Durban - Umgeni Water is facing a new emerging risk because of municipalities that are unable to make payments to the utility for water.
This was revealed in the Umgeni Water 2020/2021 report under risk management, released on Thursday.
Umgeni Water is a state-owned enterprise established to supply potable water in bulk to municipalities. Its customers include eThekwini and Msunduzi municipalities and the district municipalities of uMgungundlovu, iLembe, Ugu, Harry Gwala, and King Cetshwayo.
Umgeni Water stated that of its seven customers, at least four remain unable to meet their financial commitments for water services provided in accordance with agreed debtor days.
“Mutually agreed payment plans have been finalised with some of them or are in the process of being finalised.
“Economists predict that economic growth is likely to be between 2% and 3% over the next five years; this is not adequate to generate employment to any significant degree.
“The consequence is that of worsening municipal revenue collection,” said the report.
Despite this, the report stated that a surplus of R1.28 billion was achieved.
Chairperson of the board Ziphozethu Mathenjwa said the money would be used to implement key infrastructure projects to ensure water resource security.
The budget for the five-year capex programme 2020/2025 is R14.52bn. Of this amount, R4.92bn is for rural development projects.
“Revenue totalled R4.5bn, which was an increase of R374 million from the prior year. The total asset base increased by R645m. Approximately R284m was spent on key rural development projects which will enhance security of supply and reduce water backlogs,” Mathenjwa said.
Construction of numerous infrastructure projects was delayed for up to eight weeks due to Covid-19-related restrictions and disruption of international supply chain processes that make importation of infrastructure and mechanical components possible.
Touching on irregular expenditure, Mathenjwa said the board would ensure that people were held accountable.
“We do not shy away from consequence management. We have nine disciplinary matters that were completed. We have 12 disciplinary matters that should be concluded by June 2022.”
Dealing with the issue of disruption in water supply, Mathenjwa said there needed to be a better level of communication between Umgeni Water, the municipalities and consumers, especially when planned maintenance work was being undertaken.
Board member and eThekwini councillor Visvin Reddy said the municipality was losing revenue and water because of ageing infrastructure.
“Non-revenue collection sits at 54%. This can be attributed to theft of water and hundreds of water meters not being calibrated and reading correctly,” said Reddy.
Thirteen water treatment plants operated by Umgeni Water recorded excellent performance against all risk categories specified in the SA National Standard 241:2015 regarding drinking water specifications.
Mathenjwa said good progress continued to be made with the implementation of two uMkhomazi bulk water supply schemes; the lower uMkhomazi and the uMkhomazi water project.
Daily News