Covid-19 & Water in Metros: A National Treasury discussion about key issues and financial impact: 29 April 2020

This CSP (IGR-NT) convened discussion was attended by 67 participants from metros, sector departments and other organisations -receiving inputs from all 8 metros on the financial impact on municipalities of water and sanitation responses to COVID-19. The meeting identified areas of immediate support to cities to address: (1) the imperative to rapidly improve water and sanitation services in informal settlements, a key risk for the rapid spread of COVID-19, with devastating health and economic consequences; and (2) The very serious financial impacts of COVID-19 on the viability and sustainability of water services as a result of the economic impacts of the shut-down and recovery periods.

Preliminary remarks

• Discussion not about more money.
• NT overview & guidance
• Economic and financial context very difficult and will get worse.
• This is a marathon and not a sprint
• Carry on billing, but anticipate reduced revenues & reduced cash flow
• Anticipate additional spending, but can repurpose conditional grants
• Stay on core mandate and don't spend on unfunded mandates
• Be careful of decisions with long-term consequences (eg. recruitment, additional service obligations, service choices)
• NT CSP role limited to technical assistance
  
  
  
  Short term/immediate issues
• Existing stresses are made worse
• E.g., drought, NRW, poor payment levels, under-maintenance
• Service standards in IS are very low
• One toilet per 10 households
• Cleaned/emptied once per week
• IS are not a permanent feature in metros (not going away, but growing)
• Short-term response in metros in IS appears to depend largely on
• Chemical toilets for additional services. These are expensive, what happens later on?
• Water Tanks and tankers for short term response. These are expensive, what happens later on?
• Reallocation of resources
• Substantial additional budgets in some metros in 2019/20, but what about 2020/21, and is this sustainable?
• In short term, most can be funded by reallocations, but outlook for 2020/21 is unclear.
• Anticipated reduction in staffing availability was a risk mentioned only in some metros. Is this risk being addressed adequately?
  
  Medium term issues
• Managing in a much more difficult economic and financial context
• Higher expenses
• Lower affordability
• Reduced revenues (initial estimates look very significant, even for 2019/20)

Higher costs of borrowing (still to come)

Documents

NT - metro water covid financial impact