namely Matjhabeng. The Lepelle Northern Water Board is also in a sensitive position with more than R302m of debt in arrears. Its largest debtor is Mopane District Municipality which, as of September last year, owed it R189m in debt. Bushbuckridge Water has over R248m of debt in arrears, of which R214m was owed by Bushbuckridge Municipality.

The DA has been tracking the debt owed to all water boards for more than two years, and the trajectory of the overall debt has been upwards, with a partial stabilisation in the last few months.

From mid-2009 to mid-2011 the overall debt grew by approximately R700m:

As of 31 July 2009, R1.1bn was owed to water boards, of which over R525m was debt in arrears.
As of 30 June 2010, R1.56bn was owed to water boards, of which R853bn was debt in arrears.
As of 30 June 2011, R1.89bn was owed to water boards, of which R1.127bn was debt in arrears.
As of 31 December 2011, R2.1bn was owed to water boards, of which R1.19bn was debt in arrears.

However, looking at all twelve water boards combined masks the serious problems faced by some individual water boards. Sedibeng Water, Lepelle Northern Water and Bushbuckridge Water carry the burden of over 90% of debt in arrears owed to all water boards.

On the other hand, Overberg Water, Pelladrift Water and Umhlatuze are owed no debt that is in arrears, while Umgeni Water, one of the biggest water boards in the country, is owed very little money.

On this, National Water Day, the DA declares that it will continue to do everything in its power to ensure that water delivery to all South Africans is not compromised.