The Bulawayo City Council is struggling to collect more than $56 million it is owed by residents, government departments, commercial and industrial ratepayers.
According to latest council minutes, as at October 31, the local authority was owed $20,9 million by commercial ratepayers, $4,6 million by businesses and another $4,5 million by government departments.
Residents owe the local authority a whopping $26,2 million in unpaid rates.
Council’s finance director Kempton Ndimande said most government departments resorted to using their muscle to thwart debt collection efforts.
Ndimande said government departments were failing to settle their debts because of “inadequate allocations for payment of utility bills by the Ministry of Finance and Zinwa failing to effectively collect (debts) from its customers”.
Ndimande said as a result, the local authority had failed to service its own debts.
“Council has had to balance the cash shortfall with short-term borrowings for working capital.
“Unfortunately, the gap between council’s ability to pay its obligations and the cash inflows is widening.
“Payments of creditors have fallen behind,” he said.
“As a result, some creditors have resorted to cutting supplies, e.g., Zesa, cancelling credit facilities, garnishing council bank accounts, taking legal action to recover amounts owed, demanding upfront payments or hedging their losses by charging council a premium for goods and services.
“Most bulk meters servicing industry and commerce need to be replaced urgently.”
About 1 463 out of 4 212 non-domestic meter readings were estimates.
“Bulk meters have been procured and 100 top users of water have been identified for replacement of their meters,” he said.
“Contracts have been awarded to install the meters.
“As soon as the meter fails, connecting meters to the water pipes are delivered, and the replacement programme will start.”
According to the report, Ndimande noted that the de-industrialisation of the country’s second largest city was also affecting debt recovery efforts by the local authority.
“Based on bills returned to the office by bill packers, a number of industrial premises have closed shop.
“Accounts are handed over for collection by the legal section.”