Why Rand Water and a Gauteng municipality are at odds over a 500 million rand debt

Rand Water and the local municipality of Emfuleni clashed over the settlement of millions in debt accumulated over six years.

  • The local municipality of Emfuleni has failed to repay millions in debt to Rand Water.
  • The water board has taken legal action to recover 500 million rand.
  • The municipality says Rand Water tried to take over a sewage treatment plant to settle the debt.

Rand Water and the local municipality of Emfuleni clashed over the settlement of millions in debt.

The municipality’s account with the water board was over R500 million, prompting Rand Water to attempt to collect the debt through the courts and agree to the transfer of the municipality’s assets at the end of Last year.

The dispute has been going on for several years.

The latest spat came after the municipality issued a statement on Friday, in which it said the water utility had tried to take over the Sebokeng sewage treatment plant to collect the debt owed.

The municipality claimed to have honored a payment agreement, which had been put in place with Rand Water in December 2020, but had defaulted in August due to the seizure of the municipal bank account by Eskom.

Payments then resumed between September and November.

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However, in December last year, Rand Water demanded a payment of 500 million rand, according to municipal spokesman Makhosonke Sangweni.

A meeting was held on Wednesday December 29, attended by Rand Water, the Municipality and the South African Local Government Association.

At this meeting, a strategy was put in place to pay the outstanding amount, Sangweni said.

On Thursday January 13, 252 million rand was paid to Rand Water, he said.

However, less than a month later, Rand Water seized the municipality’s account again.

Sangweni said:

Negotiations followed – and during negotiations Rand Water CEO Sipho Mosai insisted that the water board wanted to take over the Sebokeng sewage treatment plant from the municipality in place of the debt owed.

But, according to Rand Water, the decision to seize the municipality’s assets came after a long struggle to collect the debt.

Rand Water said it has “reached numerous settlement agreements” with the municipality.

“The municipality has reneged on each of these settlement agreements. Further, the settlement agreement itself (December 2020), to which the municipality refers in its statement, has not been fully complied with on its own,” the board said. waters.

Not only did the municipality fail to meet the payment provisions of the settlement agreement, but it also continued to overpay its checking account, Rand Water said.

The water board said it had “exhausted” attempts to get the municipality to settle its “ever-growing debt”.

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Rand Water approached the courts as a “last resort to curb mounting debt and secure payment”.

As a result, the deal became the subject of a court order, which was issued in June.

Despite this process, the municipality defaulted on its debt and Rand Water went to court again.

A writ of execution was issued on December 17 and the High Court Sheriff seized the municipality’s bank accounts to liquidate the judgment debt.

“Following negotiations resulted in the municipality agreeing to a payment in the amount of R253 million and considering our proposal for the municipality to offset the remaining part of the debt with its real estate,” said the board.

However, when the time came to transfer ownership to Rand Water, the water board discovered that the Sebokeng sewage treatment plant had been built on property owned by the provincial government.

He also insisted that the transfer of the plant was an idea of ​​the municipality, and not at the instigation of Rand Water.

Rand Water then determined that there was no real estate of value to seize to settle the outstanding judgment debt and reissued the writ to the municipality’s bank account.

In December, the municipality owed Rand Water more than 400 million rand and offered to make a payment of 253 million rand. However, he reneged on that deal, the water board said.

Sangweni declined to comment on Rand Water’s statement, referring News24 to the statement released Friday.

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