via Broke councils write off debts •Industries, corporates set to benefit •Move tailored to buoy bill payments | The Herald August 20, 2014 by Innocent Ruwende
Most local authorities have resolved to write off debts and offer up to 50 percent discounts to commercial, industrial and institutional customers as an incentive to encourage them to settle their debts. This comes against the backdrop of serious defaulting by these institutions, which are citing the prevailing economic challenges.
However, the reprieve will not benefit residents as councils said they benefited from a Government directive to cancel debts shortly before the July 31, 2013 harmonised elections.
Most councils say they are failing to provide basic services as they are owed over US$500 million in unpaid bills by residents, Government departments, industry and commerce.
Government and residents are the biggest debtors, councils say.
However, some of them have decided to offer between 40 and 50 percent discounts as a way of encouraging the payment of bills, while others are going back to the drawing board to ensure that customers pay outstanding bills.
Harare mayor Councillor Bernard Manyenyeni, yesterday confirmed that the city would have a special financial performance improvement review early next month.
“We will carry out an in-depth assessment of the possible options to keep council afloat. How do we enhance our revenues, how do we contain our costs? We are looking for a fresh look at council numbers as the only way we can return to effective functionality,” he said.
In February this year, Bulawayo City Council offered 50 percent discount for corporates settling accounts by end of June and they have since extended the deadline.
“We have since extended the deadline to September this year,” said Bulawayo mayor Clr Martin Moyo.
Bulawayo is the country’s industrial hub, but firms have been struggling due to multiple factors.
Gweru town clerk Mr Daniel Matawu, in a statement said the city would write off 50 percent of rates and service charges on all bills for industry, commerce and institutions outstanding as at December 31 last year if they paid 50 percent of the outstanding amounts during the promotional period (July to December 2014).
“City of Gweru has resolved to grant debt relief to all customers in the above categories for the period July 2014 to December 2014 due to liquidity challenges facing our clients and economy at large.
“Affected ratepayers and debtors who fail to embrace the relief measure would have full areas owing to council restored after the lapse of this grace period,” said the city’s town clerk Mr Matawu.
He said upon the lapse of the promotional period, the city would engage into serious legal and permissive method of engaging the messenger of court for the attachment and subsequent auctioning of defiant debtors’ assets without further notice.
In a public notice, Kadoma said it was offering 40 percent discount to business, industry and institutions provided they paid 60 percent of the total amount owed by October 31 and if they kept their accounts up to date for the 10 months starting January to October 2014.
Bindura mayor Clr Innocent Zvigumbu, said business, industry and institutions were offered a 45 percent discount as a revenue boosting measure.
“We offered them a 45 percent discount and we have since agreed on some payment plans to those who took up the offer. We are going to use the legal route on those who continue to default,” he said.
Gweru is owed $24 million by residents, Government departments and the business community.
Residents owe $8,19 million, industry $7,8 million, Government $6,7 million and the commercial sector, $1,05 million.
As of May, Government departments owed Harare $15,5 million, industry and commerce $130 million, while the satellite towns of Chitungwiza, Norton, Ruwa and Epworth owed a combined $3,4 million.
Since Government cancelled debts in July last year, some residents have not been paying their bills and as a result the combined debt for water only escalated to $91,6 million in Harare.
The city bills go up to $24 million every month, but council is only able to collect $11 million.
Ratepayers and Government owe Masvingo City Council more than $23 million while Masvingo is owed $28 million.