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Interbank rate throws HCC off rails

by Staff reporter
17 Jul 2019 at 07:51hrs | Views
HARARE town clerk Hosiah Chisango yesterday said the interbank rate has drastically affected council operations because this year's budget was based on a 1:1 ratio to the United States dollar.

Chisango told members of the Parliamentary Portfolio Committee on Local Government that this has resulted in a US$36 million budget for water chemicals being depleted fast in order to provide clean water.

He also told the committee that the 2013 debt write off which was ordered by government prejudiced the city of US$230 million and council struggling with indebtedness to statutory bodies such as the Zimbabwe Revenue Authority (Zimra).

He said the Harare City Council (HCC) was currently servicing around four million people, with the demand for water at 1 200 mega litres. But the design capacity of the water plant can only provide 704 million litres of water with the City of Harare only able to supply 300 million litres of water per day.

"We cover just 50% of the demand for water and shortages are due to population increase, dilapidated water infrastructure over the years, resulting in water rationing for high-density areas being 48 hours during the weekend and some suburbs like Mabvuku get water once per week," Chisango said.

"Our budget was based on a 1:1 exchange rate and our rates are still charged at the 1:1 exchange rate, yet all our expenses are now on the interbank exchange rate and there is a big gap which now needs a supplementary budget," he said.

Chisango said the monthly requirements for water treatment chemicals was US$2,8 million to produce 550 to 600 million litres per day.

He noted that water rationing might continue up to 2020 due to siltation unless the country is blessed with enough rains.

Chisango was grilled on how the US$144 million loan from China Eximbank for rehabilitation of water infrastructure was used, with MPs charging that it was used to purchase luxury vehicles.

He said the council received only US$72 million which was used to complete phase one of Morton Jaffray, computerisation of city district offices. He added that the other US$72 million was yet to come and the Finance ministry was following it up.

But, MPs demanded to see proof of how it was used, saying some luxury vehicles were also purchased resulting in China withholding the other US$72 million.
Chisango claimed the vehicles purchased were part of the project.

He said workers were owed US$27,4 million dating back to 2015 and the outstanding salaries were being paid in stages every month.

Chisango said the salary expenditure was $194 million out of $829 million with 23% going towards salaries and 77% towards service delivery.

The City of Harare owes Zimra $171 million of which the principal debt is $32 million.

Another $83,5 million is owed to the pension fund with $60 000 is forked out to pensioners every month.

Some $17 million is owed to the Harare Municipal Medical Aid Society and $2 million to the National Social Security Authority.

Source - newsday

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