Vaal Central & Magalies Water Boards 2024/25 Annual Reports; with Deputy Ministers

Video Vaal Central Water  Magalies Water Board The Portfolio Committee on Water and Sanitation met virtually to receive briefings on the 2024/25 Annual Reports of Vaal Central Water, and Magalies Water Boards. The Department of Water and Sanitation provided a high-level overview of the water sector's performance, focusing on slide headings such as Overview of Financial and Operational Performance, Irregular Expenditure and Infrastructure Challenges, and Financial Interventions and Debt Management. The Department noted that while most water boards achieved over 88% of their planned targets and maintained unqualified audit outcomes, the sector remains under significant pressure due to ageing infrastructure and a R6 billion liquidity crisis driven by municipal non-payment. Vaal Central Water presented its annual performance, structured around headings including Governance and Compliance, Financial Performance Overview, and Operational Highlights and Challenges. The entity reported significant progress in expanding its service area following the disestablishment of Sedibeng Water. However, it continues to grapple with inherited infrastructure debt and high levels of water losses. The presentation detailed the entity's efforts to stabilise its financial position through new billing systems and debt recovery agreements with defaulting municipalities, which are critical for its long-term sustainability. Magalies Water detailed its activities through slide headings such as Strategic Overview and Mandate, Performance Against Service Level Agreements, and Financial Health and Sustainability. The entity highlighted its role in providing bulk water services across multiple provinces but noted that its financial performance is severely hampered by the non-payment of major municipal customers like the Madibeng Local Municipality. The presentation also covered progress on key infrastructure projects, including the Brits Water Treatment Plant, which has faced delays due to mechanical installation requirements and municipal coordination issues. During the discussion, Members of the Committee raised several critical concerns regarding the financial viability of the water boards. Key questions focused on the effectiveness of the Department of Water and Sanitation’s intervention strategies, specifically whether withholding equitable share allocations from municipalities would yield actual payments or further cripple local service delivery. Members expressed alarm over the R3.1 billion in irregular expenditure reported across the boards and questioned the lack of consequence management for officials responsible for fruitless and wasteful spending. There was also significant focus on the "inherited" problems from Sedibeng Water, with Members urging the boards to stop using historical baggage as an excuse for current operational failures. Further points of concern included the slow pace of infrastructure maintenance, which has led to high non-revenue water losses and frequent supply interruptions in areas like Johannesburg and Madibeng. Members pushed for firm completion dates for long-delayed projects and criticised the lack of proper site maintenance at various construction points. The Committee also scrutinised the transition from invoice-based to cash-based VAT payments, questioning whether this internal adjustment would be sufficient to resolve the deep-seated liquidity issues caused by the culture of non-payment by municipal entities.