Does government corruption / incompetence come into play in making this situation worse than it should be?
Of course there is a political dimension.
The SA national government (ANC) is from a different party to the Cape Town local government (Democratic Alliance, the main opposition party).
So there is tension between local and national governments. They try to make each other look bad.
Hard to prove, it it does look like the National government is either just neglecting Cape Town or deliberately encouraging it to fail.
And they are corrupt, particularly the national government, yes.
https://www.biznews.com/undictated/2017/12/15/cape-town-wate...
https://www.biznews.com/thought-leaders/2016/12/05/sa-water-...
http://ewn.co.za/2017/02/12/report-water-and-sanitation-depa...