Business Editor
THE Bulawayo City Council has engaged eight law firms in a legal battle to recover up to $12 million in unpaid bills by different companies and organisations.
In its latest council report, the local authority says it had to take the legal route as the amounts in question exceeded $10 000, which the Magistrate Court could not handle.
The Chamber Secretary’s office reported that the companies, whose names were not disclosed, owed the local authority a total of $12 198 698 and had only paid a combined $2 697 572 by June this year, which accounts for 22 percent of the debt with a balance of $9.5 million.
The council, however, acknowledged the difficult economic environment that has seen scores of companies folding in the last few years while those remaining were struggling to meet their obligations.
“Accounts handed over to law firms were of big amounts, which the Magistrate’s Court could not handle. They were composed mostly of companies and organisations which were finding it difficult to operate under these unfavourable economic challenges,” reads part of the report.
“Quite a number of companies had either stopped operations, were under judicial management or undergoing liquidation, hence the low rate of recovery.”
All the stated entities owe the local authority about $1 million each with the highest owing $2.3million.
The engaged law firms include: Majoko & Majoko, James Moyo-Majwabu Partners, R Ndlovu and Company, Dube, Banda, Nzarayapenga and Partners, Advocate S K Sibanda and Partners, Mlweli Ndlovu and partners, Lazarus and Sarif and T Hara and Partners.
Each law firm handles one account.
With the demise of industry and subsequent job losses, the council has suffered low revenues inflows, which have crippled its service delivery capacity across the board.
In the last few years, the city council has rewarded loyal rate payers through rates discounts and recently it credited a combined $800 000 incentive to residents and companies who do not owe anything.
Last year the local authority extended a 50 percent discount incentive to industry and commerce to mid-year to ease operational constraints on firms and encourage quick payment.
Meanwhile, the city is also swimming in a combined debt of $130 million owed to different creditors as at end of August 2016. The bulk of debts are owed in salaries and allowances ($7 million), statutory contributions, trade creditors, utilities and medical expenses.
In the same period service debtors to council owed a combined $136.5 million. The city collects on average $5 million per month in cash receipts.