How UMngeni-uThukela Water is tackling R3 billion debt while enhancing financial management

The uMngeni-uThukela Water, which is owed more than R3 billion by various municipalities, says it is leading in the country with improved financial management and water delivery to KwaZulu-Natal leaving behind its counterpart in other provinces.

The entity released its 2024/2025 financial year annual report at an event held in Umhlanga, north of Durban, on Tuesday.

The entity’s chief financial officer, Thami Mkhwanazi, said the entity was owed R3.1bn in overdue debts. 

“Msunduzi owes us R1bn, King Cetshwayo District Municipality owes us R1bn, Ugu District owes us R560 million then we have Uthukela District at R134m,” said Mkhwanazi.

He said other municipalities were owing small amounts.

The entity’s board chairperson Advocate Vusi Khuzwayo told the media that the entity’s  sustainability, financial discipline had led to service continuity owing this to its dedication and professionalism of the employees. 

“If you were to dwell on how much we are owed, you will ask yourself, how do we do all these other things and still get positive results, hence we say it is dedication and professionalism of our employees,” said Khuzwayo.

Khuzwayo said the entity’s achievements were due to looking after its employees, including paying them “very well”. 

“You will be surprised how much we look after our employees and we hardly hear that such and such has poached an employee of Umngeni/Uthekela Water because we are focused and we have satisfied employees and these are the results,” he said.

He said he was looking forward to the next financial year with no qualified audit report.

“We will be talking about something which is higher at level because we got enough grass to feed where we needed to feed,” he said. 

He said Umngeni/Uthukela has performed well in providing water to the agricultural sector to provide food security. 

“You will note that in newspapers you read about Gauteng without water, and such and such running without water, but in this province, we have not gone to that level,”  said Khuzwayo.

However, he raised a concern while the entity was supplying water, some communities were not getting it from various municipalities.

He said to improve water accessibility more water storage dams were under construction.

He said Gwadini Storage Dam in Umdoni, south coast, at the estimated cost of R1.5bn and Lower Umkhomazi Water Works at about R7.8bn were being built.

He said a R2bn tender had been awarded for the Upper Umkhomazi water project.

He said the Lower Umkhomazi Water Works was also under construction at the estimated cost of R7.8bn although this has been delayed by legal challenges, which he said could will be finalised by February 13. 

Khuzwayo said the entity was working on building a trustworthy governance structure to attract investments. 

“Without integrity, transparency we cannot hope to secure the investment from both public and private investors, which is needed to build the infrastructure of the future. 

“Some of the projects require investments and funding which is not what we can afford as the board. 

“In order for the board to secure such funding, governance becomes the question that needs to satisfy the potential investors.

“I can assure you that we are going to market in March to raise R7bn,” he said. 

He said recent negative media coverage of uMngeni-uThukela Water was a concern as it might create doubts among the investors. 

UMngeni-uThukela chief executive officer Sandile Psychology Mkhize said the board had overspent its budget because it was remunerating board members for holding more meetings than it is supposed to. 

This, he said, was because the board had to hold extra meetings for the finalisation of the integration of uMngeni with uMhlathuze Water to form uMngeni-uThekela Water Board, the process that started on June 1, 2023.

He said the law mandated that the board should hold six meetings per annum, but because of the transition, it has been holding 11 meetings per year.

“As a result, instead of four ordinary board meetings and two special board meetings, we ended up having 11 board meetings.

“It means that the board was working overtime to ensure that the institution remains viable and efficient,” he said.

Mkhize said he was pleased that the entity had scored 97.5% in terms of key performance indicators (KPI), which he said was the highest performance that the water boards had ever achieved in the country.

He said this was an improvement from the results, which Water and Sanitation Minister Pemmy Majodina released last year indicating that uMngeni-uThukela had scored a performance of 96%.

“We have achieved a performance of 97.5% in terms of achieving predetermined objectives and targets that we have contracted with the minister and this is according to audited information.

He said the entity had scored a revenue of more than R6.68bn.

He said delays in the construction of the Greater Bizana water project through the termination of a contract with a contractor caused the entity to lose some of its revenue.

“Because of that termination and the appointment of the new contractor, this delayed us in getting the project rolling and earning revenue,” Mkhize said.

He said while the whole country was losing 40% to 50% of bulk water, which cannot be accounted for, the board was pleased that its avoidable water losses in the province was only 3.5%.

“This means that we are ensuring that water ends up with the consumers, which are the water service authorities and industries that we are supplying,” said Mkhize.

He said while the entity had invested R11m in the corporate social investment, it earned a surplus of R1.4bn.

 bongani.hans@inl.co.za