By Charmaine Ndlela
Rand Water, the bulk water supplier to Johannesburg, is preparing to exercise an option to demand a three months’ deposit of about R2.5 to R2.7 billion from Johannesburg Water after repeated missed payments by the city’s water utility, civic group WaterCAN said.
WaterCAN said it was told in discussions with the Presidential Johannesburg Working Group on Wednesday that Johannesburg Water is not only failing to pay contractors, but that Rand Water may now demand a deposit as the utility continues to fall behind on payments for bulk water purchases.
WaterCAN Executive Director Dr Ferrial Adam said the unavoidable conclusion is that neither Johannesburg Water nor the City of Johannesburg is currently capable of managing the city’s spiralling water and associated debt crisis.
“This much is clear and why we think that the President’s water committee must intervene. Johannesburg Water cannot pay contractors and currently owes creditors approximately R650 million, including about R370 million owed to Rand Water. Furthermore, Johannesburg Water cannot reliably access or plan around its own revenue due to the continued use of sweeping money from its account,” said Adam.
WaterCAN warned that continued “sweeping” of Johannesburg Water revenue is undermining the utility’s ability to stabilise the system, pay contractors and deliver urgent infrastructure upgrades.
“Sweeping” refers to the city moving money out of Johannesburg Water’s bank accounts into the city’s main account to manage cashflow pressures, leaving the utility without cash to meet operational needs, even where budgets exist on paper.
Civil society was told the utility had identified 17 reservoirs for refurbishment, with tenders expected to go out by June.
“While this is a good plan, how will Johannesburg fund and deliver critical reservoir refurbishment and resilience projects if money is continuously swept out of their account, ring fencing is absent, and a Rand Water deposit requirement becomes the dominant cash priority?” asked Adam.
She said that Rand Water must weigh the risk that enforcing an upfront deposit could worsen operational strain at an already distressed utility.
“Rand Water knows the predicament that Johannesburg Water is in. The question that must be asked is whether this move amounts to a power play that could deepen the crisis rather than help resolve it,” she said.
Rand Water’s response will be included once received.
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