“If the municipalities that owe water boards fail to provide proof that they have fully paid the outstanding amounts owed to the respective water boards then the local government equitable share (LGES) of those municipalities will be stopped and only be released to the municipality in portions with conditions,” reads the letter.
“It is advisable that parallel to the LGES withholding process, Rand Water, Vaal Central, Lepelle Northern and Magalies Water enforce their credit control policies to also attach the bank accounts of the defaulting municipalities to enforce a change in behavior of these municipalities.
“The same applies to all the water boards in order to avoid a similar situation and prevent escalating debt across water boards.
“This letter serves as a consultative mechanism with you in terms of section 38(2)(c) of the MFMA [Municipal Finance Management Act] with regard to the intention of the NT [national treasury] to invoke section 216(2) of the constitution by stopping the transfer of the 7 July 2025 tranche of the equitable share and all the grants to be transferred to the 39 municipalities.”
He asked Hlabisa’s office to make a written representation by July 7 before he finalises his decision to stop the transfers to the 39 identified municipalities.
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