BULAWAYO City Council said Wednesday it would suffer a US$42 million hit after implementing a government directive to write-off residents' outstanding utility debts.
The revelation came after the government ordered local authorities to explain how they were implementing the order which was announced by local government minister Ignatius Chombo ahead of the July 31 elections.
In a statement, Bulawayo town clerk Middleton Nyoni, said the write-off covers all recurrent monthly charges for rates, rentals, water, refuse removal, sewer, value added tax (Vat) and interest charges.
"Bulawayo residents and ratepayers are hereby notified that council has complied with the Ministry of Local Government, Rural and Urban Development directive to write off domestic/residential balances as at 30 June 2013," he said.
"The City Council has reversed an amount of $46,272,791.30. The write off covers all recurrent monthly charges for residential properties and it is envisaged that the October 2013 bills reflecting the (cancellation) will be delivered progressively throughout the city as from 16 September 2013 to mid-October 2013."
Announcing the order about a week before the elections which Zanu PF won by a landslide, Chombo said the debt relief was consistent with the party's pro-poor policies adding it would cover the four year period the coalition government was in office.
The surprise move proved popular with urban residents who had struggled to pay rentals and service charges after the government ditched the virtually Zimbabwe dollar in preference for more stable foreign currencies.
Many called for the relief to be extended to electricity and other utility bills.
But the opposition MDC-T dismissed the order as cynical gimmick by Zanu PF to win votes in urban areas where the party had traditionally struggled.
The party warned that the directive would cripple the operations of local authorities which were already struggling with hugely diminished revenue bases in an economy still to recover from the biting recession of the last decade.