(Bloomberg) — South Africa’s treasury plans to withhold funds from five municipalities next month for unpaid water bills as part of an effort to force local governments to pay for basic services.

The Treasury will invoke a law to allow authorities to block the payment of a so-called fair share of money that is allocated to municipalities to pay for services including water and electricity, according to a department presentation to parliament on Tuesday. Matjhabeng, Kopanong, Thabazimbi, Merafong City and Victor Khanye municipalities are affected by the decision, the statement said.

“The aim of interventions should be to restore financial stability, improve service delivery and ensure good governance in struggling municipalities,” the Treasury said.

South African water boards are owed 23.4 billion rand ($1.3 billion), more than 70 percent of which are four months overdue. The debt hampers their ability to maintain and upgrade aging infrastructure at a time when commercial centers including Johannesburg are facing shortages.

South African municipalities have faced a culture of non-payment for services since the apartheid era, when urban and rural residents boycotted rent and other utility charges in protest against the country’s white minority government. Municipalities remained paying poor after the end of apartheid in 1994.

The five municipalities were scheduled to receive 483 million rand on December 4 and another 362 million on March 12, according to the National Treasury. Funding will only be released when local authorities have made arrangements to pay the relevant water boards, it said.

Matjhabeng and Kopanong owe the Vaal Central water board 7.8 billion rand, while Thabazimbi owes the Magalies board 216.5 million rand and Merafong City and Victory Khanye owe the Rand water board 1.54 billion rand. Both the Vaal and Magalies councils are facing imminent bankruptcy, according to the Department of Water and Sewerage.

As well as suspending funding, Treasury and the water department are also helping to renegotiate repayment agreements between water authorities and municipalities.

They are also finalizing a debt cancellation mechanism that would allow water authorities to “wipe out a municipality’s historical debt if the municipality has established a history of paying current bills in full,” said Sean Phillips, the water department’s general manager. , told parliament.

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