News / National
Ingwebu requests water payment holiday
09 Jun 2024 at 04:07hrs | Views
Ingwebu Breweries, owned by the Bulawayo Municipal Commercial Unit, requested a one-time water payment holiday from the Bulawayo City Council (BCC) due to the 2023/24 El Niño-induced drought. This drought caused significant crop failures, increasing costs for the brewery, which relies on maize and sorghum. The unexpected price hikes and competitive market conditions have threatened their viability, and the brewery needs relief to manage costs associated with a planned PET plant launch.
The managing director, Mr. Dumisani Mhlanga, explained that usual sources of sorghum were not viable this year due to poor harvests. Negotiations with the Grain Marketing Board (GMB) for sorghum grain fell through when the government suspended grain sales to private businesses. Additionally, local market prices for sorghum malt have risen sharply.
Ingwebu's financial pressures are further compounded by the costs of launching the PET plant, which requires significant investment in plant adaptations and storage facilities. Mr. Mhlanga requested the suspension of water charges to alleviate these financial burdens.
However, BCC denied the request, citing the precedent it would set and the financial impact on the council, which is already owed US$423,227 by Ingwebu Breweries. The council emphasized that offering free water could send the wrong message to residents and stakeholders, particularly during a tight water rationing regime. The estimated water volume involved in the request was valued at US$331,677. BCC maintained that Ingwebu should pay a dividend to the council rather than being subsidized.
The managing director, Mr. Dumisani Mhlanga, explained that usual sources of sorghum were not viable this year due to poor harvests. Negotiations with the Grain Marketing Board (GMB) for sorghum grain fell through when the government suspended grain sales to private businesses. Additionally, local market prices for sorghum malt have risen sharply.
Ingwebu's financial pressures are further compounded by the costs of launching the PET plant, which requires significant investment in plant adaptations and storage facilities. Mr. Mhlanga requested the suspension of water charges to alleviate these financial burdens.
However, BCC denied the request, citing the precedent it would set and the financial impact on the council, which is already owed US$423,227 by Ingwebu Breweries. The council emphasized that offering free water could send the wrong message to residents and stakeholders, particularly during a tight water rationing regime. The estimated water volume involved in the request was valued at US$331,677. BCC maintained that Ingwebu should pay a dividend to the council rather than being subsidized.
Source - sundaynews
