Zesa, BCC debt impasse continues
THE Bulawayo City Council and Zesa continue to be at each other’s throats over debts they owe each other, with the local authority vowing to continue using generators at its major facilities, arguing that it is cheaper.
The council has gone for over six years using generators at their Tower Block offices, Revenue Hall and City Hall head offices, with the local authority arguing that it could not foot the bill it owed the power utility amid revelations that Zesa is reneging at an early agreement for them to pay royalties to the local authority for the use of the Bulawayo Power Station and offices attached to the power station.
Addressing journalists during a recent media briefing in the council chambers, the local authority’s finance director, Mr Kimpton Ndimande revealed that they owed Zesa $62 million, with the power utility demanding $4 million upfront for them to consider switching on the local authority and start negotiating a payment plan.
“As at July 2016 we owed the power utility $62 million, of this figure Zesa is demanding $4 million upfront for them to reconnect our main offices but knowing that we get most of our money through revenue collection and that money still had to be divided to other services, we can’t afford parting with such a huge figure.
“With this noted we did our calculations and discovered that a generator would cost $76 000 of which we would be using just $7 083 for diesel per month, which to us was a cheaper option and these generators have managed to keep us going in these trying times. We have tried engaging them since February 2009 with no luck at all as we have never had any positive outcome in all our deliberations,” said Mr Ndimande.
He said in terms of royalties and servitudes, Zesa owed them a total of $76 million. Speaking during the same meeting, the local authority’s Acting Town Clerk, Mrs Sikhangele Zhou, said they had tried approaching Zesa with the hope of engaging them on a set-off deal but the power utility was not forthcoming.
“We have tried having a round table discussion with Zesa, I know that at one point the holdup was on how the servitudes and royalties would be calculated but eventually it was agreed on what formular we would use but again they reneged on what was agreed. However, a fact is that as BCC we have the title deeds for the power station and the offices around the power station. I believe what is needed now is high level negotiations because it can’t be said we owe them when we also know that they owe us,” said Mrs Zhou.
The local authority has to pay an average of $1,2 million per month for the pumping of its water supplies. The Bulawayo Thermal Power Station, built by council, became part of Zesa in 1987 after the amalgamation of all the Local Authority Electricity Undertakings. According to a council report, at one point Zesa used to pay the local authority but stopped payments under yet unclear circumstances.
“The financial director (Mr Kimpton Ndimande) explained that Zesa did not compensate council for the takeover of Bulawayo Power Station, however, records showed that at one point council was receiving royalties but Zesa unilaterally discontinued this, the matter was now being investigated,” reads part of the minutes.
Contacted for comment Zesa public relations manager Mr Fullard Gwasira said he needed more time to look into the issue so as to get the finer details.
“I need to do more research on that matter, can you kindly call me next week,” said Mr Gwasira.
However, a Zesa official who spoke on condition of anonymity said the figure which was being suggested by the local authority was too high and they were not stating the formula they had used to get to the figure.
“It is simple, BCC just sat and decided a figure from nowhere and presented it to Zesa, I believe if any royalties are to be paid the figure should be arrived at by both parties not just one,” said the official.
The council has on a number of occasions insisted that the power station had to be returned to the local authority so as to improve the situation and at one point even the Urban Councils Association of Zimbabwe (UCAZ) attempted to petition the Government to intervene in the impasse.