Councils can’t pay for water

2019-12-11 06:01
Umgeni Water’s chief executive Thami Hlongwa, chief financial officer Lungi Mkhize (centre) and chair of the board Ziphozethu Mathenjwa toasting to another successful year for the water utility.PHOTO: NOKUTHULA NTULI

Umgeni Water’s chief executive Thami Hlongwa, chief financial officer Lungi Mkhize (centre) and chair of the board Ziphozethu Mathenjwa toasting to another successful year for the water utility.PHOTO: NOKUTHULA NTULI

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SOME KZN municipalities have to scramble every month to pay Umgeni Water due to illegal connections and non-payment by consumers.

The utility’s chief financial officer, Lungi Mkhize, said they had a challenge with some municipalities not being able to pay them on time.

While Umgeni was doing very well financially — with a surplus of R1,4 billion in 2018/19 — and would not be needing a bail out like other state-owned entities, it might have to consider writing off some of its debt because some municipalities struggled to pay.

Mkhize said some councils relied on the equitable share — a grant from National Treasury — to settle their debt with Umgeni.

At the end of the financial year under review, on June 30, Umgeni was owed R600 million and that included overdue debt of about R200 million. On its financial statements, Mkhize said, the utility made a provision of about R50 million that could be difficult to recover from municipalities.

She said they would be using the inter-governmental platforms to try and come up with payment plans for the challenged municipalities.

“Fortunately, the two municipalities where we have challenges of revenue collection are our smaller customers in terms of contribution to the revenue … but we are monitoring in terms of how we are going to get the money back to Umgeni.”

Umgeni’s biggest customers are eThekwini and Msunduzi.

Umgeni’s chief executive, Thami Hlongwa, said paying for water was still not seen as a priority in many households, as a result people either illegally connected themselves or simply did not pay the municipalities.

He said the problem was huge and impacted negatively on financial viability of councils so both government and water service authorities needed to teach the public about the importance of paying for water.

Hlongwa said they first needed to deal with the lack of appreciation of water that was displayed by many members of the public.

“The cost of 1 000 litres of water, on an average household, is R23 to use at your convenience. But communities can go and buy a half-litre of [bottled] water at a garage for R11, but then say they can’t afford to pay R23 for 1 000 litres at their homes,” he said.

“That is the message that I think we need to drive home, critically, so that the masses understand that water is actually cheap but very expensive when it’s not there.”

Hlongwa said communities also needed to be reminded that it is against the law to illegally connect their properties to any of the government services. He said if people were connected the right way, and paid for the services, that would ensure sustainable supply.

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