(Archive photo: Pixabay)
The growing debt of the Lesedi local municipality, which serves Heidelberg, to Rand Water has now forced the institution to reduce bulk drinking water to the local authority by 20%.
The municipality owes Rand Water more than R27 million and has recently failed to make several scheduled payments for water.
Rand Water says it informed the authority in writing on 14 April of its intention to reduce bulk water to the municipality within 30 days of sending the letter.
The notice outlined the reasons for the proposed reduction, reminded the municipality of its legal and contractual obligations, gave the authority time to inform its own customers and make alternative arrangements, and gave the municipality the opportunity to make submissions on the proposed reduction.
After the notice was sent, the Lesedi municipality asked Rand Water to reconsider the reduction. This request has been properly considered, says Rand Water. However, the municipality subsequently still failed to make its payment. Rand Water was consequently forced to introduce the reduction because the parties could not come to an amicable agreement.
“The decision to reduce bulk drinking water by 20% was necessary to prevent a further escalation of the municipality’s debt. This has increased since its failure to fulfill the signed contract for bulk water supply,” says Rand Water.
There were also several meetings about it and still the municipality has not settled its outstanding debt.
“The situation is untenable because it poses a threat to Rand Water’s medium-term and long-term financial sustainability. It is important to mention that Rand Water is operated without any form of financial allocation from the national fiscus. This means that the institution relies completely on the income it collects from its customers, mainly municipalities, in order to fulfill its legal obligations.”
Rand Water says it remains committed to providing drinking water to all its customers, provided they pay for the service.
However, he is not going to allow a situation where financial sustainability is threatened due to non-paying municipalities.