Harare in ZWL$61bn debt pain

MOSES MATENGA

Harare City Council is sweating over how to recover over ZWL$61bn (US$76m) owed by the government, residents and business with authorities fretting on the possibility of severe outbreak of waterborne diseases as it struggles to procure vital water treatment chemicals.

Zimbabwe’s capital city owes Chemplex Corporation at least US$1.2m for the supply of chemicals while the cash strapped local authority is also supposed to use the elusive foreign currency to purchase the chemicals to address the water crisis also exacerbated by the crippling power cuts.

“We are owed over ZWL$16bn by the government, ZWL$45bn by business and residents and the debt is increasing,” Harare Mayor Jacob Mafume told Business Times this week.

Mafume said the local authority has tried but failed in all its strategies to recover the owed billions and the government has also frustrated them in their quest to recover the money.

“We have tried to use summons but it is difficult because there is resistance from residents. We have tried cutting off water but again, water is a right and there is an uproar.”

“We are owed about ZWL$2bn by Ruwa and Chitungwiza, Norton, Epworth because we provide them with water. One week we (had to) shut off Norton and there was an uproar from the Ministry of Health and anybody else saying that it will create diseases,” he said adding the local authority was the only service provider in the country that is still doing post-paid service.

“All the other service providers including the government are now asking you to pay in advance, you pay in advance to go on a road, to get a passport, to go to a clinic and electricity. The city councils are the only ones that give you a service and then try to chase up the money later. It is an unsustainable model,” Mafume said.

“You can’t survive in this hyperinflationary environment and the economy is being mismanaged and therefore asking someone to pay later is a recipe for non-payment.”

On how much the local authority is owing other service providers, Mafume said the council was owing Chemplex, suppliers of water chemicals, close to US$1.2m.

He said there was a need for government grants, bonds and loans for Harare to deal with pressing service delivery issues.

Mafume said his council will not succumb to government pressure to pay US$780 000 a month to Geogenix BV, a Netherlands based firm that entered into a partnership with the local authority for the Pomona Waste-to-Energy deal.

He said the opposition MDC-T councillors who took over control of Town House after the recalling of councillors aligned to Citizens Coalition for Change leader Nelson Chamisa allowed “dubious” deals to pass at a cost for the local authority and the residents.

Some of the deals that passed but are now subjected to challenges include the Pomona deal, the golf courses takeover and the Rufaro Stadium and Sakunda Holdings deal.

“If you look at the Pomona deal, the City of Harare is supposed to pay US$780 000 a month increasing to a million per month for 30 years and it means Harare will pay US$320m to a company ostensibly on paper to produce 22 Megawatts (of power),” he said.

“Let us put that into perspective, the extension to Kariba which added 300 Megawatts cost the country around US$380m and Harare is paying almost a similar amount of money to get 22 Megawatts. If you look at the extension in Hwange, it’s almost the same. That is the potential loss to the country and fiscus as these are supposed to come directly from ratepayers,” Mafume said.

“As council, we have not paid. We have not authorised the use of devolution funds and if we budget for expenditure we put it in our budget any use of dev funds will be illegal and criminal. I don’t know if they have been paid. All the funds I am in charge of will not be paid for anything outside what we have budgeted for.”

“Others of course are the turning of golf courses into residential stands, the Rufaro Stadium issue, taking wetlands and the list goes on. This happens when people who are not accountable to the electorate are allowed to make decisions. They know they will not be accountable,” he said.

On the water crisis, Mafume said not even the construction of Kunzvi Dam, long perceived as the panacea to the crisis, will rescue Harare without a clear plan on a water treatment plant.

“The water crisis in two parts. No dams have been built since 1976. The solution is to build a canal from Muchekeranwa Dam. Government is building Kunzvi Dam but there is no agreement with the city, it is not clear as to who will build the water treatment plant for the dam and it is not being built simultaneously with the dam. It will soon be finished and people will ask where the water treatment plant is.”

He said Chemplex was failing to buy raw materials and pressure was on Harare to buy from other countries including China, Zambia and Mozambique and there were logistical problems.