Johannesburg - Finance Minister Tito Mboweni has set stringent rules for the Rand Water and Umgeni Water boards. This comes as Mboweni has authorised Umgeni to borrow up to R4.8 billion and Rand Water almost R45 million as bank guarantees for a period of over three years for their respective projects.
“If there are any delays in the projects, the entity should provide reasons for such delays,” he said, adding that the bank guarantee should not in any of the three years exceed R15 million.
In a Government Gazette published last Friday, Mboweni said Umgeni Water could be granted up to R2bn for the financial year ending June 2020, R1.4bn in June 2021 and R1.4bn for June 2022. The amounts, Mboweni said, reflected the maximum balance of interest-bearing debt the entity could have as at the end of the financial years.
“This means that for as long as Umgeni Water has an interest-bearing debt on its statement of financial position (or balance sheet), it is not allowed to exceed these limits.
“The authorisation expires on June 30, 2022, and a new authorisation will be considered on expiry, provided Umgeni Water has borrowings recorded in its statement of financial position,” he said.