By Lehlohonolo Lehana.
Water utility Rand Water outlined critical challenges facing South Africa’s municipal water systems and proposed innovative solutions to address mounting debt and infrastructure concerns.
During a presentation to the the Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta) committee, Rand Water highlighted the increasing municipal debt for water services, from R1.5-billion in the 2014/15 financial year to over R8-billion in the third quarter of 2024/25.
The entity warned that it was hamstrung by municipalities failing to honour their bulk water purchase and debt settlement agreements and that municipalities’ non-payment of debt was leading to the deterioration of the utility’s financial health.
The entity also outlined various challenges, including illegal connections, electricity supply challenges, vandalism and encroachment on its infrastructure by informal settlements.
“Municipalities need to use bylaws to stop incursions of human dwellings on water infrastructure servitude, as these actions have not only disrupted the supply of water but have resulted in serious injuries and deaths, said the committee.
Noting the huge infrastructural decay that leads to nonrevenue water losses, the committee urged the water uilities to consider writing off debts associated with such cases, and encouraged partnerships between utilities and municipalities to upgrade infrastructure and improve revenue collection.
The committee also asked that Rand Water review its tariff structures to ensure that this did not add to the financial burden of communities while still enabling municipalities to function.
However, it pointed out that many municipalities failed to honour their debts to utilities owing to dysfunctionality, poor governance and financial mismanagement, which compromised service delivery.
The committee also condemned malicious compliance whereby municipalities signed agreements with no intention to honour their debts.
Further, the culture of payment for services must be encouraged in communities by using flat rates in poor communities, while free basic services remain protected through a sound municipal indigent policy.
The committee called on the ministers of Cogta, Water and Sanitation and the National Treasury to get actively involved in managing this debt by using inter-governmental framework provisions that would ensure compliance before communities suffered service delivery lapses.
Rand Water CEO Sipho Mosai explained that the water utility, which has operated for 121 years without government bailouts, depends on timely payments from municipalities to maintain operations and infrastructure.
“We’ve got to be paid on time to buy electricity, to buy chemicals, to pay our staff, to upgrade our infrastructure, to maintain it, to refurbish it,” he said.
Municipal payment periods have extended from 35 days to 117 days, creating severe financial strain.
The presentation categorised municipalities as performing, on payment terms, underperforming and non-performing.
To address these challenges, Rand Water has proposed establishing special purpose vehicles (SPVs) as joint ventures with municipalities.
Mosai explained that these professionally managed entities would take over water service provision while municipalities retain authority as water service authorities.
“The special purpose vehicle, which will be a new company, will be a water services provider,” the CEO said.
Mosai emphasised that the current model of water service delivery is failing: “We need to reimagine how we provide water and sanitation. The current model we’ve been running for the last 30 years is not working. We’re talking about leaks. Why do we have so many leaks? It’s precisely because the infrastructure has not been upgraded or refurbished.”
Under this model, municipal debt would convert to equity in the SPV, allowing municipalities to “start from scratch” while bringing in investment and expertise.
According to Mosai, this approach is not privatisation but rather a partnership between government institutions to improve service delivery.
Meanwhile the reopening of the Lesotho Highlands tunnel has been delayed by three weeks, owing to maintenance work delays experienced in the Delivery Tunnel South, in Lesotho.
The critical tunnel, which transfers water from Lesotho to South Africa’s Vaal dam, was closed on October 1 for maintenance with expectations that water would be flowing again on March 31.
However, ever-changing weather patterns and the technical challenges experienced by the implementing agent on the Lesotho side of the tunnel, the Lesotho Highlands Development Agency (LHDA), has caused delays.
One of the challenges experienced was higher than anticipated seepage within the tunnel owing to a change in sandblasting technique – from manual to automated – with high humidity impacting the automated approach.