BCC, Zesa debt impasse continues
THE Bulawayo City Council is charging the Zimbabwe Electricity Transmission and Distribution Company more than $800 000 monthly in royalties for the Bulawayo Power Station as the two entities continue to disagree on compensation to be paid by the power utility after it took over the station.
According to the latest council report, the power utility now owes council $100,4 million while the local authority on the other hand owes ZETDC $100,5 million for electricity debt. The power utility reportedly reneged on paying royalties in 2008 hence the debt ballooned to the current $100,4 million.
“Council is billing Zesa $860 284 as royalty charges per month, as at 31 August 2018 the royalty bill stood at $100 402 398. With regards to Zesa, the financial director, Mr Kimpton Ndimande reported that the case was now with the courts as the two entities owed each other certain amounts of money and there was need to resolve this issue soon,” reads the council report.
Contacted for comment, council spokesperson, Mrs Nesisa Mpofu also reiterated, Mr Ndimande’s sentiments saying the local authority will only be able to comment on the matter once they had exhausted all court processes.
“The issue of Zesa royalties is before the courts and as such we cannot comment on it. The City of Bulawayo can only comment once the matter has been finalised in the courts,” she said.
In 2016, ZETDC, a subsidiary of Zesa Holdings, approached the High Court seeking an order compelling BCC to settle its power debt, which was then pegged at $80 million. BCC had made a counter claim before the courts and the matter is still pending.
Sources close to the matter however, revealed that despite a recent deal struck between ZETDC and BCC over the supply of water from Khami Dam to the Bulawayo Power Station for power generation there is still bad blood between the two entities over the actual ownership of the power station.
“Council is arguing that according to official records the buildings in the power station still belong to them as there is no documentation on the actual transfer of the structures from BCC to Zesa hence this actually means the power station is still registered under the council’s name.
“Further it is not like Zesa does not know that they have to pay the royalties, they are fully aware but I guess it is the figure which they are disputing, the impasse is exacerbated by the fact that the power utility has not said how they will compensate council for the actual structures of the power station,” said the source.
According to a council confidential report the local authority, a few years back, noted that while the two parties had discussed the issue of royalties — which the power utility had reneged on — the issue of compensation for the properties had remained “parked”.
“The intention of the legislature (to transfer the power stations) was for parties to negotiate mutually acceptable conditions of all or any of the assets and liabilities of the local undertaking. The minutes that were in our possession did not show that there was ever any discussion on the power station hence it was still registered in the city of Bulawayo’s name. This was our chance to fight for what rightfully belongs to us. We cannot just hand it over for nothing,” reads part of the council report.
Contacted for comment Zesa spokesperson, Mr Fullard Gwasira, while not commenting on the issue of the royalties acknowledged that most local authorities owed them huge sums of money and in some cases they had engaged debt collectors to recover what was owed to them.