WaterCAN says promises to ringfence water and sanitation revenue will remain meaningless unless Johannesburg Water has predictable and immediate access to the money it needs to pay suppliers, repair infrastructure and keep the city’s water system operating.
The organisation is deeply concerned by reports that Johannesburg Water remains unable to meet its financial and operational obligations, despite public commitments by the City of Johannesburg that revenue generated from water services would remain within the utility’s coffers from 1 July.
WaterCAN has learnt during a Presidential Working Group meeting that the practice of sweeping Johannesburg Water’s accounts has continued into the new financial year.
The City has reportedly swept more than R6 billion from the utility’s bank accounts over the current term of office. These transfers have been treated as loans to the shareholder without fixed repayment terms, leaving Johannesburg Water unable to predict when funds will be returned or made available for operational needs.
WaterCAN has repeatedly raised concerns about the City’s sweeping-account system, through which money collected by Johannesburg Water is transferred into the City’s central accounts.
The consequences of this cashflow crisis extend far beyond delayed infrastructure projects. Johannesburg Water is reportedly struggling to pay for essential operational costs, including telecommunications for depots, which directly affects the coordination of repair teams. Contracts for water tankers and the servicing of chemical toilets are under pressure, while critical maintenance and infrastructure projects have stalled because contractors cannot be paid. Communities are left waiting longer for repairs as leaks, bursts and sewer spills continue to increase.
WaterCAN believes sustained pressure from the organisation and its civil society partners contributed to the Presidency’s National Water Action Plan identifying the ringfencing of water revenue as part of its strategy to stabilise water services authorities across the country.
“The real test of ringfencing is not whether a decision has been announced. The real test is whether Johannesburg Water has the cash it needs to keep water flowing,” said Dr Ferrial Adam, Executive Director of WaterCAN.
“You cannot claim to be protecting water revenue with one hand while taking away the cash needed to keep the system running with the other. Ringfencing means nothing if the utility cannot access its own money when it needs to pay contractors, maintain infrastructure and provide emergency services.”
WaterCAN acknowledges that the City is facing severe financial constraints and that there are no quick fixes. However, residents deserve honesty and transparency about how essential services will be protected while the City works to restore its finances.
The crisis also exposes a broader problem within the City. Johannesburg Water is not the only municipal entity under financial strain. If City Power cannot pay its creditors and electricity supply becomes unreliable, Johannesburg Water cannot pump, treat and distribute water. These entities do not operate in isolation; the financial distress of one service quickly affects another, leaving residents to bear the consequences.
WaterCAN is calling on the City to urgently answer several critical questions:
What is the immediate plan to pay contractors so that maintenance, repairs and infrastructure projects can resume?
How will Johannesburg Water continue to provide emergency services, including water tankers and sanitation services, if suppliers are not being paid?
What is the timeline for restoring Johannesburg Water’s financial stability so that it can operate effectively?
WaterCAN believes Watercom should formally escalate Johannesburg Water’s financial crisis as a matter requiring urgent intervention.
“This is no longer simply an operational challenge. It is a financial crisis that is undermining the City’s ability to provide a basic service and demands action at the highest levels of government,” Adam said.
“And this is the first real test for Watercom. If it is serious about addressing the country’s collapsing water infrastructure, it should start with the City of Johannesburg. Don’t tell residents how many projects are planned. Tell them whether Johannesburg Water has the money to implement them.”
WaterCAN is also calling on the City of Johannesburg to:
Publicly disclose the precise mechanism through which water and sanitation revenue is being ringfenced.
Confirm whether Johannesburg Water has direct and predictable access to its revenue.
Make a firm commitment to end the practice of sweeping Johannesburg Water’s cash into the City’s general accounts without clear and enforceable repayment arrangements.
Disclose how revenue from water tariffs, fixed levies and surcharges is allocated and spent.
Ensure that infrastructure grants and loans are linked to named projects, budgets, deadlines and publicly reported progress.
WaterCAN said these measures should be independently monitored through structures including the Presidential Johannesburg Working Group, with National Treasury and the Department of Water and Sanitation providing oversight where necessary.
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