A burst pipe in Industrial Park road, Phoenix caused major water loss across the suburb in October last year. Incidents like this are adding to the eThekwini Municipality’s massive revenue losses. Picture: Motshwari Mofokeng/African News Agency (ANA)
A burst pipe in Industrial Park road, Phoenix caused major water loss across the suburb in October last year. Incidents like this are adding to the eThekwini Municipality’s massive revenue losses. Picture: Motshwari Mofokeng/African News Agency (ANA)

Ethekwini’s R1bn revenue loss

By Thami Magubane Time of article published Jan 27, 2021

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Durban - WATER losses are costing the eThekwini Municipality a fortune and have resulted in a drastic decrease of the city’s revenue.

The three big trade services, water, electricity, and sanitation have cost the city close to a billion rand in losses.

About 51% of the city’s revenue for water is lost, the national benchmark should be between 15% and 30%

A budget statement for the month ending December 31, 2020 painted a dire state of affairs for the municipality.

Its key trade services, water electricity and sanitation recorded a downward trend in generating revenue.

The city blamed this on the impact of the Covid-19 pandemic and that some businesses were not fully operational yet.

But DA councillor Nicole Graham said the water losses were abnormal, above the acceptable norm and could not be justified.

“The losses are due to ageing infrastructure and leaks. The losses in water, electricity and sanitation have cost the municipality close to a billion rand.” she said.

IFP councillor Mdu Nkosi said council had long been warned about the losses.

“In electricity, it is used by people who do not pay but use the most, there have long been talks that the officials should find ways to regularise this and collect the money.”

In its report, which the city detailed the losses, it said water revenue had decreased by R720.3 million when compared to the year to date budget and this was mainly due to a decrease in revenue generated from water service charges.

For sanitation, where the revenue is linked to water usage, the decrease by R362.7m when compared to the year to date budget was also attributed to slow economic recovery.

In cleansing and solid waste, there was a decrease in revenue by R148.5m when compared to the year to date budget.

The report also said for water distribution losses, the municipality had reported a ratio of 51.7% which is not in line with the expected norm, however, this was being investigated as there are some high meter readings, which are distorting this ratio.

The benchmark ratio for water losses is between 15-30%.

For electricity distribution losses, the municipality had reported a ratio of 11.8% which is above the norm of between 7 -10%. It said this was due to the transmission/distribution losses and illegal connections.

Ednick Msweli, eThekwini’s head of Water and Sanitation said one of the challenges with water was that it was supplied to areas where people do not pay or were not metered.

The report also revealed that the city’s finances had been battered by the Covid-19 and lockdown which had led to a decrease in the revenue collection rate, cash flow constraints and it had been forced to reprioritise expenditure to address the pandemic.

The Mercury

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