Municipalities owe Rand Water billions of rand

Rand Water says it is supplying water at full capacity despite municipalities owing it billions of rand. Picture: 123RF/MARIDAV

Rand Water says it isn’t responsible for water outages that have plagued Gauteng as the entity continues to pump supplies despite municipalities owing it billions of rand.

Rand Water CEO Sipho Mosai and COO Mahlomola Mehlo on Wednesday gave an update on the state of bulk water supply in its area of operations, including all municipalities in Gauteng, parts of the North West, Mpumalanga and the Free State.

Mehlo said Rand Water pumps 5-billion litres of water a day, which is sold in bulk to municipalities, though there are issues with leakages and outstanding debt, including the three metro municipalities in Gauteng which account for 77% of the water it supplies.

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Water consumption in Gauteng surged in July and August, leading to more leakages, Mehlo added.

“Those leaks have been attended to ... What changes is consumer behaviour, such as sprinklers being turned on and swimming pools being filled. The effect is consumption shot up.

Mehlo added that outstanding amounts meant revenue intended for infrastructure development and maintenance was being forfeited.

The time taken to receive payments had risen from 35 days in 2014-15 to 109 days in the past financial year, and Rand Water’s debtors’ book stood at R6bn by the end of September with credit losses increasing by 35% from 2022, Mosai said.

“We are pushing and pumping as much water as possible, at maximum of what we can pump,” he said. “We are adding infrastructure to store and purify water and we are self-reliant and self-sufficient and get no assistance from the fiscus. So it is important that we get paid on time to continue to maintain [our infrastructure].”

Rand Water has placed municipal consumers into three categories:

• performing municipalities that pay within 35 days;
• underperforming municipalities that take between 60 and 90 days to pay; and
• non-performing municipalities, which take more than 90 days.

One of the performing municipalities is the City of Johannesburg, which has the most consumers.

Underperforming municipalities include the cities of Tshwane and Ekurhuleni, Mosai said.

Tshwane owes R690m and Ekurhuleni R440m, according to Rand Water.

“We have received payment this month and are hopeful from the 25th to the end of the month the account will be settled,” Mosai said.

At the Emfuleni municipality, which was R729m in debt, a dedicated account has been created for water and sanitation revenue, Mosai said.

“We are going to be working with them and going to be crowdfunding the private sector, including the Rand Water balance sheet, to ensure we upgrade and refurbish and reduce the losses of about 51% in the area.”

Rand Water was not passing the blame to municipalities, Mosai said, but was aware of issues such as power outages which affect water supply. Instead, the water entity meets municipalities daily to find solutions.

“We do not shy away from the challenges out there, and in the value chain and the infrastructure in the value chain. The challenges we talk about in the spirit of trying to find solutions with the teams we have spoken to.”

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