The escalating Merafong Local Municipality’s (“MLM”) debt has prompted Rand Water to implement the reduction of bulk potable water supply due to its failure to settle its account. After months of deliberation, the two parties could not find an amicable solution as the municipality continuously refused to honour its account with Rand Water.
The municipality will experience a low-pressure water supply with immediate effect.
To date, the MLM owes Rand Water R1 412 550 670.18 (One Billion, Four Hundred and Twelve Million, Five Hundred and Fifty Thousand, Six Hundred and Seventy Rand and Eighteen Cents).
This situation is highly untenable and destabilises Rand Water’s financial position as it poses a direct threat to its medium and long-term sustainability. It is important to mention that Rand Water operates without any form of allocation from the national fiscus, thus, relies solely on funds collected from its customers, primarily municipalities, to fulfil its obligations.
The decision to reduce the bulk potable water supply by a further 20% was necessary to prevent further escalation of the MLM’s debt that was accumulated due to its failure and refusal to fulfil the signed Bulk Water Supply Contract. Although Rand Water had on many occasions extended the olive branch, the municipality did not indicate effort and initiative to negotiate payment terms for the liquidation of the exponentially growing debt.
On 12 June 2025, the Johannesburg High Court afforded MLM with 30 (“thirty”) days within which the MLM was required to submit its written representations to Rand Water by no later than 30 July 2025. However, the municipality submitted its representations after the deadline. Upon review of the submission, it was evident that the municipality had no intention of fulfilling its obligations. As a result, Rand Water had no choice but to proceed with the reduction of the pressure by a further 20%.
The decision to implement the stringent credit control measures ensures compliance to the provisions of the Promotion of Administrative Justice Act No.3 of 2000 (PAJA). This Act is necessary to hold municipalities accountable and to prevent further escalation of water services debts.
It is important to emphasise that the organisation will not allow a situation where its financial stability is placed under risk because of defaulting municipalities. Financial sustainability ensures that Rand Water continues with its legal obligation to supply potable bulk water to all its customers, including municipalities. This would also encourage the organisation to continue financing the construction and augmentation of bulk water infrastructure and undertake appropriate maintenance of its extensive network.
Rand Water remains committed to serving its customers and ensuring long-term security of potable bulk water supply to ALL its customers with the corresponding duty to pay for these services.
