Parliament, Tuesday, 27 August 2024 – The Portfolio Committee on Water and Sanitation has called for immediate action to stop municipalities’ ever-increasing debt to water boards. The committee is of the view that this long-standing challenge has long been discussed and urgent action is now unavoidable because of the impact of the debt on the entire water value chain.
“The magnitude of this problem is devastating to the cash flow of water boards and negatively affects the entire water value chain. Finding solutions to this unsustainable challenge is urgent and cannot be deferred any further,” said Mr Leon Basson, the Chairperson of the committee.
The committee was informed that as of June 2024 the municipal debt to water boards is at R22.36 billion with an average increase of 151% between 2019 to 2024. The direct impact to water boards is that some boards, such as Vaal Central Water and Magalies Water, face bankruptcy in the next six to 12 months, as they do not have sufficient cash resources to pay their operating activities and have stopped paying for their raw water. If the situation is not urgently resolved, the impact on communities served by these boards will be dire, as the boards may be unable to provide water.
While the committee acknowledges the Minister’s proactive engagements with provincial governments, water boards and municipalities, the committee believes that engagements without action will spell disaster for communities depending on these water boards for water. Municipalities’ inability to pay their debt also has a negative impact downstream, as water boards are then unable to pay the Department of Water and Sanitation for the extraction of raw water.
“The socio-economic impact of the debt is far-reaching and has the potential of crippling the water value chain, as it will affect the ability to perform necessary maintenance, businesses will be greatly affected and access to water will be made difficult,” Mr Basson emphasised.
The committee praised those municipalities that have endeavoured to settle their accounts with water boards and highlighted that the payment of services is necessary to maintain the quality of service they receive.
Furthermore, while the committee acknowledged attempts to write off old debt, it cautioned that this should be done with the provision that municipalities commit to adequately servicing their current obligations.
Meanwhile, the committee received fourth quarter (January–March 2024) and first quarter (April–June 2024) performance reports and acknowledged the good progress, especially in unblocking and accelerating delayed projects, including the Lesotho Highlands Water Project, the uMkhomazi, Ntabelanga, Stephen Dlamini and Foxwood dams and raising the Clanwilliam Dam wall.
The committee also welcomed the concerted effort to recruit personnel to urgently facilitate water-use licence applications. The decision announced by the President to expedite the application process for water-use licences is an integral intervention to unlock and enable water’s economic potential in growing the economy.
Regarding the Giyani Water Project, the committee was informed that commendable progress is being made to ensure reticulation of water to households and has requested a detailed progress report on the villages that now have access to water.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON WATER AND SANITATION, MR LEON BASSON
For media enquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Malatswa Molepo (Mr)
Parliamentary Communication Services
Tel: 021 403 8438
Cell: 081 512 7920
E-mail: mmolepo@parliament.gov.za
Arrange a tour