THE Bulawayo City Council (BCC) is failing to collect more than $62 million it is owed by power utility, Zesa, after the latter split into several strategic business units making it difficult for creditors to follow up on their outstanding payments.
BY NQOBANI NDLOVU
The municipality, according to latest council minutes, says it is finding it difficult to recover $62 million from Zesa as of June this year in royalties for the use of the Bulawayo Thermal Power Station.
“Discussion ensued and councillor, Nephat Sibanda was concerned that the monthly collections were low, hence, the challenge on reducing debtors,” recent council minutes of the finance and development committee read.
“He acknowledged that council and Zesa owed each other large sums of money. However, he felt that Zesa should be engaged, so that a solution was found.”
The council accuses Zesa of not only failing to pay compensation after taking over the running of the power station, but also not honouring yearly royalties.
However, Zesa has also made a counter claim and sued the local authority over an $80 million outstanding energy bill, a figure council disputes.
Council instead says it owes Zesa $68 million as of August this year.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
“The mayor (Martin Moyo) also felt that Zesa should be approached on the debt issue, as it also owed council a lot of money and levies,” the minutes continue.
“He observed that council’s counterclaim was more than Zesa’s and it would be ideal to off-set such debts.
“In response, the financial director (Kimpton Ndimande) explained that in respect of statutory debtors, government had agreed that Zinwa (Zimbabwe National Water Authority) and council off-set what they owed to each other. The challenge was with Zesa, which owed council royalties.
“Council had failed to recover the money, as Zesa claimed that nothing was owed to council. Zesa had also split into smaller organisations/companies and this created challenges for council.”
Then acting town clerk, Sikhangele Zhou, in September, said Zesa was refusing to enter into an offset deal on the grounds that the BCC owed it more money.
Zesa took over council’s infrastructure for power generation such as power lines, station and buildings.
