Residents of municipalities that have defaulted on their water debt payments to government and water boards face a bleak Christmas.

Water and Sanitation Minister Nomvula Mokonyane yesterday threatened to restrict bulk water supply to affected municipalities.

She had given them until next week Friday to enter into agreements to start servicing the R10.7-billion debt.

About R4-billion is owed to the department's Water Trading Entity (WTE) and the rest to water boards.

Only the Mthatha-based OR Tambo municipality has honoured its agreement to service its debt, Mokonyane said.

She said she would ask the National Treasury to withhold the equitable share of national revenue belonging to 30 municipalities that owe over R50-million each, and whose debt is older than six months.

"Section 59 (3) (b) of the National Water Act allows the department to restrict or suspend the flow of water to defaulting municipalities.

"We have as Friday, November 24 2017, communicated with all the affected municipalities, notifying them of our decisions in this regard, consequent to their failure to pay," she said.

Mokonyane, however, said they would avoid hurting consumers when they restrict water supply to affected municipalities. SA Local Government Association's executive for municipal infrastructure, Jean de la Harpe warned that it was unconstitutional to restrict water supply, saying the department has an obligation to consult consumers who are affected by this.

"I don't believe that the solution they have come to is going to address the real problem that people are not paying.

"It's going to cause public health problems and affect end users, both those who paid and those who are entitled to basic water. I believe we need to seek other solutions," she said, adding that SA's 257 municipalities were owed R130-billion for services.

Mokonyane promised to "throttle" the water supply - instead of shutting it down altogether -"because of the constitutional rights of every citizen" to water. The WTE is under financial strain. Auditor-General Kimi Makwetu's audit report shows that the entity is R3.6-billion in the red and has taken a R2.1-billion overdraft in violation of National Treasury regulations.

Lulu Johnson, water and sanitation portfolio committee chairman, said he had called on Mokonyane, Finance Minister Malusi Gigaba and Cooperative Governance Minister Des van Rooyen to discuss the water debt crisis next Wednesday.

Johnson expressed concern that the department had appointed a single debt collector "for such a whopping debt book", and said he would like to know what was being done to collect the debt owed by some of the major parastatals.

The DA spokesman on cooperative governance and traditional affairs, Kevin Mileham, said the "water debacle" would not have happened if government had put proper checks and balances in place.