In southern Africa, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a subsidiary of state-owned power utility, ZESA, has decided to take the legal route in collecting its money, totalling over $1 billion in unpaid power bills, reports local media.
It is reported that from the list of bad debtors, at least 40 of them are state and local authorities who are being sued for a combined $25 million.
ZETDC implements payment strategies
ZESA’s spokesperson, Fullard Gwasira, had last month confirmed the implementation of a debt recovery strategy, due to huge outstanding electricity debts.
According to the media, Gwasira explained that strict credit control measures such as lawsuits were ZESA’s last resort in cases where the creditors are not cooperating in terms of payment plans.
“Litigation for us is the last option. We believe in dialogue and those who come forward and negotiate payment plans are not sued,” he said.
He added: “There are many cases that are settled outside court because we do not enjoy suing our clients. If the debtors cooperate, we will simply agree on favourable terms.”
Debt recovery strategy
Last month, ESI Africa reported that as of 1 September 2016, ZESA planned on increasing its debt recovery rate from 40-50% of electricity purchases by customers.
According to Gwasira, the power utility had directed defaulting industrial and commercial customers to clear their debts within the next six months.
He explained that the credit control measures were being applied in efforts to ensure the success of government’s economic blueprint, Zim-Asset.
He told the media that following unsuccessfully implemented solutions, ZESA approached the High Court seeking an order compelling the defaulters to pay up.
It is however reported that most of the debtors are contesting the billing systems stating that the figures the power utility is claiming are unreasonable and strange to them.