Municipal debt to water boards stands at R23.7bn and continues to grow, Parliament hears

CAPE TOWN - The National Treasury will withhold money from three municipalities next month in efforts to prevent the Vaal Central and Magalies Water boards from imminent bankruptcy. 

Another two will face the same action for outstanding debt to rand water. 

But the National Treasury won’t be allowed by law to pay the water boards directly. 

Minister of Water and Sanitation Pemmy Majodina has on Tuesday revealed in Parliament that despite intervention attempts, the municipal debt to water boards continues to grow and it's now standing at R23.7 billion. 

The department said the Vaal Central and Magalies Water boards will face bankruptcy within the next six to 12 months if municipalities don’t cough up.

The Matjhabeng Municipality is by far the biggest defaulter owing Vaal Central a whopping R7.2 billion followed by Kopanong Municipality. 

Matjhabeng’s monthly water bill without interest is around R70 million.

Water and Sanitation Minister Majodina said that municipalities are ignoring payment agreements. 

"Nothing has changed. Things are getting worse. Local municipalities don’t really want to honour what they’ve signed," Majodina. 

Meanwhile, Water and Sanitation Director General Sean Phillips said even if all other municipalities pay their debt the Magalies Water board will collapse if Thabazimbi doesn’t pay. 

The National Treasury says withholding the equitable share allocation due to municipalities on 4 December 2024 is only a temporary measure to force municipalities to at least pay what’s currently due to water boards. 

Merafong City and Victor Khanye municipalities will also have their allocations frozen for debt owing to the Rand Water board.