The Umgeni Water banners seen on a road. Umgeni Water Board (now uMngeni-uThukela Water Board) is owed more than R1 billion by municipalities. File picture: Independent Newspapers
Durban - Municipalities are not paying their water bills and owe the former Umgeni Water Board more than R1 billion.
In June this year, Umgeni Water was amalgamated with uMhlathuze Water to form the uMngeni-UThukela Water Board.
On Thursday, the board of the amalgamated entities tabled a report on financial performance for the 2022-2023 financial year for one of the amalgamated entities.
Due to the fact that the financial results pre-date the amalgamation, the board said it would table the results of Umgeni Water and the then-uMhlathuze Water Board separately.
The results tabled on Thursday were for the then-Umgeni Water Board for the 2022-2023 financial year and those of Umhlathuze for the same period will be tabled in the near future.
The uMngeni-uThukela chief financial officer Thami Mkhwanazi said the municipal debt was a serious concern.
He declined to name the municipalities that are in arrears, saying it was improper to name and shame them at this stage, but said the names would appear in the annual report when it’s released publicly.
Mkhwanazi said looking at the age analysis of the debt, municipalities were taking too long to pay or not paying.
“There is R1.2 billion overdue. Of that, an amount of R580 million I have to write off because the prospect of collecting is starting to be remote. We reported a profit of R1.1 billion and if the municipalities had been paying and paying on time we could have reported close to R2 billion in profit,” he said.
The CFO continued: “The bulk supply agreements that we sign with municipalities who are our customers says they must pay us within 30 days, so if we are showing 44 days it means that there are 14 days on average that they do not pay us. In a perfect world, we would want to see 30 days as a payment term. So we do have a big challenge around some municipalities not paying us on time,” he said.
He said not all municipalities were tardy with payments.
“I would like to make mention that eThekwini does pay us on time, all the time. That actually helps us because they are our major customer. If they were not to pay us on time, our sustainability would be at risk.”
He said some municipalities that have accounts in arrears have engaged with them to make payments and avoid having water restrictions imposed.
“We have implemented restrictions for some of the customers this year, and issued notices to two other customers. (Those) have come forward to make payment plans,” he said adding that the water board was sensitive to the impact on households if supply was restricted.