At least 21 municipalities including the Ekurhuleni and Tshwane metros owe Rand Water more than R4bn in unpaid bills.
According to Rand Water spokesperson Makenosi Maroo, as of March 31, the municipalities owed the water utility R4,304,342,000.
Emfuleni local municipality is the biggest defaulter with a debt of R888m followed by Ekurhuleni metro with R838m, while Govan Mbeki local municipality in Mpumalanga is behind by R689m.
Merafong local municipality and Tshwane metro owe Rand Water R574m and R382m respectively, while Steve Tshwete local municipality in Mpumalanga owes the least amount – with arrears of R29,000.
Maroo said the non-payment was hampering Rand Water’s ability to generate revenue.
“Our municipal customers take longer than expected to pay their accounts. These delays have a negative impact on the organisation’s working capital. Rand Water is not turning its receivables into cash as desired, therefore has to manage its resources efficiently to mitigate liquidity risk exposure,” said Maroo.
However, Rand Water has come up with measures to manage the debt.
“As part of our efforts to recover [our funds] from the defaulting municipalities and other non-municipal customers, we have implemented numerous measures to manage arrear debt such as developing a new robust customer debt management strategy, adopted in September 2020.
“The strategy is aimed at reducing and eliminating overdue debt; curbing non-payment in customer segments where default occurs, and ensuring that our paying municipal customers do not default. With these efforts, we have witnessed some progress... curbing the exponential growth of arrear debt and recovering long-outstanding debt.” said Maroo.
She said taking legal action against defaulting municipalities is one of the state entity’s ways to recoup the money it is owed. “To achieve this, we are administering and augmenting our revenue and debt management processes...” These include enforcing Rand Water’s rights through legal action, accelerating government interventions and restructuring of the payment terms through various payment relief options,” she said.
kokam@sowetan.co.za
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