Photo by: Creamer Media
Water utility Rand Water is facing a significant challenge in relation to outstanding debts owed by various municipalities and has reached a deadlock with no alternative but to pursue legal recourse through court proceedings to enforce adherence to the existing agreements.
Rand Water says it has relentlessly attempted to resolve and accommodate nonpaying municipalities, and entered into bilateral engagements and agreements through intergovernmental relations forums.
"Nonpayment for bulk water by municipalities vastly threatens the utility's financial position and is a direct threat to its medium- and long-term sustainability, thus, to sustainable provision of bulk water," it says.
Rand Water is "deeply concerned" by the escalating debts owed to it by municipalities and failure by municipalities to respect their bulk water purchase and debt settlement agreements. The utility operates without any form of allocation from the national fiscus, and is solely reliant on funds collected from its customers, primarily municipalities, it stresses.
"Rand Water’s financial sustainability impacts on the current and future provision of water, which depends on municipalities paying for the water they receive from Rand Water.
"We urge all municipalities, including the City of Tshwane, Emfuleni, Rand West, Merafong, Ngwathe and Govan Mbeki municipalities, to recognise the gravity of the situation and take immediate steps to rectify their financial obligations. The collective overdue debt of these municipalities is more than R4-billion," it states.
The sustainable provision of clean and reliable water supply to millions of South Africans hinges on the responsible fulfillment of bulk water purchase agreements.
"Legal action is regrettable, but imperative to protect the integrity of the agreements and secure our financial stability. Rand Water would like to emphasise that our preference has always been to engage in constructive dialogue and find mutually beneficial solutions to the challenges faced by municipalities.
"However, the magnitude of the outstanding debts has reached a critical level, requiring urgent action," it says.