The Sunday News
Vusumuzi Dube, Municipal Reporter
THE chaotic state of the Bulawayo City Council’s inventory could affect the local authority’s move to privatise its wholly owned entity, Ingwebu Breweries amid revelations that some properties known to be under the council’s jurisdiction do not have any title deeds.
Council has announced plans to privatise its Bulawayo Municipal Commercial Undertaking (BMCU) run brewery to ensure the firm remains viable.
However, it has emerged that the process could be frustrated by the fact that the local authority is facing challenges in transferring some of its properties to the entity as there are no title deeds.
The local authority intends to transfer some of the properties to the jurisdiction of the newly formed company to make it attractive to potential investors and lenders. The properties include beer gardens and bottle stores located around the city.
The list also includes some of the city’s largest beer gardens — MaDlodlo and MaKhumalo both in Makokoba and Pata Pata Bar Lounge in Mpopoma.
According to a council confidential report, of the 47 properties being operated by BMCU and owned by the local authority, only two had title deeds with the rest not having any, thereby giving the local authority a headache.
“The town clerk reported that Bulawayo Municipal Commercial Undertaking was running 47 properties after surrendering some to council. These properties belonged to the City of Bulawayo. The (Ingwebu) head office sat on a property which had a title deed that included Khami Clinic. Steeldale Brewery had a title deed. The remaining 45 properties did not have title deeds.
“The conversion of BMCU to a private company had called upon council to consider whether it should transfer these properties to the new company.
Without immovable property, the balance sheet of the new company would be weak, thus making it unattractive to potential investors and lenders,” reads part of the report.
The report stated that among the options open to the local authority, was to either transfer the whole properties to BMCU as initial equity but after processing the title deeds or donating the properties to the new company or give the company right of use of the premises with or without payment of rentals.
“As stated, 45 properties had no title deeds. They needed to be surveyed and indications were that it would cost an average of $1 200 per property. The head office would require a subdivision to separate Khami Clinic from the head office.
“The cost was borne by council. Other options demanded that an expert valuation of the 47 properties be undertaken to establish the value for both Zimra and International Accounting Standards. The valuation cost ranged between $4 000 and $12 000,” reads the report.
The local authority, which also owns numerous properties in the city is not aware of the net worth of their properties exposing itself to possible defrauding and undervaluing if the event of the properties being sold.
The situation had reportedly led to the council’s auditing firm — Ernst and Young Chartered Accountants — raising a red flag on the matter.
Town Clerk Mr Christopher Dube said the council only has a list of assets but did not have any assets register.
An assets register contains pertinent details about each fixed asset to track their value and physical location. The register shows the quantity and value of the assets while a list of assets is just a compilation of assets owned by an individual or corporation.
