SA: Water and Sanitation Department financial pressures concerning

24th May 2017

SA: Water and Sanitation Department financial pressures concerning

The Portfolio Committee on Water and Sanitation is concerned by the R1.8 billion that the department still owes contractors for the 2016/2017 financial year. The department will now have to reprioritise funds allocated for this financial year to cover the shortfall. This goes against the known policy of government of service providers within 30 days upon completion of any project. Also, by not paying service providers, the department is killing those emerging businesses.   

What is mostly concerning to the Committee is that the reprioritisation will have an adverse effect on implementation of programmes under the Accelerated Community Infrastructure Programme (ACIP) and Water Services Infrastructure Grant whose funds will be reprioritised. While the Committee accepts that the department implements massive infrastructure projects and that a process of verification has to be undertaken before paying contractors, the negative effects remain nonetheless.

Similarly, the R18,9 over-expenditure for the financial year is concerning as it points to lack of proper planning and control of the department’s finances. “The Committee reiterates its stance that it does not take the handling of public finances lightly. As a result, the Committee has resolved to invite the internal audit section of the department to ascertain if there are systems in place to pick up such alarming incidents,” said Mr Mlungisi Johnson, the Chairperson of the Committee.

The Committee is also concerned by the Water Trading Entity’s (WTE) increasing debt book. The debt book has increased despite the department’s procurement of a service provider to recover the debt. “The R8 billion debt book will hamper the WTE from delivering on its mandate. While the Committee notes the interventions currently in place, it is of the view that more can be done to recover the debt,” Mr Johnson emphasised.

The Committee also urged the department to strengthen its collaborative work with the Department of Cooperative Governance and Traditional Affairs and the National Treasury to find workable solutions to resolving the debt recovery challenge. The Committee emphasised that it will monitor the payment of the WTE’s R2.9 billion overdraft to ensure that it is done as planned. This is to ensure that this debt is settled and any surplus thereafter is then channelled towards funding other projects.  

The Committee welcomes the fact that for this financial year the WTE has not budgeted for money they assume they will receive from debt recovery interventions.


Issued by Parliamentary Communication Services on behalf of the Chairperson of the Portfolio Committee on Water and Sanitation, Mr Mlungisi Johnson