Tuesday, 8 July 2014

Vic Falls town council to borrow over $14m

THE Victoria Falls Town Council has made an application to borrow over $14 million from financial institutions to finance water, sewer and road works around the resort town.
In a notice to the public, the local authority said in accordance with Section 290 of the Urban Councils Act Chapter 29:15, it would borrow $14 776 849 to fund projects. According to the Urban Councils Act, if local authorities wish to borrow sizable loans from financial institutions, they have to seek government approval or a guarantee.
The idea of seeking borrowing powers is that if councils borrow money from financial institutions and fail to service the loan, the government could assist in the repayment.
The Victoria Falls municipality is seeking $1,1 million for installation of water reticulation services in new areas and $1,5 million for sewer reticulation. The bulk of the money — $12,1 million — would be used for the upgrading and construction of roads and storm water drains.
In June, the government made available 274 hectares of land near the Victoria Falls International Airport for the expansion of the resort town as it intensifies efforts to mordenise the country’s tourism hub into a global destination of choice.
The financially embattled local authority scrapped $3,6 million owed by residents in September 2013 in accordance with a ministerial directive to wipe off all municipal utility debts owed by residential customers accrued between February 2009 and June 2013.
The resort town’s municipality said the move seriously backfired as it was now struggling to meet its obligations. Recently, several local authorities, notably the Bulawayo City Council, have been seeking borrowing powers to finance capital projects.

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