R2.7 billion in debt is owed to the department of water and sanitation, minister Nomvula Mokonyane told Parliament last week.
The debt, which is owed by water boards and municipalities, was described as a “major concern for the department” and was said to be a threat to the department’s ability to deliver bulk water infrastructure.
“Currently, the department has faced three severe budget cuts over the last financial year, with no new money having been provided for drought interventions and increased demands for the rehabilitation and development of new bulk infrastructure critical for social and economic development,” Mokonyane said.
“The water debt owed by water boards and municipalities adds further constraint to the department,” she added.
She said water debt has resulted in the department’s Water Trading Entity accruing an overdraft of R2.1 billion, for which it has consulted National Treasury. This was in an effort to promote revenue enhancement and debt-management measures to recover the monies owed.
Mokonyane said water was a “critical and essential service” and therefore, there needed to be inter-governmental processes in place to guarantee that those owing the department settle their debts.
Solutions to water debt challenges
Mokonyane proposed that the portfolio committee on water and sanitation invite the department, along with National Treasury and the department of cooperative governance and traditional affairs, to seek lasting solutions to the water debt challenge.
She also dismissed suggestions that the department was bankrupt and advised Parliament, through chief financial officer Sifiso Mkhize, that on 31 March 2017, the department had sufficient funds in its main account to pay salaries and invoices.
“These allegations of bankruptcy have been continuously bandied about by the media with a reliance on faceless sources,” she said. “Time and again, we have proved to the portfolio committee, supported by National Treasury in a previous sitting, that the department is meeting its financial obligations and spending in line with the annual and quarterly projections.”
The Democratic Alliance previously alleged that the department owed water boards R482 million. The department said these amounts were invoices received up till 28 February 2017, were not older than 60 days, and that these had since been paid.
“The department pays on average R1 billion monthly in invoices and 98% of invoices received are paid within a 30 day period…” Mokonyane said.