Online Reporter
Tongai Mashonga, [email protected]
REDCLIFF Municipality is battling a liquidity crisis that has left it owing Kwekwe City Council US$5,5 million in unpaid water bills, with poor revenue collection from residents threatening service delivery.
The municipality is now on a weekly payment plan with Kwekwe City Council as the revenue gap continues to widen.
Director of Finance Mrs Lindiwe Whata said the local authority is trapped in a cycle of revenue shortfalls. While
Kwekwe bills Redcliff between US$170 000 and US$200 000 every month for bulk water supplies, the municipality collects only a fraction of that amount from residents.
“We owe Kwekwe City Council US$5,5 million and every month we’re billed US$170 000 to around US$200 000,” she said.
“But in terms of revenue collections on water, we only receive 25 percent from the residents. That’s a bit challenging and it affects water supply from Kwekwe City.”
Mrs Whata said the municipality’s revenue inflows remain well below its financial obligations.
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“In terms of payments, we actually pay from what we receive from residents. We receive between US$35 000 and US$45 000 so that we remit to Kwekwe City,” she said.
To manage the growing arrears, the council has negotiated a weekly payment plan.
“Currently we’re on a weekly payment plan which I’m addressing and I hope to improve on it if the inflows increase,” said Mrs Whata.
She said there had been some improvement in revenue collection at ward level.
“There was improvement from ward collection; our collection efficiency improved from 20 percent to 30 percent in terms of ward collections,” she noted.
“We still have our debt collectors assisting in passing and distributing the demands. There are about 15 to 20 personnel staff on the ground and we continuously renew their contracts on a three-month basis so that we meet the minimum service delivery standards.”
The municipality is also pursuing corporate debtors.
“We have challenges with some of the corporates and we have since handed them over to the lawyers. Just a few have responded to the demands we are sending,” said Mrs Whata.
“We owe our creditors US$6 million and on debtors we are now on US$24 million, with Ziscosteel owing us US$18 million and there is no movement on Ziscosteel paying the debt. We are continuing with engaging them.”
She said the steel giant’s failure to settle its debt was weighing heavily on the municipality’s financial performance.
“That is where we are having some challenges as they contribute most of our revenue. This is actually affecting our performance as a local authority. Our revenue collection is at 35 percent,” said Mrs Whata.
With bulk water supplies dependent on timely payments to Kwekwe City Council and residents paying only a quarter of their water bills, Redcliff Municipality continues to face severe financial pressure.
The council says intensified ward-based debt collection, legal action against corporate defaulters and continued engagement with Ziscosteel remain central to closing the revenue gap and stabilising water service delivery.
