Cash crunch: Water dept scrambles to pay off R1.5bn debt

2017-05-25 18:10
Nomvula Mokonyane

Nomvula Mokonyane

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Cape Town – The water and sanitation department has to reprioritise money earmarked for municipalities in order to pay off R1.5bn debt, Minister Nomvula Mokonyane said on Thursday.

On top of that, a wish list of future projects worth R2.2bn for the upcoming financial year was under pressure due to the current budget crunch.

Mokonyane tried to convince MPs that the R1.5bn being taken from the regional bulk infrastructure grant's R6bn budget was not urgently needed and would not affect crucial projects.

"All our programmes stretch beyond one financial year. Others even backdates from the previous administration," she told the water and sanitation portfolio committee.

Some of these projects were completed before the start of the new financial year. In other words, the regional projects that would no longer be funded were either already finished, or did not need to be finished this year, she claimed.

'I don't buy it minister'

The debt was owed to various contractors roped in to help with emergency drought interventions around the country over the last two years.

ANC MPs and chairperson Lulu Johnson were satisfied, but opposition MPs were not having it.

"This is the third different version we received in two days," DA MP Leon Basson said.

"Your own department in their own version told us that they are short of R1.3bn, and some of the projects will be stopped. This is going to have an effect on municipalities. I don't buy it minister, I don't believe it."

Mokonyane reiterated that some of the programmes were not dependent on the fiscus, but on grants from Treasury and the municipal infrastructure support agent.

"They are projects that can be implemented outside our annual performance plan."

'We need to agree'

ANC MP Hlomane Chauke said Treasury had signed off on the department's plan. He said he was happy to rather reach an agreement with the department on when it should report back on how the repayment of the debt was going.

"There's never been a clear understanding from the department."

He was more concerned with the R2.2bn the department would forego for future projects, and who would lose out. If these projects were meant for service delivery, they should be accommodated.

Basson said he was standing his ground, and was concerned that local municipalities and current projects would be affected.

Mokonyane said various water boards owed the department money. These were in turn owed money from municipalities.

The Sedibeng Water Board owed the department's water trading entity R1.7bn, but local governments owed it R2.8bn.

Governance issues and local budgets were the problem.

'We are not Eskom'

"Our [financial] pressures have nothing to do with our core mandate. Our pressures have more to do with interventions," she said, referencing the emergency drought interventions.

"We are not Eskom. We can't switch off the tap."

She said they would find ways to ensure municipalities paid the water boards, and that the boards paid them, through tripartite agreements.

They would start handling debt collection themselves, rather than using third-party agencies.

Both ruling and opposition MPs were satisfied with that strategy.

The committee would debate the department's final 2017/18 budget on Friday.

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