Hon Speaker and hon members, in response to the question asked by the hon member Wenger from the DA, I would like to indicate that the total amount outstanding owed by the municipalities to the water boards as at 31 December 2011 amounted to R2,1 billion. We have a detailed breakdown of this outstanding amount, which will certainly be circulated with this response. I just want to also say that 9 out of 12 water boards were owed R1,1 billion by municipalities as at the end of December 2011.
The highest debt was in three water boards dealing mainly with the rural areas which are Sedibeng District Municipality and Bushbuckridge and Lepelle-Nkumpi Local Municipalities. Together they owed R1 billion. This is as a result of the structural challenges that are faced by those water boards that are delivering water in the most rural areas. One of the contributing factors is the fact that there is also poor management of consumer demands and payments by those municipalities who are responsible for retail services. More importantly, though, these are areas where you find mainly the indigent.
The debt age analysis indicates that a significant part of the debt is over 120 days. Bushbuckridge has been owed, for example, over the last two years. The debt has been unpaid for more than 120 days. The impact of this is that those water boards are actually unable to the expand provision of water services to the communities, and also the inability to achieve their mandates. Credit rating is also affected. The tariff increase is also affected negatively by the current debt.
However, the water boards' annual sales are almost R1 billion, and the debt add up to only about 10% of the annual sales to municipalities. There have been financial disputes in these municipalities which are affecting them, and the department did not sit back. We have intervened. Amongst others, the interventions deal with the very complex process of getting into meetings with separate parties to actually resolve those; collecting relevant data and documentation; analysing that documentation; preparing reports and recommendations; and also obtaining comments from other departments. We are working with Treasury and the Department of Co- operative Governance and Traditional Affairs, Cogta, in this regard.
The department, Treasury as well as Cogta have also done the interventions in Sedibeng, as alluded to in the document. We have an outstanding amount of about R14 million, and Matjhabeng Local Municipality is duly paying monthly, but some of the debt is being disputed. The dispute is being handled though. Thus in Bloem Water vs Kopanong Local Municipality, we have also intervened. To date, the board received part of the payment. This also applies to Lepelle Water vs Mopani District Municipality, where the head of department and the provincial head of Cogta are also supporting that municipality in terms of resolving that dispute. It is the same in Bushbuckridge.
I would like to indicate that broadly, in the department, we are currently finalising the work on institutional realignment that is intended to ensure that we lead to a situation where the water boards that are wealthier or that are empowered actually function in the areas that are poorest. Thank you. [Time expired.]