Redcliff fears insolvency pleads with government to settle $16 million debt

The selling of stands has been one of Redcliff’s major revenue generation projects following resident’s failure to settle financial obligations.

By Staff Reporter

Redcliff Municipality has pleaded with government to settle a $16 million debt which it is owing to the local authority as failure to recover the debt will render the council technically insolvent.

The financially hamstrung local authority is engaging government to settle part of the debt.

Redcliff is battling nearly $9 million labour related costs, $3 million in salary arrears and also owes nearby Kwekwe City $3 million.

Government which is expected to pay over $30 million to Kwekwe and Redcliff councils took over the Zisco Steel debt to make parastatal attractive to prospective suitors.

“Ziscosteel debt is $16, 4 million and engagements are being done with respective stakeholders to recover this debt as a total write-off would render the Council technically insolvent as creditors would exceed debtors.

“However, Council has written to the parent ministry seeking its intervention that we be paid in cash and Treasury Bills against $14, 7 million debt to Council following the Ziscosteel (Debt Assumption Bill) 2018,” finance committee chairperson Nyasha Benza said.

Meanwhile, nearby Kwekwe city has also said government must also start to settle the Zisco Debt as the council is struggling financially.

“We expect government to budget for the Zisco debt in its 2019 budget. We plead with the government to start settling part of the debt next year,” Kwekwe City Council Financial Director told a Finance Parliamentary Portfolio Committee recently. Government owes Kwekwe City $16 million.

Meanwhile, Redcliff has frozen the sale of stands amidst a deepening cash crisis.

The selling of stands has been one of Redcliff’s major revenue generation projects following resident’s failure to settle financial obligations.

“As a local authority we have suspended selling of stands at the moment. Considering the present economic environment we have seen that it’s not feasible to sell the stands as we might sell below the market value,” Mayor Clayton Masiyatsva said.

He said council is battling a serious housing backlog but is not able to provide stands due to the economic conditions.

Statistics from the council treasury have projected a local authority in the red.

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