Staff Reporter
Bloemwater says it has offered the struggling Mangaung Metro Municipality a 35 percent discount on its outstanding of R1.1 billion water supply debt to help ease the city’s financial burden.
In a statement, the local water board said it reached the settlement deal on Wednesday and hoped the municipality will stick to the new payment terms so that it pays up the bill.
“Mangaung’s outstanding debt of approximately R1.1 billion was discounted to R715 million with some interest and drought tariff charges written off,” read part of the statement.
The agreement, said Bloemwater, follows efforts by the national treasury to assist the municipality.
The settlement amount will be paid in instalments of R20 million until fully paid.
“The agreement is also in the wake of a national treasury mediation process followed during February 2019, where the resolution was to write off R311 million by Bloemwater so as to support the recovery plan of Mangaung Metro,” the statement said.
The first instalment to be made by Mangaung will be on February next year.
Additional remittances from the metro’s revenue such as equitable share from national government and water receipts will be made to reduce the settlement amount.
“The metro further proposed . . . that all its debt owed by the provincial Department of Public Works will be ceded to Bloemwater,” the statement said.
“Furthermore, there shall be an interest charge moratorium on the settlement amount debt and Mangaung shall strictly comply and adhere to the settlement agreement provisions on payment of the settlement amount and monthly current accounts.”
Several parts of Bloemfontein as well as Thaba Ncube and Botshabelo were left without water about a week ago after Bloemwater reduced water supplies to the municipality by 30 percent in a bid to force it to pay up.