JOHANNESBURG – The City of Johannesburg needs R64-billion to fix its water supply problems.
In his Budget Speech on Wednesday, Finance Minister Enoch Godongwana said that while national government can intervene, municipalities must stop cross-subsidising basic service revenue.
Godongwana said that although the City of Joburg collects R11.9-billion in water revenue from residents, very little is spent on critical infrastructure.
Only R1.3-billion is allocated to Joburg Water for capital expenditure.
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“Although you have paid for water, it does not mean that the money you have paid for water is going to maintain water services it goes into the whole big pot. What comes out into maintaining water services is only a billion rand. The implications are services, there is no maintenance of the water system,” the minister said.
Godongwana said this contributed to the massive backlog of R64 billion that is now needed to fix water supply problems in the city.
“If this practice of collecting revenue from basic services while diverting the funds to unrelated functions continues, maintenance backlogs will grow, services deteriorate and critical infrastructure systems eventually collapse."
To address this, R27.7-billion has been allocated over the medium term to a performance-linked reform programme for metro trading services, including electricity, water, sanitation and solid waste.
“This is the first step towards matching revenue collection to reinvestment in the same service. The reform, however, goes beyond the performance-based grant structure. It entrenches operational and financial management reform. Under the new system, failure to meet reform and operational targets will result in budgets being reduced.”
Godongwana said the measures aim to strengthen accountability and governance, enabling long-term infrastructure investment.
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Qualifying municipalities, including eThekwini and the City of Johannesburg, have begun implementing council-approved improvement plans to ring-fence revenue and reinvest in water and electricity services.
Water expert Mike Muller said the way funds are managed in the City of Johannesburg remains confusing. Although Joburg Water collects revenue from residents, the money is paid into an account controlled by the City.
“Joburg Water’s accounts must be ring-fenced. The money that comes for water must go for water and it must be accounted for water. Once that is done, we can support Joburg Water’s turnaround strategy, which includes fixing existing infrastructure and spending more money intelligently on operations.”
Muller added that cross-subsidisation has made it difficult for the entity to hire critical staff.