No Power and Poor Contractors Affect Water and Sanitation Delivery

MTBPS 2024 underlines the need for municipal reform to get basic services delivered

The Medium-Term Budget Policy Statement (MTBPS 2024) illustrates how widespread and unmanaged government dysfunction affects delivery.

This is one of the most illuminating sentences in the MTBPS, found in the Water and Sanitation vote: “No mega regional bulk infrastructure project phases were completed in the first half of the year because of Eskom electricity connections not being available and poor contractor performance.”

These are the sort of issues that we expected the expanded and expensive cabinet to resolve.

“The water vote gives us an indication of the state of the crisis. While the cabinet and politicians cost us a fortune, they are unable to resolve the water challenges. They understand the state of the disaster but don’t have the capacity to do too much about it,” says Dr Ferrial Adam, WaterCAN Executive Manager. WaterCAN is an initiative of the Organisation Undoing Tax Abuse (OUTA).

The Department of Water and Sanitation had planned to complete four mega regional bulk infrastructure project phases in 2024/25, six large regional bulk infrastructure project phases, four small regional bulk infrastructure project phases, but the MTBPS records that it has managed only one of the large project phases so far. Some of these are now due to be finished later in the year.

It also planned to complete 112 small water services infrastructure grant projects and has managed 30 so far.

It plans to assess 1 004 wastewater systems for compliance with green drop regulatory requirements, but the department says none were done yet as they are all scheduled for the third quarter of the year.

There are no blue drop assessments due to be carried out in 2024/25; the February budget noted that these are all scheduled for next year.

The MTBPS cuts R225 million from the department’s budget, which is cut from the Regional Bulk Infrastructure Grant allocation to Drakenstein local municipality, “to align spending with the revised implementation plan and cashflow projections for the municipality’s sanitation infrastructure upgrade project”.

There is some shifting around of funds within the department, including shifting R243 million to the Integrated Vaal River pollution remediation project.

The water sector also faces the ongoing obstacles of municipalities who cannot – or will not – pay for services. The MTBPS records the slow progress on the National Treasury’s debt-relief programme for municipalities indebted to Eskom: 72 municipalities applied for this, with 70 applications totaling R55.2 billion were approved. There is as yet no similar arrangement for addressing municipal debt to water boards, which has left some facing bankruptcy.

The MTBPS says a human settlements white paper is due to address the sustainability of water boards and municipal services.

The MTBPS acknowledges the municipal problem: “Electricity, water, sanitation and waste management services are in long-term decline due to underinvestment in maintenance, rehabilitation and expansion at the municipal level,” says the MTBPS, and adds that the government is now planning “detailed reforms” including a requirement that municipalities produce separate financial statements for each trading service, and “make the financial relationship between the service and the municipality explicit”. The MTBPS promises a performance-based conditional grant to trigger these changes in 2025/26.

“This will be a welcome move and a step in the right direction. For example, in the City of Johannesburg, while there are separate accounts for entities like Johannesburg Water (which runs the City’s water and wastewater services) and City Power, there is no clarity over how much – if anything – the City passes on to the entities of the equitable share grant (intended to fund basic services for indigents) and how much the City takes of the entities’ surpluses or how such surpluses are spent. Transparency on this will be welcome,” says Dr Adam.