A decision by national government to approve water tariff increases for KwaZulu-Natal-based Umgeni Water has put the entity on a collision course with SA Local Government Association (Salga), which believes the move will strain municipalities.
Salga, an umbrella body that represents municipalities across the country, said on Tuesday that the Umgeni Water board has made substantial profit for the 2021/22 financial year, arguing that the increase is unwarranted.
“While Salga members grapple with Eskom tariff increases, the organisation tried to influence the Umgeni Water board members to refrain from applying for an increase above 3%,” said Thamsanqa Ntuli, Salga chairperson in KwaZulu-Natal.
“When this was unsuccessful, Salga requested that the national government refrain from approving the application for tariff increases.
“It was pointed out that despite a zero-percent increase in the tariff for potable water in the previous year [2021/2022], Umgeni Water was able to record a profit of R1.22-billion.”
Ntuli pointed out that the historically high increases had placed the Umgeni Water board in a favourable financial position while customers, municipalities, and consumers continued to struggle.
Ntuli stated: “For municipalities to be able to afford this tariff, it will mean they must impose a higher tariff hike on their customers.
“The approval is a double whammy for KZN municipalities that have been at great pains to explain to government and society that exorbitant increases only lead to water losses due to increases in illegal connections.”
These developments happen as national government contemplates introducing drastic measures to deal head on with municipalities who fail to pay for water bills, which has put some water boards in a precarious financial position.
In 2022, a parliamentary portfolio committee revealed that about R16-billion was owed to water boards across the country.
The Department of Water and Sanitation, the custodian of the water entities, revealed that some of the draconian measures it might introduce to reduce the hefty bills owed to water boards was to withhold equitable share to offending municipalities.
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