Pay for services rendered, minister urges with water revenue collection dropping
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Human Settlements, Water and Sanitation Deputy Minister David Mahlobo on Tuesday called on those who can afford to pay for services that have been rendered to pay up.
“We appeal with the message that even during these economic conditions, the user-pay principle remains important for us,” Mahlobo said.
He made the statement when he led the department’s delegation to brief the human settlement, water and sanitation portfolio on the 2019/20 annual report.
“Those people who can afford to pay should be able to pay up,” Mahlobo said.
He also said for those who can’t afford to pay, there is a security net that was built for free basic water, free basic electricity and others.
“That provision has always been made in the Equitable Share to municipalities. We will continue to support municipalities,” said Mahlobo.
He joined the meeting virtually while being part of a delegation led by Deputy President David Mabuza on an oversight visit to Maluti-a-Phofung Municipality, which has electricity and water disruptions due to debt owed to Eskom.
In its annual report, the department said raw water billing was substantial, but revenue collection was failing.
It also said water pricing was based on the “user-pay” principle and tariffs from users provide a significant cash inflow to the sector with billing of raw water of about R 16 billion per annum to more than 85,000 users.
“Billing and collection is a major administrative and operating challenge with such a large user base revenue management within the department is not optimal and not properly structured/geared to address the billing and collection challenges that exist.”
The report said municipal accounts represented about 50% of the accumulated raw water debt at the Department of Water and Sanitation, while water boards added another R1,7 billion, which was mostly also due to non-payment by local municipalities.
This prompted questions from some MPs who raised concerns that the Water Trading Entity was not taking steps to recover money owed.
Acting director-general Deborah Mochotlh said there were a number of efforts taken by the department to collect revenue.
“We have gone as far at some point attaching properties of certain municipalities,” she said, adding that there were forums such as the inter-ministerial committee on service delivery and discussions at MinMEC.
“There are various discussions. It is not like Water Trade Entity is not collecting revenue,” Mochotlh said.
Pressed on attaching properties, Mahlobo said there were options to get a court order to enforce agreements entered into just like Eskom was doing.
However, Mahlobo said they were invoking inter-governmental relations framework, a process led by Mabuza working with Cogta Minister Nkosazana Dlamini Zuma and Human Settlements, Water and Sanitation Minister Lindiwe Sisulu, including Salga.
He said if non-payment of services continued, there would be a stage where water boards would collapse.
“If we have continued escalation of debt, operational costs will be impacted,” Mahlobo said.