Water Boards governance; Metro Trading Services Reform for Municipal Water Debt; with Deputy Ministers

Video The Portfolio Committee on Water and Sanitation met to discuss critical issues surrounding the Amatola Water Board, including the recent suspension and reinstatement of the Chief Executive Officer, and the measures taken to prevent water boards from falling into bankruptcy. The Department of Water and Sanitation (DWS) acknowledged the significant increase in the debts owed to and by municipalities, particularly concerning Eskom, the water boards, and DWS. The water boards, in particular, were grouped into four categories based on the level of municipal debt they faced, with group one categorised as being in immediate risk. It was indicated that Vaal Central Water and Magalies Water could go bankrupt based on their current financial trajectories unless municipalities, particularly Matjhabeng Local Municipality and Kopanong Local Municipality, start paying their current invoices in full. The noted impediment to the functionality of these boards was that they do not receive operational subsidies from the government and without payment from major municipal clients, these boards face severe financial strain. The current situation was said to pose a significant risk, as municipalities might begin to believe they would continue receiving treated water even if they failed to pay their bills. To counter the issue, a possible increase in income tax or VAT would be required. Upon concerns posed by the Committee Members on the lack of interventions that yield results, it was explained that bodies such as National Treasury are significantly constrained concerning municipalities due to Sections 139 and 154 of the constitution. Under Section 139, National Treasury can only intervene when a municipality reaches a state of total collapse as the law requires that provinces step in first. The Amatola Water Board presentation was postponed as the Minister was not available. This was not well received as the Minister’s apology had not been approved by the Committee’s Chairperson. Upon deliberations, Members agreed to postpone the meeting as the Minister’s presence was crucial because she was at the core of the actions taken regarding the Amatola Water Board. Suggestions were also put forward for the meeting to convene during recess to avoid further delays.