Johannesburg Water needs urgent national intervention, says WaterCAN

WaterCAN has learned that Rand Water, the bulk water supplier to Johannesburg, is preparing to exercise its option to demand a three months’ deposit of about R2.5 to R2.7 billion. This is about a billion Rand more than Johannesburg Water’s Capital Expenditure Budget and is the result of repeated missed payments by the City of Johannesburg’s water utility.

Following discussions with the Presidential Working Group on Wednesday, of which WaterCAN and its civil society partners are active members, they were informed that Johannesburg Water is not only failing to pay contractors, but that Rand Water may now demand a deposit as the utility continues to fall behind on payments for bulk water purchases.

WaterCAN Executive Director Dr Ferrial Adam said the unavoidable conclusion is that neither Johannesburg Water nor the City of Johannesburg is currently capable of managing the city’s spiralling water and associated debt crisis.

“This much is clear and why we think that the President’s water committee must intervene. Johannesburg Water cannot pay contractors and currently owes creditors approximately R650 million, including about R370 million owed to Rand Water. Furthermore, Johannesburg Water cannot reliably access or plan around its own revenue due to the continued use of sweeping money from its account,” said Adam.

In this context, “sweeping” refers to the city moving money out of Johannesburg Water’s bank accounts into the city’s main account, typically to manage broader cashflow pressures. In effect, the budget may exist on paper, but the utility does not have the cash available in practice to meet operational needs.

WaterCAN warns that continued sweeping of Johannesburg Water revenue is now directly undermining the utility’s ability to stabilise the system, pay contractors, and deliver urgent infrastructure upgrades needed to prevent recurring outages across Johannesburg.

At the same presidential working group meeting, civil society was informed that Johannesburg Water has reportedly identified 17 reservoirs for refurbishment, with tenders expected to go out by June.

“While this is a good plan, how will Johannesburg fund and deliver critical reservoir refurbishment and resilience projects if money is continuously swept out of their account, ring fencing is absent, and a Rand Water deposit requirement becomes the dominant cash priority?” said Adam.

Adam added that Rand Water is fully aware of the severe financial constraints facing Johannesburg Water and must recognise that enforcing a massive upfront deposit in this context risks pushing an already distressed utility closer to operational paralysis.

“Rand Water knows the predicament that Johannesburg Water is in. The question that must be asked is whether this move amounts to a power play that could deepen the crisis rather than help resolve it,” she said.

Adam said WaterCAN’s position is clear:

“You cannot repair, refurbish, and stabilise a collapsing system when the water utility’s revenue is treated as a floating pool for other needs. The result is predictable: contractors are not paid, planned maintenance slips, outages deepen, and public trust collapses.”

WaterCAN calls for:

1. Decisive national intervention that moves beyond ministerial deployments and secures an immediate resolution to Rand Water’s demand for a deposit, as a three month upfront payment would completely cripple Johannesburg Water’s ability to operate and maintain essential services.
2. Immediate ring fencing of Johannesburg Water revenue, backed by a transparent and publicly disclosed mechanism that ends the ongoing sweeping of funds.
3. A detailed 30, 60, 90 day cash flow recovery plan that sets out how Johannesburg Water will clear contractor arrears and maintain uninterrupted operations.
4. Full disclosure of the budget allocation for the 17 reservoir refurbishments and the precise sources of those funds.

“Johannesburg residents are already paying the price for a system in distress. Continuing to drain Johannesburg Water’s operational capacity will collapse any attempt to rebuild a very broken system,” said Adam.