Harare okays $2m refuse trucks' loan

HARARE - Harare councillors have approved a $2 million loan the city council intends to borrow from Metbank for the purchase of refuse trucks.

Council last year made a resolution to procure 27 refuse removal trucks and five compactors aimed at improving waste management in the city.

Banc ABC offered to procure the trucks at a total sum of $7 million at 16 percent interest rate.

Eighteen trucks have so far been delivered to the local authority at a cost of $3 541 168.

Council is yet to receive nine trucks and four skid trucks allegedly held by the supplier until Banc ABC pays, forcing the committee to seek alternative avenues for funds.

“Subject to the approval of His Worship the mayor and in view of the urgency of the matter (procuring of trucks the committee seeks) that council approves the loan from Metbank Ltd and enter into a loan agreement for an amount of $2 million,” the latest finance committee minutes read.

“(The loan is) repayable up to December 31, 2013 at an interest rate of 10 percent, establishment fee of 3, 25 percent and a draw-down fee of three percent flat once off.”

However, some councillors felt that the local authority should finalise the so-close-to-complete deal with the initially contracted Banc ABC.

Councillor Phumulani Musagwiza asked why council was engaging another bank to complete a transaction started by another bank.

“I want to find out why there is a delay in the delivery of our trucks. We were expecting all the 27 trucks to be here by now,” said Musagwiza during last week’s council meeting.

“I am also surprised that after we initially negotiated with Banc ABC we are now negotiating another facility with another bank for the same project,” he queried.

His fellow councillor Peter Moyo concurred, adding that the committee should furnish them with good reasons.

“Our grapevine has it that the remaining trucks are already here but held by the supplier because Banc ABC cannot pay,” said Moyo.

“If it is facing liquidation, it should declare so that we do not become liars to our electorate.”

Chamber secretary Josephine Ncube said the proposal was merely driven by favourable borrowing rates.

“Delivery of the outstanding trucks is awaiting payment of the outstanding amount. Since our finance committee is negotiating for another loan, we expect them to be here by end of month,” said Ncube.

“Though the loan is repayable within a short time, we feel the loan has considerably low interest rates,” she said.

Mayor Muchadeyi Masunda and his deputy, Emmanuel Chiroto, affirmed the proposal saying that there was nothing “unusual” about the proposal as deals should be spread.

“There is nothing unusual with banks syndicating in providing a facility,” said Masunda.

Chiroto added: “We need to approve this facility and make sure that we keep this bank with its favourable loan conditions.”

Council eventually approved the resolution which also caters for the establishment of a sinking fund for the repayment of the loan which will be jointly managed by Metbank and Harare city. - Wendy Muperi

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