With three million South Africans without water, tanks are not enough to address the challenge, the South African Local Government Association has said.
It has also asked municipalities not to disconnect residents' water or electricity during the lockdown, which could lead to some municipalities not being able to pay their Eskom debt.
The association was making a presentation about municipalities' response to the Covid-19 pandemic to the Portfolio Committee on Cooperative Governance and Traditional Affairs on Tuesday.
Its national executive committee held a meeting on 10 April, and acknowledged the pandemic would likely continue to impact on many households' income, and the disconnection of electricity and interruption of water consumption of defaulting households would only worsen the current Covid-19-induced crisis.
The association's chief of operations, Lance Joel, said the reduced collections were likely to negatively affect the ability of many municipalities to service their bulk accounts for water and electricity.
He added they should have a conversation with Eskom.
Joel showed a letter from Eskom to the Ngwathe Municipality in which it declined the municipality's request for a three month payment holiday.
"Eskom is threatening municipalities in the North West with disconnection if they don't service their debt."
The association expects the demand for electricity will be high during the lockdown, which will lead to some municipalities exceeding their notified maximum demand, with Eskom imposing its penalty regime.
"The impact of the Covid-19 pandemic will be felt by municipalities long after the 21-day lockdown has ended. Some of the preventative measures municipalities are required to put in place during the lockdown will be expected to be continued on a long-term basis," read the presentation.
"This is business as unusual - the fiscal ability to respond to the pandemic will be highly constrained by the prevailing economic conditions and further worsened by the lockdown period."
The association told the committee the Covid-19 crisis highlighted the challenges to provide and sustain reliable water supply and sanitation services, particularly to poor and vulnerable communities.
According to its presentation, three million people did not have access to water and reliability was only 63%, adding the majority of unserved communities were in relatively isolated rural areas where the Covid-19 challenge was less acute.
The challenges were too big to resolve with the provision of water tanks and tankers as they were logistically difficult and expensive, costing in the region of R100 million per month, the association said.
Several MPs complained tanks in their constituencies have not been serviced or connected.