The money exists in the books but not in the bank. A parliamentary briefing this week showed how Johannesburg’s finances and its failing water network are tied together.
For two months, one number has hung over Johannesburg’s water crisis: R4 billion. On the evening of Tuesday 18 November 2025, Parliament’s Portfolio Committee on Water and Sanitation finally heard what the Auditor-General’s office and National Treasury had found when they looked at the city’s books. The answer satisfied almost nobody. The money owed to Johannesburg Water is properly recorded, the auditors said, but the city does not have it in cash.
How the R4 billion became a scandal
The controversy began in September, when Department of Water and Sanitation Director-General Sean Phillips, who co-chairs the water workstream of the Presidential Johannesburg Working Group, told Parliament that about R4 billion belonging to Johannesburg Water had been taken back by the City of Johannesburg. The revelation landed in the middle of one of the worst periods of outages the city had experienced, with suburbs such as Coronationville and Westbury going without water for weeks and residents queueing at tankers.
The city pushed back. Officials argued that the figure was being misunderstood, at one point describing it as an estimate of what was needed over time rather than money that had disappeared. The portfolio committee was unconvinced. On 19 September it issued a statement criticising what it called a lackadaisical attitude from the executive mayor, Dada Morero, and said it would ask the Auditor-General to analyse what had happened to the money. In October the Democratic Alliance lodged an application under the Promotion of Access to Information Act to obtain the underlying records.
What the auditors found
At the 18 November briefing, the Auditor-General’s representative, Msizi Mavundla, confirmed that the R4 billion is correctly accounted for. The city’s books acknowledge a debt of R4 billion to Johannesburg Water, and Johannesburg Water’s books record the same amount as owed to it. In response to a question from the DA’s water and sanitation spokesperson, Stephen Moore, Mavundla said that “the cash balance of the city of Johannesburg is less than the R4-billion”. Moore later said this meant that, on the city’s own unaudited figures at 30 June 2025, the entire municipality did not hold R4 billion in cash and cash equivalents.
The mechanism behind the dispute is known as sweeping. Under this arrangement, cash collected by the city’s municipal entities is pooled into central accounts, and the entities then draw on the city for what they need. National Treasury told the committee that the arrangement had left entities that generate a surplus, such as Johannesburg Water, unable to meet their own obligations to service providers and contractors. The Auditor-General’s Sindisiwe Zama described how Johannesburg Water had to ask the city for specific amounts each day to pay suppliers, and how payments from the city often arrived late or short.
The auditors did not lay all the blame on sweeping. They found that the arrangement accounted for about 30 percent of the delays in paying service providers and contractors, with the remaining 70 percent caused by inefficiencies inside Johannesburg Water itself. Moore and other committee members disputed that split, saying managers at the entity had given them a very different picture.
A network under strain
The briefing also offered one of the clearest public pictures yet of the state of Johannesburg’s water system. According to the Auditor-General’s findings, as reported by Daily Maverick, the number of burst water pipes rose from 20,729 in the 2023/24 financial year to 33,436 in 2024/25, an increase of more than 60 percent in a single year. Johannesburg Water managed to restore only 67 percent of bursts within 48 hours in 2023/24, against a target of 85 percent.
Water losses remain severe. As of June 2025, the city was losing about 32.94 percent of the water it supplies, valued at around R2.8 billion. Physical losses through leaks and bursts accounted for 23.72 percent, worth about R2.03 billion, while commercial losses from illegal connections and metering errors made up 9.22 percent, worth roughly R790 million. Failing infrastructure has also forced Johannesburg Water to spend more than R30 million on emergency water tankers, a cost it cannot recover from residents.
The findings were not limited to drinking water. The auditors raised a material irregularity at the Goudkoppies Wastewater Treatment Works in the south of the city, where ageing and malfunctioning equipment, including rusted pipes, cracked concrete and ineffective treatment processes, had led to pollution of water resources and non-compliance with environmental law. It is a reminder that the same financial pressures that leave taps dry also leave sewage works unable to protect the rivers downstream.
An IOU is not accountability
For civil society, the auditors’ careful framing missed the point. WaterCAN executive director Ferrial Adam told Daily Maverick that the question was not whether the debt had been recorded, but what the money had actually been spent on. In her view, an acknowledgement of debt between the city and its own water utility does not explain how R4 billion approved for water infrastructure was used. She argued that redirecting money approved by council for water to other purposes breached the Municipal Finance Management Act, even if it was not theft, and noted that Johannesburg Water’s current capital allocation of about R1.7 billion falls far short of what the network needs.
The national government has so far declined to take a harder line. In a written reply to a parliamentary question from Moore, the ministry said there had been no need for the minister to investigate the Director-General’s claims about the diversion. That leaves Parliament, the Auditor-General and civil society as the main sources of pressure on the city.
Why it matters beyond Johannesburg
The R4 billion dispute is about more than one city’s accounting. It goes to the heart of a question facing water services across South Africa: whether money paid by residents for water is reinvested in water infrastructure, or absorbed into general municipal spending. National policy is moving firmly in the direction of ring-fencing. The Water Services Amendment Bill and the second phase of Operation Vulindlela both favour water service providers that keep their revenue separate and are held to clear performance standards. Just days before the Johannesburg briefing, the department launched a ring-fenced utility in Emfuleni built on exactly that principle.
The politics are also sharpening. Johannesburg will go to the polls in the 2026 local government elections, and civic groups have already begun campaigning under the banner No Water, No Vote. The Auditor-General’s briefing confirmed what many residents suspected: that the city’s water crisis is not only a story of ageing pipes, but of money that did not go where it was supposed to go. Whether the R4 billion is ever paid back in cash, and whether that cash is spent on the network, will be one of the clearest tests of the city’s commitment to fixing its water.
References
Daily Maverick: R4bn diverted from Joburg Water, Auditor-General says cash exists on paper (19 November 2025): https://www.dailymaverick.co.za/article/2025-11-19-r4bn-diverted-from-joburg-water-auditorgeneral-says-cash-exists-on-paper/
Democratic Alliance: City of Joburg does not have in cash the R4 billion it owes to Joburg Water (19 November 2025): https://www.da.org.za/2025/11/da-exposes-that-the-city-of-joburg-does-not-have-in-cash-the-r4-billion-it-owes-to-joburg-water
Parliament of South Africa: Portfolio Committee concerned by lackadaisical approach to Joburg water challenges (19 September 2025): https://www.parliament.gov.za/press-releases/media-statement-lackadaisical-approach-joburg-water-challenges-concerns-committee
EWN: Morero flooded with questions in Parliament over Joburg water crisis (19 September 2025): https://www.ewn.co.za/2025/09/19/morero-flooded-with-questions-in-parliament-over-joburg-water-crisis
The Herald: DA, Joburg, WaterCAN in standoff over alleged R4bn water budget diversion (18 September 2025): https://www.theherald.co.za/news/2025-09-18-da-joburg-watercan-in-standoff-over-alleged-r4bn-water-budget-diversion
Democratic Alliance: DA submits PAIA to find the truth behind Joburg’s missing R4bn (10 October 2025): https://www.da.org.za/2025/10/da-submits-paia-to-find-the-truth-behind-joburgs-missing-r4bn
Parliamentary Monitoring Group: Question NW6152 to the Minister of Water and Sanitation: https://pmg.org.za/committee-question/33932/