GOVT STRIPS COUNCILS OF BORROWING POWERS | Govt has suspended granting councils borrowing powers to save them from the humiliation of having their properties attached when they fail to repay, Secretary for Local Government, Public Works and National Housing, Engineer George Mlilo has said.
The ban is with immediate effect. In an interview on the sidelines of a meeting with Midlands private land developers recently, Eng Mlilo said almost all local authorities were in the red and were struggling to service their debts hence the decision to suspend borrowing powers.
“The ministry (Local Government, Public Works and National Housing) has with immediate effect suspended the granting of borrowing powers to local authorities because most them are in financial dire straits.
“We have had incidents where councils end up being taken to court and losing the case after they failed to re-pay. This has seen council property including office desks and chairs being attached so we have said let us suspend the granting of borrowing powers to avoid such situations,” he said.
Eng Mlilo said instead of applying for borrowing powers, councils should find other ways of improving revenue collection so as to fund their projects as well as improving service delivery.
“This does not mean local authorities must short-change ratepayers. They should work on ways to improve revenue collection so that they do not compromise service delivery. What we want to avoid is a situation where local authorities end up losing the little they have after it had been attached by a messenger of court,” he said.
Eng Mlilo said introducing prepaid water metres was the way to go if councils were to improve in revenue collection.
“You know the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has done extremely well through the introduction of prepaid metres. Councils should also go the same way than just crying foul over poor revenue collection. Councils can only recover the debts they are being owed by residents through the introduction of prepaid water metres,” he said.