By: Zandile Majavu
The decision by Rand Water to reduce the water supply to municipalities defaulting on payments will cripple small businesses that depend on water in a short period of time, warn commentators. Rand Water expressed concern at the beginning of the month over escalating debt caused by municipalities failing to honour their bulk water purchase agreements and debt settlements with the utility.
On top of this, many businesses in large parts of Johannesburg are again experiencing water outages due to issues at the Eikenhof substation. National African Federated Chamber of Commerce (Nafcoc) president Gilbert Mosena told Vutivi News that negotiations between the government through municipalities and locals must improve “I know for sure that people from small businesses say that they are prepared to pay, but they cannot pay all those exorbitant amounts because some of the calculations from the municipality side were wrong,” said Mosena.
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He added that what needed to be initiated was a flat rate for at least about a year while they were still fixing their problems. Mosena said the billing system was unfair because, in some cases, big businesses paid less compared to their smaller counterparts. “We, as small businesses, are part of the communities, and we have always said that people do not want to pay amounts that we dispute or do not know how they came about. Let’s agree on a flat rate for 12 to 24 months; otherwise, it will affect businesses if the water supply is cut. Industries will be affected, and from there, businesses will be closed, leaving people unemployed,” said Mosena.
Amid the water restrictions, the Department of Water and Sanitation continues to liaise with the City of Joburg to resolve the water outages in the metro. DA shadow MMC for water, power, and environment, Nicole van Dyk, said in a press release that the lack of water had a dire economic impact as many businesses must close doors during the dry spells and for safety reasons.
The longer the problem persisted, the more jobs could be lost. Independent political analyst Dale McKinley agreed that the water issues impacted businesses, particularly small enterprises and the township economy, as they had for so many years because people could not afford to pay for everything at full cost without subsidies when they also had to pay for water, electricity, and income.
“It is an anti-poor and anti-working class policy when basic services such as water are commodified, especially for those people who depend on social grants and cannot afford, a situation where spiraling debt exists is inevitable,” McKinley said. He further said that the fundamental problem with the debt that had been incurred by local government authorities was the national government’s decision to stop providing basic services for free many years ago for people who could not afford them.
“This forced the government to go for cost recovery, in other words, stop providing prepaid meters and force people to pay. When the economic climate is combined with corruption, you get escalating debt. It’s a budgetary and governance issue,” McKinley said.
