In a statement yesterday, the Water Utility said it is owed a cumulative amount of R4,1 billion by Municipalities.
Its function is to serve its customers, mainly Municipalities, to secure potable bulk water.
About R2, 9 billion, is owed by Gauteng municipalities, R1,2 billion by those in Mpumalanga, and R58 million from the Free State.
The utility also said it operates without any form of allocation from the national fiscus and relies solely on funds collected from municipalities.
“The payment patterns of municipalities have deteriorated to concerning levels that threaten the liquidity, financial performance, and sustainability of Rand Water.”
So urgent is the situation, that Rand Water has invoked the provisions of Section 41(1) of Intergovernmental Framework Act (IRFA) and declared an intergovernmental financial dispute to request an intervention from the National Treasury and Co-operative Governance and Traditional Affairs.
“Rand Water has also requested the Hon. Minister of Finance and National Treasury’s assistance in curbing this escalating debt by withholding the aforementioned defaulting municipalities December 2023 equitable shares payout, until amicable agreement with a down payment to maintain cash inflow that will enable Rand Water to meet its short- and medium-term obligations.”