By Lehlohonolo Lehana.
Bulk water utility Rand Water has announced that it will reduce bulk water supply to the Merafong municipality over a staggering R1,4 billion rand debt.
The water utility supplies about 18 million people through 17 municipalities and hundreds of industrial customers in four provinces.
The National Treasury said it plans to withhold funds from five councils over unpaid water bills as part of efforts to compel local governments to pay for basic services.
Government is grappling with a worsening water crisis mainly caused by decades of underinvestment and poor maintenance by town and city councils.
Rand Water says the municipality has, after months of deliberation, continuously refused to honour its debt payments to the utility.
The decision to reduce the bulk potable water supply by a further 20% was necessary to prevent further escalation of the municipality’s debt that has accumulated owing to its failure and refusal to fulfil the bulk water supply contract entered into with Rand Water.
The municipality will experience low-pressure water supply with immediate effect.
This situation is highly untenable and destabilises Rand Water’s financial position as it poses a direct threat to its medium- and long-term sustainability. It is important to mention that Rand Water operates without any form of allocation from the national fiscus and, thus, relies solely on funds collected from its customers, primarily municipalities, to fulfil its obligations,” the utility points out.
Rand Water asserts that it will not allow a situation where its financial stability is placed at risk because of defaulting municipalities.
“Financial sustainability ensures that Rand Water continues with its legal obligation to supply potable bulk water to all its customers, including municipalities. This would also encourage the organisation to continue financing the constrution and augmentation of bulk water infrastructure and undertake appropriate maintennance of its extensive network,” it adds.
Municipalities nationwide also owed state-owned power utility Eskom — which has managed to avoid rolling blackouts — R95.4 billion by November 2024, 28% more than what was outstanding at the end of March.