Water boards owed billions by councils
Minister Nkwinti has raised urgency in implementing strategies to restore stability of cash-strapped entities
WATER and Sanitation Minister Gugile Nkwinti yesterday said the billions owed to water boards was a matter of concern.
Nkwinti said, however, there was now an inter-ministerial task team (IMTT) tackling the debt owed to water boards as well monies owed to municipalities and Eskom. He was referring to the IMTT led by Co-operative Governance (Cogta) and Traditional Affairs Minister Zweli Mkhize.
The IMTT was established last year to quell legal action by Salga against the National Electricity Regulator of SA (Nersa) over electricity distribution amid litigation involving Eskom in its attempts to recover monies owed by struggling municipalities.
In June, Mkhize told the Standing Committee on Public Accounts that the overall municipal debt stood at R23 billion in December – with R7.4bn owed to water boards and R16bn to Eskom.
“Right now we are dealing with this collectively with the minister of Cogta. There seems to be an understanding that is emerging,” Nkwinti said.
Nkwinti made the statement when he led a departmental delegation to brief the water and sanitation on governance issues at water boards falling under his portfolio.
Briefing Parliament, deputy director-general Lindiwe Lusenga told of financially stricken water boards, some reconstituting their boards and others without chief executives.
Lusenga said Amatola Water was in urgent need to implement a turnaround strategy to restore stability, and that it had debt provision increased due to non-payment by Makana Municipality.
“The rate of converting debtors to liquid cash remained far too long to service creditors.”
Bloem Water was owed R917 million as at July and R82m by the Department of Water and Sanitation. “This has had a serious impact on cash flow/ financial status and operation of the board.”
The nomination of new board members was not approved by the Cabinet in September, she said.
Nkwinti said the Cabinet raised questions on the skills of the new nominees.
“The skills of the people who have been nominated are very inadequate given the challenge facing the board,” he said.
Lusenga also said financial management at Lepelle Northern Water was a concern and it struggled to collect debt from Mopani Municipality and the department.
“The Special Investigation Unit (SIU) and the Public Protector have been investigating allegations of misconduct against some projects in Lepelle.”
The Magalies Water experienced challenges of non-payment by Thabazimbi and Modimolle municipalities.
Lusenga also said six out of eight current board members lodged a complaint with Nkwinti when theywere not considered for re-appointment.
“Legal opinion was obtained on the matter and a letter has been written to the chairperson of the selection panel to provide reasons why the eight board members were not shortlisted or considered for re-appointment on to the new boards.”
Nkwinti said the complaint pointed to people thinking they were entitled to serve on the boards as long they completed their terms totalling the maximum 12 years provided in law.
“They want to go the whole walk. When they are not appointed, they
CRITICAL think there is something wrong. That is what they did,” he said. “That is what I am dealing with. I would like to leave it there until we report back on the outcome,” Nkwinti added.
Lusenga said Nkwinti has decided to restart the appointment of the Sedibeng Water board, which was appointed in April 2017.
Nkwinti said legal opinion they received showed that the appointment by his predecessor Nomvula Mokonyane ought to have been done through a normal and transparent process as opposed to making appointments.
Lusenga also said Sedibeng’s chief executive resigned after being on suspension and an acting person was in the post.
Sedibeng Water has high outstanding debt and non-payment from Matjhabeng, NamaKhoi and ngaka Modiri Molema municipalities. “This has an effect on financial performance and the debt recovery targets.”