Council to terminate debt collector's contract

HARARE - Harare City Council (HCC) will not be renewing its contract with Wellcash Debt Collectors (Wellcash) after its expiry on November 15 this year.

This comes amid outrage by residents in numerous towns over the hiring of the debt collectors.

Councillors agreed not to renew the contract in a full council meeting held Tuesday.

During the meeting, HCC’s audit committee chairperson, Herbert Gomba, said the position was taken after realising that the local authority had a credit control department that could carry out the same tasks as Wellcash.

He said there was duplication of roles by Wellcash, HCC credit controllers and the legal division.

“If people are not happy with the way the credit control department is  handling the matter, let the Human Resources (HR) committee deal with that matter. What we are seeing is a situation where we are asking an external organisation to do council work yet we do not see any disciplinary measures being undertaken on the people who are failing to do their job,” Gomba said.

Alderman Samuel Chinyowa, however, argued why council was rescinding the contract considering the city’s poor revenue collection.

Chinyowa said the city cannot function without funding and ratepayers needed to negotiate payments.

“The city has no money and yet the people want to disengage with Wellcash. If the government can engage them at Parirenyatwa Hospital where people are being treated and we say no, where do we get money for this council? People do not want to pay money. We are failing to pay our workers because there is no money. Let us not play politics here. We want the council to function. We want money for the city to run,” Chinyowa said.

HR committee chairperson Wellington Chikombo  said council could not be emasculated by bringing in external help.

He said HCC employed people to do debt collection duties, adding that outsourcing the service increasing costs unneccesarily.

“We need to capacitate divisions that deal with debt collection. We cannot sit back and let other people do the job then we pay them money that is supposed to come to council anyway. We should make sure that we reduce costs by any means necessary,” Chikombo said.

According to the notice to rescind the council resolution to engage Wellcash, council noted that the interest charges on debts and the 10 percent commission further impoverished low income property owners.

“The rescission of the council resolution will not leave a gap in debt collection as a council resolution is already in place to capacitate the credit control section of the finance department, to improve the debt collection capacity. Council is already assessing the challenges being faced by its revenue collection division with the view to urgently address the same,” read part of the letter.

Wellcash director Cashington Mavunduke told the Daily News that they had no qualms with council not renewing their contract.

“We have no problems with council not renewing our contract. We actually worked for more months than the contract had stated. Our business will not suffer because of that, we still have many other clients,” he said.

Comments (1)

That councilor, who is struggling to justify the subcontracting of debt recovery to collectors should tell us why Harare City Council should have a whole credit control dept fully manned by staffers who are enjoying all the perks that go with performing debt collection functions. Does it make sense to charge the hard pressed rate payers interest on outstanding balances, fixed monthly water charges and a hefty admin charge for the debt collector. The electorate should take note of this so that next time they go to the ballot only people oriented councilors are voted into office.

Resident - 2 November 2017

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