Municipal debt threatening water security, DG warns
The accumulation of municipal debt for water was threatening the sustainability of water boards and beyond that the country's water security, the director-general for human settlements, Mbulelo Tshangana, cautioned MPs on Tuesday.
Tshangana told Parliament's portfolio committee on human settlements, water and sanitation that the matter was more complex than municipalities running out of cash because consumers were not paying their water bills as this had a dire knock-on effect that disrupted future water supply.
Unpaid bills meant that municipalities were not paying water boards and the Water Trading Entity, and their collective debt has escalated by 14%, from R13.1-billion in September 2018 to R14.9-billion in September this year, according to figures presented to Scopa.
The Sedibeng Water Board, which is located in Bothaville and serves consumers in three provinces, was owed R3.37-billion as of last month, despite a range of debt recovery processes.
Tshangana said this in turn meant that water boards cannot refurbish water services infrastructure and that the trading entity cannot pay the Trans-Caledon Tunnel Authority (TCTA) which borrows money on the financial markets to fund critical water projects.
"We pay the TCTA so that they are in a position to service the loans. The market will punish the TCTA very harshly because the TCTA goes out to the market to raise funds for new projects. If they don't service the loans, they will be blacklisted and they will be in the same position as Eskom is now.
"The markets are watching this debate very carefully. These things are important... we don't look at it as just households not paying municipalities."
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