Rand Water owed R4.1 billion these top five worst contributors

Rand Water says it is deeply concerned over the escalating debts caused by municipalities’ failure to honour their bulk water purchase agreements and debt settlement arrangements.

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RAND WATER FINANCIAL POSITION DESTABILISED

According to spokesperson Makenosi Maroo, this situation highly destabilises Rand Water’s financial position and poses a direct threat to its medium and long-term sustainability.

“Rand Water operates without any form of allocation from the national fiscus thus relies solely on funds collected from its customers, primarily municipalities. To date, they owe Rand Water a cumulative amount of R4.1 billion, with R2.9 billion relating to Gauteng, R1.2 billion from Mpumalanga, and at least R58 million from Free State,” she explained.

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LIST OF MUNICIPALITIES WITH POOR PAYMENT PLANS

The following non-performing municipalities are contributing to this long-overdue debt:

1. Lesedi Local Municipality in Gauteng – total: R48 476 180.41
2. RandWest City Local Municipality in Gauteng – total: R483 336 982.72
3. Merafong City Local Municipality in Gauteng – total: R763 737 343.74
4. Victor Khanye Local Municipality in Mpumalanga – total: R356 668 518.06
5. Ngwathe Local Municipality in Free State – total: R61 407 584.18

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POOR PAYMENT PATTERNS THREATEN FUNCTIONALITY OF BULK SUPPLIER

According to Maroo, the payment patterns have deteriorated to concerning levels that threaten the liquidity, financial performance, and sustainability of the utility.

“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. Several agreements and engagements were held with the aforementioned non-paying municipalities, and its evidence that these municipalities including the metros have taken advantage of these avenues and use them to cause endless and fruitless negotiations when it is clear that they have no intention to pay or enter into amicable arrangements that will afford them an opportunity to pay their account with ease,” she explained.

“Some of these municipal customers take an inordinately long period of time to sign the agreements.”Maroo

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DEBT COLLECTION ENFORCEMENT FROM RAND WATER

She added that the magnitude of the outstanding debt from municipalities has reached a critical level, thus requires urgent attention. “Rand Water has invoked the provisions of Section 41(1) of Intergovernmental Framework Act (IRFA) and declare an intergovernmental financial dispute and seek intervention of National Treasury and Co-operative Governance and Traditional Affairs,” she further explained.