Water and Sanitation Minister Nomvula Mokonyane says debt owed to the department by some water boards and municipalities amounted to around R2.7 billion.
Presenting the department’s 2017/18 Annual Performance Plan in Parliament this week, Minister Mokonyane cited the accruing debt of water boards and municipalities as a major concern for the department and as a threat to its ability to deliver bulk water infrastructure.
“Currently, the department has faced three severe budget cuts over the last financial year, with no new money having been provided for drought interventions and increased demands for the rehabilitation and development of new bulk infrastructure critical for social and economic development.
“The water debt owed by water boards and municipalities adds further constraint to the department," said Minister Mokonyane.
She said the water debt has resulted in the department's Water Trading Entity accruing an overdraft of R2.1 billion, for which the department has consulted National Treasury, in an effort to promote revenue enhancement and debt-management measures to recover the monies owed.
"Water, being a critical and essential service, [is something that we] as a department cannot switch off as a debt recovery measure, hence the need to emphasize on an inter-governmental process that guarantees that those that owe the department service their obligations accordingly," said Minister Mokonyane.
Lasting solutions to water debt challenges
The Minister has proposed that the Portfolio Committee on Water and Sanitation invite the department, along with National Treasury and the Department of Cooperative Governance and Traditional Affairs, to seek lasting solutions to the water debt challenge.
Minister Mokonyane also dismissed suggestions that the department is bankrupt and advised Parliament, through the Chief Financial Officer Sifiso Mkhize, that by 31 March 2017, the department had sufficient funds in its main account to pay salaries and invoices received and verified.
"These allegations of bankruptcy have been continuously bandied about by the media with a reliance on faceless sources. Time and again, we have proved to the Portfolio Committee, supported by National Treasury in a previous sitting, that the department is meeting its financial obligations and spending in line with the annual and quarterly projections," said Minister Mokonyane.
On an allegation by the Democratic Alliance that the department owed water boards R482 million, the department clarified that the amount referred to was invoices received as at 28 February 2017, and that these were invoices not older than 60 days and that these had since been paid.
"The department pays on average R1 billion monthly in invoices and 98% of invoices received are paid within a 30-day period…" Minister Mokonyane said.
Mhlathuze Water Board appeal withdrawn
Meanwhile, the Minister has decided to withdraw her appeal on the KwaZulu-Natal High Court judgment in the matter of Makhanya vs the Minister of Water and Sanitation and Mhlathuze Water Board.
The judgment in the case had determined that the Minister did not possess the necessary legislative powers to extend the term of office of board members beyond the maximum prescribed period, as per the National Water Act.
The Minister said she has since filed an intention to withdraw the appeal with the KwaZulu-Natal High Court and has initiated a process to appoint a new board of directors in compliance with the judgment.
"We wish to extend our gratitude to the members of the outgoing board and chairperson Dudu Myeni for their contribution to the water sector and stewardship of Mhlathuze Water Board," said Minister Mokonyane.
The Minister will announce a new board once a due and legal process has been finalised to ensure a seamless transition.