THE Reserve Bank has rejected Harare council’s much-publicised turnaround strategic plan as not sufficiently profitable for the local authority to repay the loan advance
d by the bank.
The RBZ had promised the council $1,2 trillion to implement its strategic turnaround plan under its Local Authorities Reorientation Programme.
The council planned to unbundle operations on the lines of Johannesburg’s Unicity structure to improve service delivery to ratepayers.
The plan was approved by government last year and was supposed to be implemented beginning January. The unbundling process involved the transformation of city departments into 12 autonomous business units.
City treasury officials said chances of council getting the funds were very slim considering the current cash-flow hitches plus the social nature of council services.
“Council’s current cash-flows will not sustain the repayment of the loan, making the RBZ sceptical about funding the plan,” the officials said, adding: “The RBZ wants council to provide bankable projects which will generate surplus money or even increase council income. But that is very difficult because our services are of a social nature.
We are not a commercial entity seeking to make a profit.”
They said full cost-recovery was almost impossible.
Town clerk Nomutsa Chideya, the architect of the plan, said he was out of town referring all questions to acting city treasurer Cosmas Zvikaramba.
Zvikaramba said he was not allowed to comment without clearance from the public relations department. Leslie Gwindi (council’s public relations manager) could not be reached for comment as he was out of his office.
The Harare plan borrows heavily from the Johannesburg Unicity structure.
The document also resembles sacked executive mayor Elias Mudzuri’s Vision Harare 2010 strategic plan, turned down by Local Government minister Ignatious Chombo in 2003, which councillors claimed was prepared by over 25 stakeholder organisations.
The Mudzuri document was sponsored and coordinated by Fredrick Neumann Foundation to the tune of $20 million.
The Johannesburg structure is made up of 10 utilities in the form of registered companies wholly-owned by council, run on business lines by a city manager and executive directors.
The utilities are self-funding, receiving no annual grants from the city and provide billable services direct to individual households.
Harare’s plan envisages the creation of 12 autonomous business units to run council affairs along commercial lines.
The plan proposes that the local authority wholly-own the business utilities and where necessary enter joint ventures and smart partnerships for technology transfers with the private sector.
The business utilities would include Harare Corporate, responsible for information technology, procurement, human resources, public relations and administration; Harare Metro which will be in charge of the municipal police and municipal courts; Harare Water which will cater for water and sewerage treatment, managed by an autonomous Harare Water Authority; Harare Estate which will deal with estate development, valuation, housing and council properties; Harare Infrastructure in charge of roads and lighting; Harare Health in charge of primary health delivery; Harare Environment will take over the general cleaning of the municipal area and refuse collection and disposal; Harare Holdings will be the corporate entity that warehouses council’s businesses such as nurseries, chalets, crusher station and farms; Harare Finance will be in charge of accounting, budgeting and revenue collection; Harare Social will deal with social services, recreation and sporting facilities; Harare Emergency will shelter the fire brigade and ambulance services; and Harare Civic will be introduced to give the city a new dimension in civic participation, consultations, and dialogue in order to bring residents and council officials closer together.