Joint Statement by ANC Study Groups On Human Settlements, Water and Sanitation and Cooperative Governance and Traditional Affairs on the 2020/21 Water Board Tariff Increases

29 July 2020

On 28 July 2020, the Portfolio Committee on Human Settlements, Water and Sanitation held a follow-up meeting on the Joint Meeting held on 2 June 2020 with the Portfolio Committee on Cooperative Governance and Traditional Affairs on the tariff determinations by Water Boards and South African Local Government Association (SALGA).

Water Boards are Schedule 3A entities of the Public Finance Management Act (PFMA) and supposed to be self-sustainable. In their operation, Water Boards must strive to be financially viable in terms of section 34 of the Water Services Act. The tariff process for the current Financial Year was concluded on 13 March 2020 as per Section 42 of the Municipal Finance Management Act (MFMA) and Circular 23, whereas the State of Disaster (due to COVID-19 pandemic) was declared on 26 March 2020.

The stakeholders that were involved in the tariff determinations presented to the joint Portfolio Committee after the process of tariff determinations had been concluded. This was a serious note of concern to the ANC, as Parliament, which is an oversight body, was not included as a stakeholder during the consultation process for Raw Water Charges.

The ANC also notes, with concern, the various issues that are clouding Municipalities and Water Boards and their ability to discharge their mandates. The issue of the Department of Water and Sanitation being the player and referee in the water tariff process needs to be looked into. As the ANC, we are pleased that after consultation with National Treasury, a proposal was made for the establishment of an Independent Regulator on tariff determination. We believe this will resolve this matter and as the ANC, we will ensure that the legislative process is spearheaded in Parliament.

The ANC welcomed President Ramaphosa announcement of the “extraordinary Coronavirus budget” of R500 billion which would be injected into the economy. We were made aware that of this amount, R20 billion would be allocated to Municipalities for emergency water supplies, public transport, food and shelter for the homeless people. We wish to call on the Department of Water and Sanitation to ensure that from this allocation, support is given to Municipalities and Water Boards struggling to collect revenue due to the Coronavirus.

Whilst the ANC welcomed the numerous calls made by the Minister on Municipalities to suspend cutting water supply for the duration of the lockdown as Government has called on citizens to practice hygiene by washing their hands on a regular basis, we are aware that this has negatively affected the Water Boards’ ability to collect revenue from Municipalities.

After having deliberated on the presentation made by the Water Boards and SALGA today on their continued implementation of tariff increases, despite our previous calls for them not to increase their water tariffs, the ANC wishes to condemn this decision with the contempt it deserves.

After due consultations, the ANC wishes to express its rejection on the increased water tariffs and calls on the Department of Water and Sanitation to engage SALGA and Municipalities with the aim of ultimately lowering their water tariff rates in their Municipal adjustment budgets. Section 28 of the Municipal Finance Management Act (MFMA) states that:

“28. (1) A municipality may revise an approved annual budget through an adjustment budget”.

The ANC thus calls on SALGA to ensure that it utilizes the legislative prescripts in place to adjust the tariff determinations downwards as we believe that this will assist in cushioning our people from the devastating effects of the COVID-19 pandemic.

Issued jointly by the Whips of the ANC Study Groups on Human Settlements, Water and Sanitation and Cooperative Governance and Traditional Affairs, Cde Robert Mashego and Cde Dikeledi Direko.

For more information, contact Nomfanelo Kota

Acting Caucus Spokesperson on 067 415 1089