$1.5m deficit as Gweru firms battle for survival

Local council here has been plunged into a huge deficit for this year-US$ 1 415 557. Closure of surrounding companies due to viability challenges has been cited as the biggest cause.

Edgar Mwedzi, the council’s Director of Finance, made the revelations while presenting the draft budget for 2012 pegged at $25 847 935 – up from last year’s $19 059 087.

A number of companies in the city have either closed down completely or downsized operations this year. Those most affected are Zimcast, Zimalloys, Fort Concrete, Powercell and Edgar Whitehead. Those operating at below 50% capacity production are Bata Shoe Company, Dairy Board Zimbabwe and Delta.

“Not only have they failed to pay their rates bills, they have also laid off their employees whose only source of income to pay for their service charges and rates was the employment,” Mwedzi said.

Council also incurred a deficit of $367 219 through offering social services without raking in income.

“Our water tariffs for the year were also sub-economic. Whereas the cost of producing and supplying water was 40 cents per 1 000 litres, we were actually selling it at 14 cents.”

The 2012 final budget expected to recover the deficit will be tabled before the local government once adequate consultations have been made, said Town Clerk Daniel Matau.

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