CHEFS at Chegutu Municipality are under pressure to reverse a vehicle loan scheme for the city’s middle level managers despite failing to pay salaries.
Insiders told the Zimbabwe Independent that Chegutu’s has salary arrears stretching back to January this year, leading to councillors to protest the loan scheme.
However, the city’s mayor Jacob Chikuruwo said workers were currently being paid their June salaries.
Councillors opposing the deal, inked with AFC Bank, said apart from salary arrears, Chegutu must purchase and ambulance and roads maintenance equipment before pampering the top brass with luxuries.
But Chikuruwo told the Independent that the city was only giving AFC Bank guarantees that in the event that any of the managers leave, their benefits would be used to repay their loans.
A confidential conversation between councillors seen by the Independent indicated that the deal had triggered divisions.
“Let’s shelve the vehicle loans and pay the workers first,” one of the councillors said.
“What would the workers feel when they see these loans? Wouldn’t they say we are not paying them when the council has the money? When we have paid the workers, we should also buy an ambulance and road equipment and then get the vehicles for the managers,” the councillors said.
In March, Chikuruwo approached AFC Bank’s Chegutu branch to update a list of middle managers who had been omitted when the city first made the its request, according to official documents obtained by the Independent.
But red flags were immediately raised, prompting some officials to reported the matter to Local Government and Public Works minister July Moyo.
In his letter to AFC Bank, Chikuruwo said: “Council, through collective bargaining agreement 1 of 2016, section 2 (c), agreed to guarantee an amount of US$15 000 as a loan to each middle manager”.
“Council, therefore, requests the AFC Bank to facilitate such loans to our managers at the prevailing rate at the time of approval. It will be convenient for managers to repay the loans for five years. Council guarantees that if a manager leaves office his or her terminal benefits will be paid to that bank,” he added.
Chikuruwo dismissed reports of alleged vice at Chegutu, saying he was “aware the spurious allegations were coming from a dismissed former council employee.”
“Council only guaranteed to the bank that in the event any loan beneficiary failed to pay back the loan to the bank, the municipality would ensure that their terminal benefits are channeled to the bank for repayment,” he said.