THE Bulawayo City Council (BCC) has revealed plans to apply for borrowing powers from the government amounting to $50 million for the development of its capital projects lined up this year, latest council minutes show.
According to the minutes, the projects earmarked for development under the $50m loan included Lower Rangemore — Mbundane and Mthunzini ($9,6m), land acquisition at northern areas, Lower and Upper Rangemore ($10m), Cowdray Park Hlalani Kuhle servicing ($12m), roads rehabilitation ($10m), Emganwini water and sewer ($3m).
About $5,5 million is earmarked for community services facilities such as construction of early childhood development (ECD) blocks plus additional buildings at Sizalendaba Secondary School, two primary schools, a library, housing office, clinic and fire station at Cowdray Park.
BCC town clerk, Christopher Dube said there were no funds to undertake capital projects at the moment.
“In view of this, there was need to apply for borrowing powers from the parent ministry. Basically, council was preparing to borrow money as and when cheap funds became available in the market,” the minutes read in part.
“Council intended to apply for borrowing powers from the Local Government and National Housing ministry amounting to $50 065 000,” minutes read.
Councillor Rodney Jele wanted to know if residents would be charged interest in order to recoup such costs since the funds would come at a cost. He also wanted to know if council was constructing ECD blocks because this was the responsibility of parents.
Councillor James Sithole sought clarification on the percentage of the interest rate.
In response to the question raised by the councillors, BCC acting financial deputy director explained that council was allowed to exercise this facility as prescribed by the Urban Councils Act, Chapter 29:15.
Dube advised that council had been engaged as a contractor by Umguza Rural District Council.
The residents of Mbundane and Mthunzini would be charged to recoup the money.
Similarly, with the ECD blocks, council would be contracted and then the parents would pay for the construction.
“With regards to costs of the funds, he advised that normally local authorities got money from government at the rate of the 5% per annum. Council would not borrow money with interest above 5%,” the minutes read.
In 2017, council signed a memorandum of understanding with Umguza Rural District Council to work together for the harmonious development in planning, servicing and development of Upper and Lower Rangemore.
In the agreement, BCC was to provide water, sewerage and solid waste management services to 66 000 residential properties of Mbundane and Mthunzini.
After the discussion, it was recommended that the borrowing powers amounting to $50m to cover the projects be advertised in the press and applied for from the Local Government Public Works and National Housing minister July Moyo.
BCC’s capital budget for 2018 is $48,1m.–newsday.co.zw