Rand Water asks Treasury to intervene in municipalities R3bn debt
Rand Water has called on National Treasury and Co-operative Governance to intervene in settling the R3 billion water bill of Gauteng, Mpumalanga and Free State municipalities.
The utility invoked Section 41(1) of the Intergovernmental Relations Framework Act declaring an intergovernmental financial dispute.
In a statement on Friday, Rand Water said the debt destabilizes its financial position and poses a direct threat to its medium and long-term sustainability.
Spokesperson Makenosi Maroo said Gauteng municipalities alone, owe the utility R2 billion, Mpumalanga R1 billion and municipalities in the Free State have a water bill of R63 million.
"Rand Water operates without any form of allocation from the national fiscus, thus relies solely on funds collected from its customers, primarily municipalities to fulfill its obligations”.
"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” said Maroo.
Rand Water has since reduced the water flow by 20% in communities situated in the Ngwathe Municipality and Merafong City Municipality.
"Should these municipalities fail to pay the overdue amount or enter into amicable payment arrangements, Rand Water will further implement another 20% this month” said Maroo.
"Rand Water is also in the process of employing the same credit control measures for the other owing municipalities who are failing to honour their Debt Settlement Agreements," she added.
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