GWERU City Council-owned beer concern, Go-Beer Breweries, did not remit anything to the municipality for the whole of last year, the council’s budget statement presented last week has revealed. Stephen Chadenga OWN CORRESPONDENT
In July this year, council shut down Go-Beer after it emerged that the liquor undertaking had been financially straining the local authority.
The budget statement showed that the local authority did not expect to get any disbursements from the beer entity the whole of next year.
“Dividends from Go-Beer in 2014 were zero with the same figure expected in 2015,” the statement showed.
“Donations to the city council for the same periods also recorded zero disbursements.”
When councillors made the resolution at a full council meeting to close Go-Beer in July, most of the permanent employees were sent on unpaid leave while the council made investigations into the operations of the brewery.
“With immediate effect, Go-Beer should cease operations and all full-time workers go on unpaid leave as we (council) make investigations and audits in the sister company,” Ward 4 councillor, Kenneth Sithole, said then.
“We cannot continue to support a non-performing entity which is draining council resources.”
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Council security and auditors took over and locked Go-Beer Breweries beerhalls in and around the city and the brewery pending investigations.
In recent years, the municipality took over the company’s debts and absorbed staff deploying them in various departments after they went for years without being paid.
Last year the Local Authorities Pension Fund took Go-Beer Breweries to court over an estimated $200 000 pension fund debt.
The organisation claimed Go-Beer had not been remitting workers’ pension contributions since 2010.
Meanwhile, Gweru City council increased tariffs by 35% for 2015 to boost its coffers in proposals to raise $49 million for the year.
As of August this year, the council had collected $24 million against a target of $33 million as defaults spiked, a development finance committee chairperson, councillor Albert Chirau, blamed for the local authority’s poor performance when he presented the budget estimates on Thursday.
Salaries are expected to gobble 40% of the total budget, up from 38% this year.
Tariffs on housing, taxi fees, vendor licences and abattoir fees were all increased, while shop licence registration fees spiked to $100 from $28.
Fines for illegal vending were increased from $23 to $40.
The council director of finance, Edgar Mwedzi, said the new tariffs would enable council to meet most of its obligations.
Chirau said Gweru’s falling industrial base due to company closures coupled with the poor performance of those operating caused many ratepayers to default.
“Council was not spared by the biting liquidity crunch which left us in a precarious position. Industries and many companies continued to struggle and this resulted in ratepayers not forthcoming,” said Chirau said.
— The Source
