• ACTis has raised two flags for Joburg Water and placed one under monitoring.
• The Joburg Water Board’s composition, characterised by limited sectoral expertise and members who are politicians or closely affiliated with political parties, alongside a potentially questionable executive management team, presents an immediate leadership weakness. The independence and effectiveness of decision-making could be undermined if allegiance to political parties and the consolidation of political networks override a focus on public service.
• Compromised leadership is strongly associated with weak governance and internal controls within state-capture dynamics. Instances of poor regulatory compliance and deficiencies in management and Board oversight of financial reporting have been found in Joburg Water. Repeatedly high numbers of material findings in recent years may indicate that these trends have become entrenched. This is reflected in questionable financial and procurement decisions, which ACTis will continue to monitor for signs of state capture and corruption.
• These systemic patterns affect operational performance. A lack of maintenance and capital investment has led to a 32.9% water loss valued at R2.8bn. Residents have experienced repeated, prolonged water outages, in some cases lasting up to 20 days. Weak revenue collection has reduced the funding available to address this, feeding a downward cycle.