HARARE City Council (HCC) has threatened legal action against ratepayers who fail to settle their bills amid indications that revenue to the city coffers has taken a plunge following the cancellation of debts owed by residents.
REPORT BY WONAI MASVINGISE
In the run-up to the July 31 polls, Local Government minister Ignatius Chombo ordered local authorities to write off residents’ outstanding utility debts accrued between February 2009 and June 2013, a move described by critics as populist.
As a result of the poor financial position, the council is yet to pay its employees August salaries.
In a bid to encourage companies that did not benefit from Chombo’s write-off, HCC is offering a 30% discount to those that settle their bills by year end.
“All ratepayers, corporates and individuals alike are hereby urged to timeously settle their municipal bills. For individuals, the July and August 2013 bills should be settled in full by the due date without fail,” HCC said in a statement yesterday.
“Corporates are urged to take advantage of the 30% discount offer which ends on 31st December 2013. Those corporates in arrears should settle their current bills in full and pay a portion of the arrears in line with the agreed payment plans.
“Failure to settle bills in full by the due date will leave the council with no option, but to take further action. Pay your bills by due dates to avoid any inconveniences and attendant legal action.”
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Sources told NewsDay that the city council had a bank overdraft running into a couple of millions due to cash-flow constraints. Town clerk Tendai Mahachi, however, told NewsDay yesterday that contrary to negative reports, the city’s revenue was actually improving after the slashing of bills.
“Council’s revenue per month was between $12 million and $15 million whether somebody owed us money or not,” said Mahachi.
“What we have said now is that since everyone has been given a reprieve, we now expect to get $20 million from collections. So the City of Harare will be fine; we are actually getting more now after the slashing of bills.”
He said the late payment of salaries had nothing to do with the alleged revenue decline.
Quizzed on the effect of the overdraft on paying employees, Mahachi was evasive, preferring to say: “Most of our workers will be paid tomorrow (today). That has nothing to do with the slashing of bills.”
Last week, NMBZ Holdings chief executive officer James Mushore warned that the cancellation of debts owed to local authorities and plans to write off more utility bills could worsen the liquidity crisis because the post-election government faced a herculean task of sourcing long-term capital to stimulate economic growth.
Before the scrapping of bills, HCC was understood to be owed in excess of $400 million by the government, residents and the commercial sector in unpaid rates.
