LISTEN | Rand Water owed billions by municipalities
Water entity says it has been pumping at full capacity but there are issues when the water reaches municipalities, including leaks and unpaid debt
Rand Water says it is not responsible for water outages that have plagued Gauteng as the entity continues to pump water despite billions of rand being owed by municipalities.
Rand Water held a media briefing on Wednesday where CEO Sipho Mosai and COO Mahlomola Mehlo gave an update on the state of bulk water supply in its area of operations, including all municipalities in Gauteng, parts of the North West, Mpumalanga and the Free State.
Mehlo said Rand Water pumped 5-billion litres of water per day which is sold in bulk to municipalities. However, due to consumption and leakage, there are issues in the three metro municipalities in Gauteng which account for 77% of the water Rand Water supplies.
“We don’t have issues in our systems. We are pumping. And the water reaches the consumer, which is municipalities,” he said.
Water consumption in the province shot up in July and August, leading to more leakages.
“Those leaks have been attended to but that variable remains constant if the leaks remain there. What changes is consumer behaviour, such as sprinklers being turned on and swimming pools being filled. The effect is consumption shot up, like as of the past week.”
Other than leaks, the challenges faced by Rand Water relate to not being paid on time by municipalities, so the revenue intended for infrastructure development is not being received.
Mosai said turnaround payment days have increased from 35 in 2014/2015 to 109 in the past financial year. This means Rand Water is sometimes paid by municipalities 109 days after supplying water.
This has left the entity with a debtors' book of R6bn by the end of September and credit losses increasing by 35% from 2022.
“We are pushing and pumping as much water as possible, at maximum of what we can pump. We are adding infrastructure to store and purify water and we are self-reliant and self-sufficient and get no assistance from the fiscus. So it is important that we get paid on time to continue to maintain,” Mosai said.
Rand Water has placed municipal consumers into three categories:
- performing, which are municipalities that pay within 35 days;
- underperforming, municipalities that take between 60 to 90 days to pay; and
- non-performing municipalities, which take more than 90 days.
One of the performing municipalities is the City of Johannesburg, which pays on time despite having the largest number of water consumers.
Underperforming municipalities include the cities of Tshwane and Ekurhuleni, Mosai said.
Tshwane owes R690m and Ekurhuleni R440m, according to Rand Water.
“We have received payment this month and are hopeful from the 25th to the end of the month the account will be settled.”
A special purpose intervention has been implemented in the Emfuleni municipality, which was R729m in debt.
This involved creating a dedicated account for water and sanitation revenue, Mosai said.
“We are going to be working with them and going to be crowdfunding the private sector, including the Rand Water balance sheet, to ensure we upgrade and refurbish and reduce the losses of about 51% in the area.”
Rand Water was not passing the blame to municipalities, he said, but was aware of issues such as power outages which affect water supply. Instead, the water entity meets municipalities daily to find solutions.
“We do not shy away from the challenges out there, and in the value chain and the infrastructure in the value chain. The challenges we talk about in the spirit of trying to find solutions with the teams we have spoken to.”
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