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.
- 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)
NT - metro water covid financial impact