Finance minister Enoch Godongwana has urged water boards to attach the bank accounts of 39 defaulting municipalities to enforce a “change in behaviour”.
In a letter addressed to cooperative governance and traditional affairs minister Velenkosini Hlabisa, dated June 30, Godongwana raised concerns over the persistent failure by the municipalities to pay water boards and third-party entities such as pension funds, medical aids, the SA Revenue Service and the auditor-general.
He also cited their failure to adopt funded budgets.
The list of municipalities that owe third-party entities includes Emfuleni local municipality, Dr Beyers Naude, Makana, Letsemeng and Kopanong in the Free State and Ditsobotla in North West.
It is advisable that parallel to the LGES withholding process, Rand Water, Vaal Central, Lepelle Northern and Magalies Water enforce their credit control policies to also attach the bank accounts of the defaulting municipalities
— Finance minister Enoch Godongwana in letter to Cogta minister Velenkosini Hlabisa
Emfuleni, which recently had its banks attached by Rand Water, was also mentioned among the municipalities that owe water boards.
Other municipalities that are indebted to water boards, which, according to Godongwana, are facing i bankruptcy, include Lesedi local municipality, Rand West, Kopanong and Nala.
“If the municipalities that owe water boards fail to provide proof that they have fully paid the outstanding amounts owed to the respective water boards then the local government equitable share (LGES) of those municipalities will be stopped and only be released to the municipality in portions with conditions,” reads the letter.
“It is advisable that parallel to the LGES withholding process, Rand Water, Vaal Central, Lepelle Northern and Magalies Water enforce their credit control policies to also attach the bank accounts of the defaulting municipalities to enforce a change in behavior of these municipalities.
“The same applies to all the water boards in order to avoid a similar situation and prevent escalating debt across water boards.
“This letter serves as a consultative mechanism with you in terms of section 38(2)(c) of the MFMA [Municipal Finance Management Act] with regard to the intention of the NT [national treasury] to invoke section 216(2) of the constitution by stopping the transfer of the 7 July 2025 tranche of the equitable share and all the grants to be transferred to the 39 municipalities.”
He asked Hlabisa’s office to make a written representation by July 7 before he finalises his decision to stop the transfers to the 39 identified municipalities.
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