The local authority, led by Mayor Shadreck Tobaiwa, had resolved to disconnect the giant steel manufacturing company following the collapse of negotiations on payment of the bill.
The company now has Indian iron manufacturing conglomerate Essar Africa Holdings as its major shareholder after government ceded its stake in a $750 million deal last year. The town clerk, Emmanuel Ngwena Musara, told a council meeting last week that Chombo’s directive would cripple the city’s operations.
“Anytime from now council business may collapse because we have been forced to continue supplying water services to a big company which is not paying us despite using the resource in huge quantities,” said Musara.
“At present Essar is giving us about $2,000 monthly and they say that money should go towards their debt of $10 million. The burden would have been lessened if we had stopped providing them with the service. The minister’s directive that we continue with the water supplies is detrimental and I foresee disaster,” he added.
Ward 10 Councillor, Aaron Gwaladzimba, said: “We really need the money that NewZim Steel owes us. It is sabotage for Chombo to block our moves to recover it. The fact is that council will fail to provide services and that will de-campaign us ahead of the next polls.” Councillor Queenly Chitopo added that there should not be sacred cows when it came to debt collection, and insisted that Chombo’s directive would see the city grind to a halt. The local authority is owed over $21m by residents and other local companies in unpaid bills.
The Mbizo-based subsidiary of NewZim Steel, Lanchashire Steel, owes $185,132, Golden Mile Motel owes $27,782 while Hotel Tropica owes $29,283. The meeting resolved to take NewZim Steel and all the other debtors to court and hopefully get permission to attach its property.
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