ZINWA owed US$103 million

THE Zimbabwe National Water Authority (ZINWA) is owed a cumulative US$103 million by various customers for water rights and supplies, the Financial Gazette can report. Despite writing off debts to the tune of US$55 million in August 2013 at the behest of the ZANU-PF administration, the authority has found out that a good turn does not always deserve another. Among its major defaulters is government, which owes the State enterprise US$20 million.

Government’s indebtedness ranks third, trailing irrigators whose debt to ZINWA currently stands at US$37 million and local authorities, at US$24 million. Government is however, the single largest debtor on ZINWA’s books. Other debtors include mining companies (US$3 million), domestic consumers (US$6 million) and parastatals (US$5 million). Churches, schools and businesses, industry, among others, account for the US$8 million balance. Because of failure to settle debts by customers, ZINWA’s cash flows have deteriorated quite drastically over the years.

Despite its huge cash-generation potential, the parastatal now finds itself unable to pay its workers and meet other recurrent costs. Last month, Water Resources Minister, Saviour Kasukuwere, was forced to order ZINWA to cut off water supplies to non-paying customers, claiming they were prioritising trivial issues instead of paying essential bills.

“People are spending money on cellphones talking to girlfriends for long hours and nothing on water,” he said adding that “you can go and demonstrate but after wards, you will need water to bath and that is when we will tell you pay first for the service”.

In a statement released this week, ZINWA said it was now disconnecting services to defaulters, who it is also suing in the process, as well as engaging debt collectors to try and recover what it is owed. “Since debt collectors were hired late in December 2014, it may be too early to assess the real impact of their coming on board though we have started seeing an improvement in the number of people paying and coming to present payment plans,” said ZINWA.

ZINWA’s financial situation was aggravated by government’s directive towards the watershed 2013 elections, ordering major utilities to write off a huge chunk of what they were owed by their customers. While the directive helped ZANU-PF win the elections, it eroded the cash flows for ZINWA and other utilities such as ZESA Holdings, TelOne and the 92 councils dotted across Zimbabwe. On its part, ZINWA wrote off debts amounting to US$55 million owed by farmers and local authorities.

ZINWA is a wholly government-owned entity tasked with managing the country’s water resources.  The authority was created through the ZINWA Act as part of government’s efforts to reform the country’s water sector. The authority is by no means the only one affected by the high default rates.

Councils throughout the country are currently saddled with debts owed by residents and the same goes for power utility, ZESA and other essential service providers such as public hospitals and government-run schools. The situation seems to have been triggered by the deteriorating economic situation that has seen companies closing at the back of mounting economic challenges while others have either slashed salaries or are failing to pay their workers. — Staff Reporter

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