RUTENDO CHIRUME
MASVINGO-Masvingo City Council (MCC) has been dragged to Commercial Court by Zimbabwe Electricity Transmission and Distribution Company (ZETDC) over non payment of ZW$205 million in electricity bill as of February 27 2023.
This came out during the council meeting held recently at the Civic Centre.
It was reported that the Court had given the two parties an opportunity to sit down and agree on the way forward.
The first meeting was held on April 04 in Harare where Council negotiated that it can afford to pay ZW$15 million per week and will increase the amount when it receives some money from the government.
On the other hand, ZETDC was insisting that MCC settles its ZW$205 million debt immediately or convert the outstanding balance to US$ equivalent at the auction rate prevailing rate at the time of payment.
During the full Council meeting MCC Town Clerk, Eng Edward Mukaratirwa said appeals has been sent to various government departments to pay off their obligations so that Council can settle their debts.
“It was noted that appeals have been sent to various government departments to pay off their obligations such that Council could settle its debts. The Finance Director provided an analysis of the various options available to Council to settle the matter as follows option 1 Settle the Debt at all costs. In order for Council to meet this condition demanded by ZETDC Council will be forced to forego all expenditure and focus solely to the payment of the debt that will risk service delivery and this option would be viable if government debts are settled.
“Option 2, Convert the debt to US$ and negotiate for a longer payment method. This option was to work if Government Departments had been settling their bills as they become due. The disadvantage of this option is that the debt will continue to rise whilst Council revenue remained static as Council could not equally convert its debtors to USD$ and thus Council is likely to default this payment plan.
“Option 3, Negotiation with ZETDC for a longer payment period. Given two scenarios above, the Committee noted that the only feasible solution was for Council to negotiate with ZETDC for a longer payment period whilst pushing government to settle its debts,” said Eng Mukaratirwa.
In light of the above the Council resolved to recommend that Council authorizes its legal representatives and officials to negotiate flexible payment terms with ZETDC whilst making representations to Treasury to settle government departments’ debts to council and deliberate action plans to be put in place to reduce expenditure and focus on critical service delivery mandates and maintenance of key infrastructure.
