No rates hike for Harare — council | The Herald

via No rates hike for Harare — council | The Herald October 29, 2013 by Innocent Ruwende

HARARE City Council will not increase rates in the 2014 budget as residents are failing to pay current bills and have accumulated a US$40,1 million debt since the annulment of all arrears in June.Responding to questions from the business community at a pre-budget consultative meeting yesterday, city treasurer Mr Misheck Mubvumbi said after the debt cancellation ordered by the Government, most residents were still not paying their bills.

The city is also owed US$130 million by corporates and US$47 million by Government departments.

“There was one single rate increase in 2009, since then we have not increased our tariffs,” said Mr Mubvumbi. We have to ask ourselves if we will get anything from residents if we hike our tariffs considering that most of them are failing to pay even after the debt cancellation.

“We do not think it is ripe to raise tariffs given the prevailing environment. Industry is not operating at full capacity, production is low, so we cannot be seen flogging a limping horse. I don’t expect that we will increase rates in 2014.”

Mr Mubvumbi said as a result of cash-flow challenges emanating from outstanding bills, council owed Zesa Holdings US$37,8 million and companies which supply chemicals at least US$6,8 million.

He said council would take stringent debt collection measures and issue summons against defaulters. Council had also embarked on massive water disconnections to force residents to pay up.

Chamber secretary Ms Josephine Ncube said the rate at which the debts were accumulating would create a situation where residents would soon call for another cancellation.

“After the debt cancellation, we expected residents to pay their manageable bills, but you can see how serious the problem is,” she said.

“If we don’t pay for services rendered, we create a difficult situation for the council.”

Representatives from the Consumer Council of Zimbabwe urged council to carry out awareness campaigns to educate residents on the importance of paying rates.

After yesterday’s meeting which was attended by members of the business community, councillors are expected to go into their respective wards and gather residents’ recommendations.

Government directed all municipalities and councils to write off arrears accumulated since 2009 when the multi-currency regime came into force.

This was after it realised that the debts had become a burden for citizens already weighed down by economic challenges spawned by Western-imposed illegal sanctions.

The move saw all domestic ratepayers starting on a clean slate from July after debts accumulated between February 2009 and June this year were written off.

Harare cancelled household debts amounting to US$330 million. This year, Harare City Council presented a US$291 million budget. Of the income, Harare water was expected to raise US$117 million; property tax would bring in US$107 million, while refuse collection was earmarked to account for US$23 million.

The city’s 2012 budget stood at US$272 million.