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Chombo directive continues to haunt BCC
28 Jan 2014 at 08:39hrs | Views
Bulawayo City Council lost more than $90 000 in legal fees following the directive by government for all local authorities to write off debt owed by residents.
The local authority cancelled $46 million it is owed by residents following a directive by the then Local Government Rural and Urban Development minister Ignatius Chombo.
According to a BCC report chamber secretary Sikhangele Zhou reported on November 4 last year that the ministerial directive rendered domestic debtors paid us and all legal actions which had been in the process had to be abandoned.
The legal costs that were incurred by the local authority after the write off were $20622.17 in Return of Service and Holdovers, $ 625.00 in summons issued and later retrieved and $810.00 in judgements and writs.
BCC also lost $70742.95 in messenger of court Fees bringing the total amount to $92800.12
"Accounts with a value of more than $10 000 were handed over to lawyers for collection through the High Court. These were mainly industrial and commercial debtors," the report said.
It was noted that an additional three had signed new contracts to do collections on behalf of City of Bulawayo and these were namely Mlweli Ndlovu & Partners who signed an agreement on January 17 cases handed over on July 19.
The other two firms according to the report were R Ndlovu & Company who signed an agreement in November 2012 and Job Sibanda & Associates who signed an agreement on January 17 and cases handed over on July 17.
"One other law firm had had its case load withdrawn in view of the low record of recovery. The agreement provided for appraisals to be done at regular intervals.
Generally, collections had been conducted fairly among the firms and an average collection rate of 51% under difficult conditions of Commercial and Industrial debtors struggling to survive," read the report.
"Under normal circumstances the above costs were debited to the debtors' accounts and recovered council would now bear the costs and there would be no recovery."
In the run-up to the July 31 elections, Chombo directed local authorities to scrap all outstanding rates as at June 30 2013 in what observers viewed as an attempt at urban vote-buying by Zanu PF.
Chombo said the move to scrap the rates was in line with Zanu PF's pro-poor policy championed by President Robert Mugabe.
The local authority cancelled $46 million it is owed by residents following a directive by the then Local Government Rural and Urban Development minister Ignatius Chombo.
According to a BCC report chamber secretary Sikhangele Zhou reported on November 4 last year that the ministerial directive rendered domestic debtors paid us and all legal actions which had been in the process had to be abandoned.
The legal costs that were incurred by the local authority after the write off were $20622.17 in Return of Service and Holdovers, $ 625.00 in summons issued and later retrieved and $810.00 in judgements and writs.
BCC also lost $70742.95 in messenger of court Fees bringing the total amount to $92800.12
"Accounts with a value of more than $10 000 were handed over to lawyers for collection through the High Court. These were mainly industrial and commercial debtors," the report said.
The other two firms according to the report were R Ndlovu & Company who signed an agreement in November 2012 and Job Sibanda & Associates who signed an agreement on January 17 and cases handed over on July 17.
"One other law firm had had its case load withdrawn in view of the low record of recovery. The agreement provided for appraisals to be done at regular intervals.
Generally, collections had been conducted fairly among the firms and an average collection rate of 51% under difficult conditions of Commercial and Industrial debtors struggling to survive," read the report.
"Under normal circumstances the above costs were debited to the debtors' accounts and recovered council would now bear the costs and there would be no recovery."
In the run-up to the July 31 elections, Chombo directed local authorities to scrap all outstanding rates as at June 30 2013 in what observers viewed as an attempt at urban vote-buying by Zanu PF.
Chombo said the move to scrap the rates was in line with Zanu PF's pro-poor policy championed by President Robert Mugabe.
Source - Byo24News
