KWEKWE City Council, which is saddled with a $12 million debt, faces a total service delivery shutdown as heavy industries based in the city continue to default on rate payments, an official said on Monday.
Municipalities across the country have experienced serious cashflow problems following a government decree last year to cancel debts owed by households, a move critics said was a costly election gimmick by Zanu PF.
In line with the government edict, Kwekwe cancelled over $14 million in household municipal debt.
The council is owed $18,4 million mainly by Ziscosteel, now NewZim Steel, ($12 million) by ferrochrome producer ZIMASCO ($161 327), Lancashire Steel ($217 619) and Tor Steel ($151 512), among others.
In turn, the council’s debts stood at $12 601,112 as at December 31 last year, according to documents released by the council finance committee.
The municipality also has a power bill of $7 million, accumulated from 2009.
Other creditors are workers who are owed $3 418,536 in salary arrears and Zimbabwe Revenue Authority, which is owed $254 833 in unremitted income tax.
Kwekwe also owes the Zimbabwe National Water Authority $854 297. The authority early this month shut Kwekwe’s taps for two days, forcing several major companies to close shop.
Mayor Matenda Madzoke said the council could soon fail to offer basic services delivery, especially if there was no resolution to the NewZim Steel debt.
“We are home to heavy industry who rely heavily on the supply of water from the local authority to keep it going and yet we face the prospect that we might fail to provide that water owing to these crippling debts. This will have a serious effect on business in the city,” he said.
— The Source