THE Bulawayo City Council has been inundated with requests for debt cancellation by several firms battling to pay bills, it has been established.
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Latest council documents perused by Southern Eye Business indicate that three companies in Bulawayo have written to the city council seeking debt reprieve as firms continue reeling from a severe financial squeeze attributed to the prevailing harsh economic climate.
According to the latest council minutes, the financial director Kempton Ndimande reported that on June 25 2014 three companies, Rusglen Garments (Pvt) Ltd, Bulawayo Island Hospice and Ramji and Sons (Pvt) Ltd wrote to the council asking for debt cancellation.
Rusglen Garments owed Council $3 160,15 in rates and other services and the company was paying around $150 per month. Ndimande reported that the company was not in a position to raise $2 712,75 as it was currently non-operational.
The company was also requesting that the premises be revalued for rating purposes.
The Chamber Secretary (Valuation) had not supported the request to write off the rates, saying instead the company should take advantage of the council’s incentive of 50% discount.
The valuation of the property had been conducted according to the valuation principles applicable in that locality, the council noted.
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Bulawayo Island Hospice owed council $8 169,99 for rates and water charges and it was accruing $249,40 in rates every month.
Ndimande recommended that council give a sympathetic ear to the organisation considering the noble work that it was doing and granted it rates exemption in terms of the Urban Councils Act: Chapter 29:15 Section 270 (d) (1) which stated that a property used for the care of aged persons or mentally or physically handicapped persons or for any other charitable purpose, a public hospital or a public orphanage, would be exempted from paying rates.
Ndimande reported that Ramji and Sons (Pvt) Ltd had also requested for the removal of $1 837,32 as interest rate accrued as from 2009.
He said if the request was granted the company would receive a discount of $6 830,54 and it would be required to pay $7 122,83 to settle the account in full.
“Granting the request to remove the interest of $1 837,22 might set a wrong precedent on the council’s insurance portfolio,” Ndimande said.
He recommended that the request by Ramji&Sons to have interest raised on the company account be not accepted.
This comes after more than 100 companies in Bulawayo have closed shop or relocated to Harare due to severe shortage of working capital, erratic power supplies and high utility costs largely because of antiquated machinery and the high cost of labour.
