Bulk water utility Rand Water has announced that it will reduce bulk water supply to the Merafong municipality, in Gauteng, by a further 20% after the parties were unable to find a solution to the more than R1.4-billion owed by the municipality to the utility.

Rand Water says the municipality has, after months of deliberation, continuously refused to honour its debt payments to the utility.

The decision to reduce the bulk potable water supply by a further 20% was necessary to prevent further escalation of the municipality's debt that has accumulated owing to its failure and refusal to fulfil the bulk water supply contract entered into with Rand Water. 

The municipality will experience low-pressure water supply with immediate effect.

"This situation is highly untenable and destabilises Rand Water’s financial position as it poses a direct threat to its medium- and long-term sustainability. It is important to mention that Rand Water operates without any form of allocation from the national fiscus and, thus, relies solely on funds collected from its customers, primarily municipalities, to fulfil its obligations," the utility points out.

Rand Water asserts that it will not allow a situation where its financial stability is placed at risk because of defaulting municipalities.

"Financial sustainability ensures that Rand Water continues with its legal obligation to supply potable bulk water to all its customers, including municipalities. This would also encourage the organisation to continue financing the construction and augmentation of bulk water infrastructure and undertake appropriate maintenance of its extensive network," it adds.