Late Vice President Joshua Nkomo’s businesses in Bulawayo are reportedly on the verge of collapse owing to the prevailing harsh economic conditions in the country, something that has seen the companies fail to service their debts
According to the latest council minutes, Nkomo’s daughter Thandiwe Nkomo-Ebrahim approached Bulawayo City Council (BCC) seeking exemption from paying rates for two family run business, Blue Lagoon and Anzac Investments, a property developer.
However, her request was turned down by BCC arguing it will set the wrong precedent for other companies in the city.
The Chamber Secretary said that rates exemptions were governed by the Urban Councils Act in particular Section 270.
As such, the request should not be acceded to because the properties were not within the list of those that qualified for exemption.
“The temporary reprieve sought would set a wrong precedent. The economy was generally not performing well and the situation was affecting every one,” reads part of the minutes.
The Acting Director of Health Services said that payment of rates was meant to ensure that council continued to provide quality service to all residents.
Therefore exemption from paying rates would adversely affect the already precarious council financial position.
BCC director of engineering services, Simela Dube, said the family could sell all the undeveloped land to avoid a heavy and unsustainable rates burden.
“The Blue Lagoon account was poorly managed by the applicant. Payments had not been consistent over the years resulting in the ballooning of the debt,” he said.
“In view of the comments by the Heads of Department and in particular the City Valuer`s efforts in reducing the rates for the project and the Blue Lagoon it was recommended that the request to exempt the project and the Blue Lagoon from paying rates be not acceded to,” he said.
Thandiwe had indicated that the Blue Lagoon was a sole proprietorship business and the building was leased to three tenants who were operating a restaurant, butchery and a bakery.
She said due to the prevailing poor economic conditions, the tenants had been increasingly failing to meet their rentals which had in turn led to rates payment arrears.
She stated that it had become apparent that it was no longer possible to raise funds from the business and as such she was seeking a grace period from paying the full rates.
Nkomo’s daughter was also seeking the reversal of interest that had accrued to the account. In the meantime, she was putting up the property for sale and she had also started negotiating with service station companies to either purchase the property or to enter into a joint venture.
In terms of Anzac Investments, Thandiwe had pointed out that the company had a development project located within the jurisdiction of City of Bulawayo. The development was of two upmarket suburbs of Mqabuko Heights and Whitestone comprising of residential stands, open spaces, a commercial centre, primary and secondary school sites.
The company was yet to complete the servicing of the area as surveys were 70% complete, roads are 20% complete and the challenge was to raise a quoted figure of $4, 96 million to complete the exercise.
The company had hoped to sell the remaining stands to raise the required capital, to engage a company to complete the project in exchange for land, going into a joint venture with council to complete the development and finally to approach stand holders to make contributions together with the developer to come up with the required funding to complete the project.