Rand Water concerned over rising municipal debt
Rand Water says it is deeply concerned by municipalities' failure to honour their bulk water purchase agreements and debt settlement arrangements with the utility.
In a statement on Friday, the water board stated that the indebted municipalities pose a medium to long-term threat to Rand Water's financial position.
Rand Water says it operates without any form of allocation from the national fiscus and only relies on funds collected from its customers, primarily municipalities.
To date, municipalities owe Rand Water a cumulative amount of R4.1 billion, with R2.9 billion relating to Gauteng municipalities, R1.2 billion from Mpumalanga municipalities, and at least R58 million from Free State municipalities.
Rand Water spokesperson Makenosi Maroo says the payment patterns of municipalities have deteriorated to concerning levels that threaten the liquidity, financial performance, and sustainability of Rand Water.
"Despite our relentless efforts to accommodate this ongoing pattern of non-payment through bilateral engagements and participation in Intergovernmental Relations forums, we have regrettably reached a stalemate.
"Several agreements and engagements were held with the aforementioned non-paying municipalities, and it’s evidence that these municipalities, including the metros, have taken advantage of these avenues and use them to cause endless and fruitless negotiations when it is clear that they have no intention to pay or enter into amicable arrangements that will afford them an opportunity to pay their account with ease.
"Some of these municipal customers take an inordinately long period of time to sign the agreements."
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