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Huge water losses are draining Eastern Cape municipal coffers of half-a-billion rand.
Last year provincial municipalities lost almost half their water through leaking, decrepit infrastructure and illegal water connections.
This was revealed this month by finance MEC Oscar Mabuyane’s written replies to Bhisho legislature.
However, the figures also tell another story; despite these losses of water, municipalities still managed to improve their income from water sales.
Mabuyane stated that provincial municipalities lost over R554m water in potential revenue in 2017, barely less than the R569m which ran down the gutters in 2016.
Municipal water sales dropped from 44% to 38% during the period.
Buffalo City Metro (BCM) lost 40.9% of water supply in the 2015-16 financial year, 34% the following year and 32% of water has been lost so far this year
This translated into losses of R216m – R116m in 2016, and R100m last year.
Despite this, in 2016, BCM earned R494m from water sales, and that figure increased to R551m in 2017.
Even though there was a steady decline in water loss between 2016 and 2017, provincial municipalities lost over half-a-billion rands due to these losses.
Mabuyane’s report, in response to parliamentary questions posed by DA MPL Bobby Stevenson, also shows that while municipal income from water sales declined from 44.5% to 38.5% between 2016 and 2017, the province still made more money from the water sold.
Income went from R2bn in 2016 to R2.1bn in 2017.
This happened while 51.2% of provincial water was lost in 2017 compared to the 49.1% lost in 2016.
Some of this water was lost as a result of dilapidated and aging water infrastructure system which needs some serious attention.
Chris Hani district did take an income blow. Between 2016 and 2017, their water revenue plunged from R293.5m to R128.3m.
Their water leakage also dramatically increased from 14% in 2016 to 37% last year, a situation Stevenson said was “crippling” municipalities in the district.
“This is a dramatic loss in revenue which that municipality cannot afford to lose,” said Stevenson.
According to Mabuyane’s report, the Alfred Nzo district’s water revenue shrank from R25.1m in 2016 to just R14.7m in 2017.
This while their water loss sky-rocketed from 77% or R53.5m to 90% or R86.1m during that period.
On the contrary, Amathole District Municipality (ADM) recorded a positive result in their region.
ADM improved its revenue from a loss in 2016 of R49.3m in water revenue, to a loss of R17m.
In the water-scarce Nelson Mandela Bay Metro, R170m worth of water was lost in 2016, while the following year, that metro lost water valued at R169.7m.
Once again, revenue still managed to improve. The metro made R660m in water sales in 2016, and improved this by R101m making R761m the following year.
The Joe Gqabi district lost R68m worth of water in 2016, and R49m in 2017.
Municipalities under the OR Tambo district lost water valued at R12m in 2016, a figure that escalated to R22m the following year.
Stevenson said something drastic needed to be done to prevent these dramatic water losses.
“This is basically money down the drain!” he exclaimed.
“In a water-scarce province, drastic action needs to be taken not only to stem physical water losses, but also the income flowing from those losses.
“Clearly there is a lack of infrastructural maintenance taking place which is resulting in the continued collapsing of the distribution of water in the province,” Stevenson said.
In another parliamentary report by cooperative governance and traditional affairs MEC Fikile Xasa, dated June 28, it is revealed that R144m a year should be invested in a bid to “renew” water infrastructure in BCM.
Xasa said the amount initially required by BCM was R485m a year.
He said that amount will make it possible for the city to address its water infrastructure backlog “as well as ongoing renewal needs over a 10-year period”.
Based on the current medium-term revenue and expenditure framework, the investment made annually in renewal of water assets in BCM is between R40- and R80m, ” said Xasa in his report.
